Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 180 - 199)



  Q180  Mr Mudie: Has that just been left out of the box?

  Ms Brivati: It is not in the box. It is elsewhere. It is chapter 3.

  Q181  Mr Mudie: I know. I raised it this morning. I think it is in the wrong chapter.

  Mr Cunliffe: I will make one point as a follow-up from a fiscal expenditure framework point of view rather than on the detail which is we set the plans for public expenditure in the spending reviews. At the PBR budget there may be particular things done for need, all the initiatives around heating have been pushed by higher fuel prices. If you look at chart 6.1 on the following page, that shows the allocation of resources to 2007-08 for the priorities of health, education and transport. It is quite a marked direction of resources there. I would get worried from the macro position if we started to have large shifts of expenditure at PBR or even at Budget within those public spending review periods.

  Q182  Mr Mudie: Is £580 million not a big shift?

  Mr Cunliffe: For the special reserve?

  Q183  Mr Mudie: Yes. We could do it for Iraq.

  Mr Cunliffe: It is a relatively large amount. There are some situations which you cannot envisage or you have to make special provision for. I think the amount for winter fuel is also a large amount.

  Q184  Mr Mudie: Jon, as this is the only time we financial watchdogs get to ask you questions, let us take the additional £580 million for the special reserve for military operations in Iraq. It says "an additional £580 million", how much have we got and where is it? I could not find it in the book.

  Ms Brivati: Total spending on Iraq at the end of 2004-05 was about £3 billion.

  Q185  Mr Mudie: £3 billion.

  Ms Brivati: These figures are not in the PBR report but they can be derived from outturn data from the Ministry of Defence.

  Q186  Mr Mudie: Can you say that last bit again?

  Ms Brivati: Yes. You can get the figure of £3 billion by looking at spending outturn data from the Ministry of Defence.

  Q187  Mr Mudie: It is hidden in there. There is no other sum because the Ministry of Defence will have some in. This is labelled "special reserve", so there is not a Ministry of Defence sum and the reserve and the special reserve. What is the total amount of expenditure for Iraq? That is what I am trying to find out as a financial watchdog.

  Ms Brivati: The total amount of expenditure on Iraq at the end of 2004-05 was £3 billion.

  Q188  Mr Mudie: £3 billion. What was it estimated for 2005-06, the present year? Something has happened because you have an additional £580 million to put in for this year. How much was in? You have obviously spent up, have you, with all these aircraft which are flying over.

  Ms Brivati: We have allocated the additional sum to represent our current view of what will be required in Iraq.

  Q189  Mr Mudie: What is that?

  Ms Brivati: It would not be correct to say that we have a forecast for the total requirement over 2005-06 because it does not quite work in that way. We have made our allocation for the moment.

  Q190  Mr Mudie: What is that allocation then?

  Ms Brivati: The allocation is £580 to the special reserve.

  Q191  Mr Mudie: Are you saying to me, which would be good news, that we have gone down from £3 billion in 2004-05 to £580 million in this year because that does not make sense, you are speaking about an additional £580 million?

  Ms Brivati: No.

  Q192  Mr Mudie: That is what I mean.

  Ms Brivati: The figure of £3 billion is the total amount that has been spent on Iraq up until that point.

  Q193  Mr Mudie: It was allocated in 2004-05 but you are running it forward?

  Ms Brivati: No, the allocations would have taken place at a number of points over the preceding Budgets and PBR.

  Q194  Mr Mudie: How much money since 2003, say, have we spent in Iraq?

  Ms Brivati: I do not have that figure to hand.

  Q195  Mr Mudie: Will it be more than the £3 billion?

  Ms Brivati: No, it will be less because the figure of £3 billion includes expenditure in 2001-02 and 2002-03.

  Mr Mudie: The £3 billion that you referred to and you relate it to 2004-05.

  Mr Love: Up to 2004-05.

  Q196  Mr Mudie: Up to 2004-05, has it been spent?

  Ms Brivati: Yes.

  Q197  Mr Mudie: At the end of 2005?

  Ms Brivati: Yes.

  Q198  Mr Mudie: You are putting an additional £580 million in. Is that all then? You have no more financial approvals? We have spent up to the end of 2005 £3 billion and we are putting another £580 million in. That seems a small amount for Iraq this financial year.

  Ms Brivati: There are two answers to that. One is that allocations to the special reserve represent our view of what will be required in Iraq but that does not preclude funding coming from other sources because we manage the reserves together. There is still the general reserve as well as the special reserve.

  Q199  Mr Mudie: To save the Committee's time, can you give the Committee a full breakdown of all the expenditure in the financial years from whichever vote?

  Ms Brivati: Yes.[3]

3   See supplementary memorandum dated 12 January 2006. Back

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