Written Statements
Charter for Budget Responsibility
(10 years ago)
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The Chancellor of the Exchequer (Mr George Osborne)
Today the Chief Secretary to the Treasury (Danny Alexander) and I have published and laid before Parliament an updated Charter for Budget Responsibility. This charter must be approved by the House of Commons before it is brought into force. A debate and vote on the charter will be scheduled in the House of Commons for early in the New Year.
The Charter for Budget Responsibility sets out the Government’s approach to operating fiscal policy transparently and managing sustainable public finances in the long-term interests of the UK. The purpose of the charter is to improve the transparency of the Government’s fiscal policy framework. It sets out the Government’s commitment to managing fiscal policy in accordance with clear objectives and targets.
The autumn statement 2014 update of the Charter for Budget Responsibility presents a revised fiscal framework, following a review by the Government.
The existing fiscal mandate, set in 2010, reflected the exceptional fiscal challenge the Government faced. In 2010 the Government said that they would revisit the fiscal rules once the public finances were closer to balance. Since then, the Government have made significant progress on their fiscal consolidation.
Public sector net borrowing as a percentage of GDP has fallen by more than a third since 2009-10 and is forecast to have fallen by half by the end of 2014-15. The Government are forecast to meet their fiscal mandate two years early in 2017-18, having reduced the cyclically adjusted current Budget deficit from its peak of 4.7% of GDP in 2009-10 to 2.6% of GDP in 2013-14. On the OBR’s central forecast, the cyclically adjusted current Budget will be in surplus by 0.7% of GDP in 2017-18.
In this context the horizon on the fiscal mandate can safely be shortened to create a tighter constraint on future fiscal policy choices. The new framework presented today sets a three-year rolling horizon. At Budget 2015, therefore, the target year for the fiscal mandate will be 2017-18.
Both parties in the coalition Government are committed to reducing public sector net debt (PSND) as a percentage of GDP. The OBR forecast that PSND will peak in 2015-16 at 81.1% of GDP, a year later than the current supplementary debt target. The revised Charter for Budget Responsibility sets a new supplementary target for debt to be falling as a percentage of GDP in 2016-17.
Meeting the fiscal mandate and putting debt on declining path will require further difficult decisions to be made by Government. The Government have set out detailed spending plans for 2015-16. Choices will need to be made about the composition of further consolidation beyond 2015-16. In order to meet the fiscal mandate and supplementary debt target set out in the updated charter the Government estimate that on current forecasts around £30 billion of discretionary consolidation is likely to be required over the following two years 2016-17 and 2017-18.
Public Sector Pension Reform
The Parliamentary Under-Secretary of State for Communities and Local Government (Penny Mordaunt)
Introduction
The Firefighters Pension Scheme Regulations 2015 were laid in Parliament on 28 October. Reforms to pension schemes are essential. People are living longer, with the average 60-year-old living 10 years longer now than they did in the 1970s. As a result, the cost of public service pensions has increased in real terms by around a third over the last 10 years and is now £32 billion a year.
The Firefighters’ Pension Scheme 2015 will remain among the very best pensions available, with guaranteed benefits that are inflation proofed. The coalition Government recognises that firefighters regularly undertake duties under tough conditions and that they deserve a good and generous pension. This is why, since the start of the reform process we have agreed to a number of enhancements.
The normal pension age of firefighters is 60, and has been since 2006. It is lower than the pension age for other public sector workers, reflecting the physical nature of the occupation. A normal pension age of 60 is being retained for firefighters in the 2015 Scheme.
Firefighter Fitness
The Department is acutely aware that firefighters have concerns over maintaining their fitness as they grow older. Fitness is, and will remain, the responsibility of individual fire and rescue authorities, the employers of individual firefighters. No changes to those requirements are being made with the 2015 Scheme. However, we consider that more work needs to be done to support firefighters in maintaining their fitness and there needs to be a stronger and clearer framework within which fire and rescue authorities make their decisions about fitness. This framework should be fair and transparent, and should provide strong reassurance for firefighters.
Consultation on Amending the National Framework for Fire and Rescue England
To that end, we announced on 28 October, at the same time as the regulations were laid, that we were also consulting on an amendment to the Fire and Rescue National Framework for England. The National Framework has a strong statutory basis. Under section 21 of the Fire and Rescue Services Act 2004, fire and rescue authorities must have regard to the Framework in exercising their functions. Section 22 of the Act also provides powers of intervention if the Secretary of State considers an authority is failing, or is likely to fail, to act in accordance with the Framework. Clearly, it is not a document which can be ignored, as the Fire Brigades Union has claimed.
The consultation concluded on 9 December, and we are keen to ensure that firefighters know as quickly as possible the outcome and our final decisions. Having reviewed all the consultation responses, we are pleased that the majority of fire and rescue authorities agree with the principles by which they would be expected to manage fitness and fitness-related issues in their authorities. We have built these clear principles around those agreed by the employers and the Union through the National Joint Council for Fire and Rescue Services, and adopted in Scotland.
