Volume 2: Oral evidence. Written evidence can be found on the Committee's website at www.parliament.uk/treascom

Written evidence can be found on the Committee's website at www.parliament.uk/treascom

The Money Advice Service is not currently fit for purpose. The Committee considered whether to recommend that the MAS be scrapped completely but given that the Treasury had already announced its intention to conduct a review of the MAS they granted a stay of execution. They asked the Government to expedite this review and recommended that it should be independent, rather than led by the Treasury. The review must assess whether the MAS should continue to exist and, if so, how it can overcome the serious problems discussed. The current management of the MAS should also explain how they are going to act on the concerns identified. The independent review should seek to answer the following questions: Should the Money Advice Service-or something like it-exist as a statutory organisation? If so, what should the role and strategy of such a body be? Should it be a co-ordinator, commissioner or direct provider of advice? What channels should it use? If not, should the FCA take responsibility for the objectives of the Service? Does the FCA need greater statutory powers to hold the Money Advice Service to account? What are the views of other bodies in this sector about the way in which the Money Advice Service is now engaging with them? To what extent does the work of the Money Advice Service unnecessarily duplicate existing provision? What should the role of the Service be in each of the areas in which it operates? Is the remuneration of the Service's senior staff set at an appropriate level?

Around 43% of departmental expenditure limits are ring-fenced. As a consequence, public expenditure control - on the scale required to address the deficit - will be increasingly difficult. While ring-fencing reflects public priorities, those preferences are not equally strongly held for all ring-fenced areas. Support for the 33.5% cumulative real increase in aid over the course of this Parliament, for example, appears to be lower than for health and schools. The Committee also remains concerned about the impact of the Government's Help to Buy: Mortgage guarantee scheme. An abrupt end to the scheme could distort the market, as could announcements which radically alter people's expectations. Forecasts of additional revenue from many anti-avoidance measures are inherently extremely uncertain. The Committee warned in its report on the Autumn Statement 2012 that the forecast revenues from the UK-Swiss agreement - at £5.3 billion - were subject to uncertainty and that the proceeds may not meet expectations. These concerns appear to have been justified. Even after the event it is often very difficult to establish how much a particular measure has raised. The OBR should look again at how the Government accounts for projected revenues, based on previous experience. Even after the event it is often very difficult to establish how much a particular measure has raised. The more transparency about the yield, and therefore each proposal's effectiveness, the better

On 17 October 2014, the European Commission informed HM Treasury that the UK would have to make an additional contribution to the EU budget of approximately 2.1 billion euro. This additional contribution had been prompted by revisions to EU Member States' historic Gross National Income (GNI) data, dating back to 1995. Member States make several annual contributions to the EU budget, by far the most significant being a levy on GNI. This levy is charged as a percentage rate on Member States' annual GNI, with the rate set at a level designed to cover exactly the portion of the EU Budget which remains unfunded once the other sources of income - namely Traditional Own Resources' and VAT-based resources - have been taken into account. The result is that an individual Member State contributes to this portion of the budget in proportion to its share of total GNI across all Member States. In 2013, GNI-based contributions amounted to 74 per cent of the EU's total budget. Emerging from the ECOFIN summit of 7 November 2014, the Chancellor claimed to have "halved the bill" of £1.7 billion demanded by the EU. He later described this as the result of "hard-fought negotiation" with the Commission to ensure that the consequential change to the UK's rebate would apply. The calculation of the rebate, and the circumstances in which it applies, are embedded in EU law. This is set out in detail in Council Decision 2007/436/EC and the supporting Council document on the UK correction. These documents establish the precise method for calculating the rebate. On the basis of the evidence the Committee has seen, it should have been unambiguously clear to the Treasury, well in advance of ECOFIN on 7 November 2014, that the UK was entitled to a rebate on any additional budget contributions that could arise from the GNI revisions.