Investing in Britain’s Future

Debate between Baroness Clark of Kilwinning and Danny Alexander

Thursday 27th June 2013 Commons Chamber

[Danny Alexander]

I agree wholeheartedly about the importance of the A303 and those road connections. The south-west is a vital part of our economy and needs to be properly connected to the rest of the country, and this investment will do that. With regard to the specific points on schools, I will ensure that they are brought to the attention of the Secretary of State for Education.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Is it not a shocking indictment of this Government that since 2010—[Interruption.] I suggest hon. Members listen to what I have to say before responding. Is it not a shocking indictment of this Government that since 2010, 84,000 construction workers have lost their jobs and construction output is down by 12%? Is not this statement just another example of smoke and mirrors that will do nothing to improve investment before 2015?

[Danny Alexander]

The hon. Lady is right to highlight the problems in the construction sector, but those problems started in 2008 when her Government were in office. They saw a major drop in output. By investing more in affordable housing, in both this Parliament and the next, we are giving companies in the sector certainty so that they can plan for the future and we are providing Government investment to help ensure that jobs are maintained in a vital part of our economy.

Public Service Pensions Bill

Debate between Baroness Clark of Kilwinning and Danny Alexander

Monday 29th October 2012 Commons Chamber

[Danny Alexander]

I am not aware of any technical reason why a time gap should occur, but I know that officials in the Northern Ireland Department of Finance and Personnel discuss this regularly with my officials in the Treasury. If there is any evidence of such an occurrence, I will be happy to consider it in the normal way. There have been regular discussions on these matters, not least in our Finance Ministers quadrilateral. We will meet again in a couple of weeks in Edinburgh, when this subject will be on the agenda, so we can discuss it then.

[Katy Clark (North Ayrshire and Arran) (Lab)]

The Chief Secretary will be aware that several of the Bill’s provisions will affect Scottish pension schemes for the first time. There is a debate in Scotland about whether a legislative consent order is required, so will he address that point in detail in his speech?

[Danny Alexander]

I certainly will, when I come to it.

Lord Hutton’s first set of recommendations consisted of safeguards to ensure that the long-term cost of pensions was sustainable through a link between state pension age and normal pension age, and included a cost-cap mechanism to protect the taxpayer in the event that other unforeseen costs arose. He recommended that the new schemes should be fairer by smoothing the current disparities between high and low-income earners and ensuring that benefits are distributed more equally, which was why he recommended a move from final salary provision to career average revalued earnings—CARE—schemes. Finally, he recommended stronger governance provisions for the new schemes so that scheme members and the public could understand how the schemes were run and what they cost.

We accepted all 27 of Lord Hutton’s recommendations as the basis for discussion with trade unions and scheme member representatives across the public service, and designed our blueprint reference scheme in a way that reflected the recommendations of the Hutton report without any cherry-picking. Our aim was to strike a deal that would last, unchanged, for 25 years. Talks with the unions took place on all elements of that deal. I should stress that the Government did not do all the talking in those meetings—we listened carefully, too. Agreeing the design of these pensions has taken a considerable cross-Government effort over the past 18 months. The Minister for the Cabinet Office, the Home Secretary, the Lord Chancellor, the Education Secretary, the Defence Secretary, the Communities and Local Government Secretary and the former Health Secretary worked hard to understand the concerns of the trade unions and member representatives in their sectors.

--- Later in debate ---

[Danny Alexander]

We have taken great care to work with the TUC. We have taken it through the text of the Bill, listened to its concerns and made adjustments where necessary. This has not just been done through the scheme negotiations; we have also been open by sharing the Bill with trade union colleagues. Given the long-term nature of the reform and the fact that it affects so many people, it was important to engage properly. My departmental colleagues have engaged closely with representatives of the relevant work forces to ensure that that has happened.

The Bill sets out a framework for the schemes, with some restrictions, and in due course we will have to produce regulations to set out the design of each scheme. There are well-established processes within Departments for working with employers and employees on such details. My experience is that those processes work pretty well, and there is a pretty good co-operative spirit among the pensions experts around the table. I therefore do not foresee any problems but, of course, if the hon. Member for Coventry South (Mr Cunningham) does, I would be delighted for him to bring them to my attention so that I can try to resolve them.

[Katy Clark]

Will the right hon. Gentleman give way?

[Danny Alexander]

I will make some progress and give way to the hon. Lady later.

I return to Lord Hutton’s four key tests for the future design of public service pensions: affordability, fairness to public service workers, fairness to the taxpayer and transparency. Those objectives have prevailed throughout the process and remain the cornerstones of the Bill. First, on affordability, it is clear from Lord Hutton’s report that the new scheme should be affordable and sustainable. The Bill represents a significant proportion of the total of more than £430 billion of savings that our reforms of public service pensions are estimated to save over the next 50 years.