Principles regarding Firefighter Fitness
These principles recognise that firefighting is a physically demanding occupation, and that firefighters need to have appropriate levels of fitness. To this end the National Framework will require all fire and rescue authorities to have a process of fitness assessment and development; ensure that no individual automatically faces dismissal if they fall below fitness standards and cannot be deployed operationally; provide all operational personnel with support to maintain their fitness for the duration of their career; and commit to providing a minimum of six months, development and support for firefighters if they fail a fitness test. It also requires that fire and rescue authorities ensure appropriate reference of firefighters to occupational health providers where necessary, and to identify reasonable adjustment or redeployment in role where it appears the medical condition does not allow a return to operational duties.
We have also included an additional requirement that, should a firefighter fail a fitness test through no fault of their own, the fire and rescue authority will consider suitable alternative employment, and if that is not possible, and the employee is at least aged 55, consider an authority-initiated retirement. It is important that fire and rescue authorities explore fully all options open to them, and ensure that their employees are treated with the fairness and dignity they deserve.
These principles, if implemented effectively through fire and rescue authorities in their fitness policies and procedures, will ensure that no firefighter faces a situation where they are forced to retire without access to a fair pension where they lose fitness through no fault of their own.
Independent Review of Operation of Principles
We have also committed to an independent review in due course to ensure that appropriate fitness standards, training, testing, monitoring and management policies and procedures are in place in each fire and rescue authority, which are in line with the principles set out in the Framework.
A Fair Pension
Additionally, through the improvements we have made to the 2015 scheme, any firefighter who chooses to retire early, between the ages of 55 and 60, will still have access to a pension that is actuarially fairly reduced, in line with both Lord Hutton’s and Dr Tony Williams’ recommendations. In the 2015 scheme, a firefighter retiring at 55 would see a 21.8% reduction to their pension (and no reduction to benefits earned in the 1992 scheme if the firefighter was a member of that scheme). This compares very favourably with the 40.5% reduction applied in the 2006 scheme.
There is absolutely no prospect, as the Fire Brigades Union has deliberately and misleadingly claimed throughout its dispute, of firefighters who lose fitness having “no job and no pension”.
We are today publishing an addendum to the National Framework and making the necessary statutory instrument to bring it into force.
Strong transitional protections
Because of the strong transitional protections built into the 2015 scheme, no firefighter will have to work beyond their current expected normal pension age until 2022. That provides a number of years for fire and rescue authorities and firefighters themselves to ensure that their approaches to fitness are developed to support firefighters working longer. In addition, there is a considerable amount of experience with regard to working with older firefighters, with over 1,000 firefighters already over 55 years of age in employment.
Fitness Working Group
To further support fire and rescue authorities in meeting their statutory requirements under the revised National Framework, we have set up, along with the Local Government Association and the Fire Brigades Union, a fitness group facilitated by the Chief Fire and Rescue Adviser, Peter Holland. This group will provide an important opportunity for employers, employees and Government to consider the issues around fitness in more depth, and identify good practice to address them. This process, linked with generous ill health arrangements and the opportunity for redeployment, supported by the principles in the Fire and Rescue National Framework for England, will ensure that firefighters continue to receive one of the best pension packages available.
Availability of National Framework Addendum
A copy of the addendum to the Fire and Rescue National Framework will be placed in the Library of the House and is also available on my Department’s website.
Agriculture and Fisheries Council
OSCE Ministerial Council
(10 years ago)
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The Minister for Europe (Mr David Lidington)
I represented the United Kingdom at the 21st Ministerial Council meeting of the Organisation for Security and Co-operation in Europe (OSCE), held in Basel, Switzerland on 4-5 December 2014 and hosted by Swiss Federal President and OSCE Chairman-in-Office Didier Burkhalter. The Council is the key decision-making body of the OSCE and was attended by Ministers from across its 57 participating States.
The Council took place in the final month of a year when the OSCE has been at the centre of the international response to the Ukraine crisis, and this subject dominated the Council. In my interventions in the discussions that took place on 3 and 4 December, I made clear that by its actions Russia was fully responsible for the instability in eastern Ukraine, and that its illegal annexation of Crimea would not be recognised by the international community. I said that Russia must implement its commitments under the Minsk Protocols, by withdrawing military personnel, equipment and weapons from Ukraine’s sovereign territory, ceasing the supply of separatist factions, and securing its border with Ukraine. Only then will there be space for a political solution to the crisis. I also commended the role of the OSCE in facilitating dialogue and providing valuable impartial reporting from eastern Ukraine, in particular its special monitoring mission, to which the UK has provided and will continue to provide significant financial and personnel support.
Similar sentiments were expressed in plenary by US Secretary of State Kerry, German Foreign Minister Steinmeier, Ukrainian Foreign Minister Klimkin and EU High Representative Mogherini among others. It is regrettable that Russian obstruction meant that a declaration on the OSCE’s role in, and support to, Ukraine could not be agreed despite the vast majority of OSCE States' desire to do so. However, in his Chairman's summary
https://www.news.admin.ch/messaae/index.html?lana=en&msQ-id=55531 President Burkhalter noted that many states had expressed the view that the crisis was the result of the pressure of one participating State against another; that the so-called referendum in Crimea had been in contradiction with the Ukrainian constitution; that Russia’s actions in Crimea had been in violation of fundamental OSCE commitments and international law; and that the territorial integrity, political independence and unity of Ukraine within its internationally recognised borders must be respected.
