The right hon. Gentleman is absolutely right. This legislation, as I will go on to describe, relates to departmental spending. It as an advance against departmental spending that will be properly ratified, accommodated and acknowledged within the estimates process, as one might expect.
Departments—this goes straight to point just made by the right hon. Member for Kingston and Surbiton (Sir Edward Davey)—need money from 1 April, and they need more than the House has already allocated to them via the vote on account. The Government cannot afford to wait until July to deliver the resources needed for the next financial year, and the Bill seeks to close that gap.
The House has long recognised that the Government sometimes need to act without recourse to the normal processes, which is why Parliament has historically provided for the existence and use of a contingencies fund. But Parliament has wisely limited the amount that can be issued from the fund to 2% of the previous year’s cash spend. For 2020-21, that amounts to some £10.6 billion, which would be more than adequate in a normal year. But, as we have discovered, we do not live in normal times. These times are without precedent in the modern era. Through this Bill, the Government therefore ask the House temporarily to raise the limit on the amount that sits in the contingencies fund to 50% of that expended last year; I should be clear that that is approximately £266 billion.
Let me go further and say—again, this is a response to the point made by the right hon. Member for Kingston and Surbiton—that this is not new spending and it is not a blank cheque. All advances will have to be repaid once the main supply estimates are voted on in the summer, when the House will have the opportunity to scrutinise and debate where the resources have been allocated in the normal way. Nor does this represent additional Government borrowing. The Chancellor has said that he will update the Debt Management Office’s financing remit in April to reflect his recent announcements.
Quite simply, this Bill is about cash flow and the need to deliver the support we have announced without delay. It allows the Treasury to provide cash advances where they are urgently needed, and it provides for a safety net between supply estimates. This is an exceptionally short Bill, but it is an exceptionally important one in that it allows the Government to deliver the extraordinary package of support announced by my right hon. Friend the Chancellor. It solves a cash timing issue arising
from the current process, and balances the need for an urgent response to the unfolding crisis with the necessary parliamentary scrutiny and oversight.
This Bill is yet another demonstration of the Government’s commitment to fighting the threat from covid-19—protecting businesses, jobs and, most importantly, our fellow citizens, from the ravages of this deadly disease. I wholeheartedly commend it to the House.
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