--- Later in debate ---

[Danny Alexander]

The right hon. Gentleman is absolutely right to say that the link between the state pension age and the normal pension age is fixed in the legislation. That is a matter that was discussed in the negotiations, including the detailed negotiations with health service unions. The point I was seeking to make was that, as Lord Hutton recommended, we have agreed to review how that link operates at each stage at which the state pension age is increased, to enable those issues to be debated.

[Katy Clark]

rose—

[Danny Alexander]

I will give way one more time, then I must make some progress. There is a lot of detail to get through.

[Katy Clark]

Clause 9(2) means that firefighters would not be able to retire with a pension until they were 60. Many in the industry believe this is unworkable. What would the right hon. Gentleman suggest to firefighters who cannot work until they are 60?

[Danny Alexander]

In that case, we followed the recommendations of Lord Hutton—and, indeed, previous practice. The point I made just a moment ago—I am sure the hon. Lady was listening carefully—is that the provision does not stipulate the date to which people must work. Clearly, if people wish to retire earlier, they can do so and take an actuarially reduced pension or, indeed, retire later and take an actuarially enhanced pension.

Oral Answers to Questions

Debate between Baroness Clark of Kilwinning and Danny Alexander

Tuesday 24th April 2012 Commons Chamber

[Danny Alexander]

Tax increment financing has great potential in helping local areas to develop infrastructure projects and supporting economic growth across the country. As I said to the hon. Member for Coventry South (Mr Cunningham), the main tax increment financing scheme will be available to all local authorities in England from April 2013. That will apply to the kind of local authorities that my hon. Friend described.

[Katy Clark (North Ayrshire and Arran) (Lab)]

15. What assessment he has made of the effect of changes to working tax credit on couples in households where one person is retired.

Youth Unemployment and Bank Bonuses

Debate between Baroness Clark of Kilwinning and Danny Alexander

Monday 23rd January 2012 Commons Chamber

[Danny Alexander]

I have already given way to the hon. Gentleman and to the hon. Lady, and I want to make some progress.

[Katy Clark (North Ayrshire and Arran) (Lab)]

The right hon. Gentleman will be aware that while the living standards of those on low and medium incomes are going down, the wealth of the super-rich is going up. Will he give an undertaking that he will take action on this issue, and that the gap between rich and poor will be smaller by the next election?

[Danny Alexander]

The Government have taken on the issue of ensuring that the wealthiest pay a greater share, to ensure that there is fairness in our deficit reduction plans. For example, we have increased capital gains tax and put in place the new bank levy that I have mentioned. We have also maintained the 50p rate of income tax. We are making substantial changes to ensure that the wealthiest pay their fair share.

Public Service Pensions

Debate between Baroness Clark of Kilwinning and Danny Alexander

Tuesday 20th December 2011 Commons Chamber

[Danny Alexander]

The hon. Gentleman has described the position precisely. Over the next 20 or 30 years, the agreement will save taxpayers, including his constituents, tens of billions of pounds which it will be possible to use for other purposes. I recognise that many of his constituents in the private sector do not have access to pension provision, and I hope that that problem can be addressed, not least by means of the NEST scheme.

[Katy Clark (North Ayrshire and Arran) (Lab)]

Will the Government take steps to veto any agreements that may be made between the trade unions and the Scottish Government?

[Danny Alexander]

I hesitate to use the word “veto” at the Dispatch Box, even in answer to the hon. Lady’s tempting question. It is traditional for Scottish schemes to proceed by analogy with our United Kingdom schemes. I hope that that will continue, and that the intransigent opposition of the Scottish Government to any pension reform will cease. Of course, as with contributions, if the Scottish Government choose to proceed differently they will have to bear the cost.

Public Service Pensions

Debate between Baroness Clark of Kilwinning and Danny Alexander

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

My hon. Friend makes the point that public sector workers have traditionally considered the level of pension to be an important part of their reward package, and they are right to think that. I hope my hon. Friend agrees that the offer we have set out today constitutes a very fair reward for a career spent in precisely the sort of public service institutions he has described.

[Katy Clark (North Ayrshire and Arran) (Lab)]

The Chief Secretary will be aware that one of the concerns about increasing contributions is that that will lead to a rise in opt-out rates, particularly among low-paid and part-time workers, most of whom are women. In his answer to my hon. Friend the Member for Slough (Fiona Mactaggart), he mentioned an assumption of 1% of the pay bill, but the schemes and their memberships are very different. Will he ensure that opt-out rates are analysed on a scheme-by-scheme basis, as rising contributions could have a major effect on the viability of some schemes?

[Danny Alexander]

We have taken that on board through the proposals for a tiered increase in contributions. The hon. Lady will be aware that 80% of the public sector workers who earn less than £15,000 a year and will not have any contribution rate at all are women.