In the margins of the Council, I attended a meeting hosted by the Lithuanian Foreign Minister with Crimean Tatar leader Mustafa Dzhemilev, who described the restrictions and violations that the Tatars are now experiencing following Russia’s illegal annexation. Separately I met representatives of Russia-based civil society groups, who detailed the worrying trends of restrictions and threats that such groups face from the Russian authorities. Both meetings underlined the need for tough messages to be given to Russia about its conduct both in eastern Ukraine and Crimea, and also within Russia where human rights must be properly respected.
Aside from discussions on Ukraine, the Council agreed decisions or declarations on a number of topics, including on countering kidnapping and hostage-taking committed by terrorist groups; on countering the phenomenon of foreign terrorist fighters; on enhancing efforts to combat anti-Semitism; on the continuation of the Helsinki +40 process; and on the Transdniestrian Settlement Process. President Burkhalter additionally announced the launch of a panel of Eminent Persons to run through 2015 with the support of the incoming Serbian and German Chairmanships, with a remit to provide proposals on how to rebuild trust and establish respect for core OSCE principles.
I also met Serbian Foreign Minister Ivica Dacic, who will chair the OSCE when Serbia take over from Switzerland at the end of 2014, where we discussed the need for the OSCE to stay strongly engaged on the Ukraine crisis as we move into 2015.
I am placing a copy of the UK intervention in plenary, and of the OSCE Chairman’s summary of the first day of discussions, in the Libraries of both Houses.
It is also available online at:
http://www.parliament.uk/business/publications/written-questions-answers-statements.
Benefit Cap Review
(10 years ago)
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The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)
Today I am publishing the Command Paper Cm 8985 “The benefit cap: a review of the first year”.
This review is published in line with the statement made by the then Minister for Employment on 1 February 2012. The document draws on a suite of evaluation commissioned by my Department, with key findings peer reviewed by the Institute for Fiscal Studies, or on its behalf by independent researchers.
The review also draws on the benefit cap official statistics and evidence previously published by my Department.
The extensive new evaluation material is attached to this statement and will also be published today on the gov.uk website.
The review brings together and summarises the messages across all of the evaluation publications. Key findings include:
There is consistent evidence of positive employment-focused behavioural change for claimants affected by the cap, including lone parents and carers. It is clear that the priority of claimants affected by the benefit cap is to find work and they are succeeding in doing so.
Many claimants were encouraged to find work as a result of the cap. Capped households were 41% more likely to go into work after a year than a similar uncapped group of households (those with benefit income just below the cap level). Among lone parents and families in London there was an even greater likelihood of capped cases moving into work than similar uncapped cases.
The benefit cap is a popular policy, 73% of the public support it in principle and 77% of the public agree that it is fair for households with no-one working to receive no more in benefit than the average amount working households receive after tax.
Very few capped households have moved house and where they have done so, the vast majority have moved locally. The benefit cap has led to little, if any homelessness and local authorities have coped well with its introduction.
I enclose below a brief description of each evaluation report:
Benefit cap: Analysis of outcomes for capped claimants
Analysis of administrative data carried out by departmental analysts and peer reviewed by the Institute for Fiscal Studies. This document examines the historical estimates of those in scope for the cap and effects of the benefit cap by comparison of outcomes of capped claimants and comparable groups. Evidence is presented on movement into work (proxied by Working Tax Credit exemption), moving house and movement out of scope for the cap.
Post-implementation effects of the benefit cap
An Ipsos MORI longitudinal telephone survey of capped households identified from the October 2013 Single Housing Benefit Extract (SHBE). The first wave of the survey was carried out with 1,200 claimants in February 2014, and the second in August-September 2014 with 468 of the same claimants. This work examines the behavioural change over time on employment, finances and housing.
In-depth interviews with people affected by the benefit cap
A Cambridge Centre for Housing and Planning Research (CCHPR) report based on interviews with 50 households affected by the benefit cap These households were identified from the same source as the Ipsos MORI surveyed claimants. This work explores coping strategies of households and changes in behaviour around work and well-being, mobility and household structure, income and well-being, and beliefs and expectations. It provides contextual information around themes explored in the survey.
Supporting households affected by the benefit cap: Impact on local authorities, local services and social landlords
This report by CCHPR draws on work in 10 case study local authorities (LAs); a survey of social landlords; and consultation with major lenders to the Housing Association sector. A variety of LA staff were interviewed in May-August 2013 and again in September 2014 in case study areas; 26 landlords were interviewed in 2013 and again after one year in these areas alongside 47 local agencies (including CAB and voluntary organisations); and variety of lenders were interviewed and provided written responses to the consultation in October 2013 and 2014. It provides information on how local services have been affected and how they are working with capped claimants.
Attachments can be viewed online at:
http://www.parliament.uk/business/publications/written-questions-answers-statements.