Public Sector Pay: Proposed Strike Action

Chris Stephens Excerpts

Tuesday 1st November 2022 Westminster Hall

[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to serve under your chairmanship, Sir Edward, and I thank everyone who has contributed to this debate. Like others, I refer Members to my entry in the Register of Members’ Financial Interests, particularly the fact that I chair the PCS parliamentary group and am a member of Glasgow City Unison. I wish my Unison comrades from Barnet all the best, and I am sure that my successor as treasurer of Glasgow City Unison will make a substantial contribution to them.

I will make a few points about why I think it is important that Members of Parliament provide solidarity and support to those taking industrial action, whether they be members of the Communication Workers Union or the RMT or local government workers in Scotland. If our constituents decide to withdraw their labour, that gives us, their elected representatives, an opportunity to meet them and to find out how they feel both about the dispute and about other more general issues. This is about showing that support and listening and engaging.

Like my hon. Friend the Member for Glasgow East (David Linden), I want to voice my solidarity and support for the Government Back Benchers who have taken industrial action by not turning up today. There is a serious point to that. If any public sector workers watching this debate are represented by a Conservative politician—which only adds to the trials and tribulations of life—they will be asking, “Where were they to represent me and speak about my issues?” It is a real shame that there are no Government Back Benchers present.

I will refer in my speech to the excellent PCS briefing and TUC research. First, it has to be acknowledged that wage restraint in the public sector has been a complete and utter failure. It is not wages that have driven inflation—it is prices, particularly energy prices. There is a lack of regulation in the energy market and a real feeling out there that the energy regulators act on behalf of energy companies, not consumers. The Government’s position seems to be, “Well, we clapped the nurses on a Thursday night, but we aren’t going to pay them.” Imagine if the public took that view on energy companies and told them, “Every Thursday night we are going to clap you, but we aren’t going to pay you.” Perhaps they would start to listen then.

The cost of food is also an issue. The PCS briefing gives a litany of evidence of workers in UK Government Departments utilising food banks to help them get through life—including those who work for the Department for Work and Pensions. People who work in the Department that is the so-called safety net for the general public are having to use food banks and other affordable food projects and food aid programmes in order to get by. What is the cost of the benefit payments being made to those working in Government Departments? At one time, 40% of DWP workers were getting tax credits. Could the Minister write to us with the percentage of workers in each Government Department who are being paid benefits by the state to top up their wages?

That is the political choice, as my hon. Friend the Member for Glasgow East and others have pointed out. Giving bankers unlimited bonuses while at the same time holding down public servants’ pay is completely the wrong priority, particular for those public sector workers who kept the economic wheels turning during the pandemic. It is an absolutely ludicrous sense of political priorities. It is a disgrace that the UK Government’s response to industrial action is to try to roll back workers’ protections, and to threaten the right to strike.

We have the most aggressive anti-trade union laws in the world and, ludicrously, trade unions are prohibited from being able to ask for their members’ opinion either online or in the workplace. Is it not ironic that it is the Conservative party, which had workplace balloting in here to decide its leader, that decided not to allow trade unions to ballot online to take industrial action? Before anybody says that such action has economic consequences, I say that the leader of the Conservative party certainly had economic consequences and caused more damage than trade unions have for many years.

As the hon. Member for East Lothian (Kenny MacAskill) pointed out, the Transport Strikes (Minimum Service Levels) Bill will impact the settlements with the devolved nations. It suggests that the Secretary of State for Transport will be able to tell the Transport Minister in Scotland what the minimum service levels will be. That is not the Secretary of State’s job. Quite frankly, it is a disgrace.

It has been a long debate, and I have limited time, but I want to touch on the clear economic case for giving public sector workers the money that they deserve. Some 70p in every £1 of public money, whether from grants, public sector contracts or, yes, public sector wages, ends up in the private sector economy. Public sector workers spend their wages; they do not put them in a shoebox and hide them under the bed. They spend that money in the private sector. That is why urgent action is needed to end in-work poverty. In the UK, we see an explosion of affordable food projects to help people get by week to week. That should not be taking place.

I hope that the Government talk about their dialogue and discussion strategy. Trade unions have driven social and political change across these islands. Trade unions exist because the chances of bosses being visited by three ghosts at night are unreasonably slim. That is why the trade union movement—I am a proud trade unionist—seek changes in this country.

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[Victoria Atkins]

We keep all taxes under review. The hon. Gentleman will know that there is a statement coming in two weeks’ time. I am not going to comment on any decisions in relation to taxes, as it would be improper to do so, but I hope that he and the hon. Member for Glasgow South West (Chris Stephens) will speak to their SNP counterparts in their own Administration to ensure that they do as they have encouraged in this debate in relation to matters that are devolved.

[Chris Stephens]

rose—

[Victoria Atkins]

I am going to move on to the independent pay review bodies, because they play a really important role for some sectors and the pay that they receive.

Pay for many local government workers is agreed between the Local Government Association and trade unions, without direct involvement from the Treasury. Departments determine pay awards for many civil servants within the parameters set by the Government, but pay for most frontline public sector workforces, including nurses, teachers, police officers and armed forces, is set through the relevant independent pay review body. It will take evidence from the Government but also, importantly, from trade unions and wider independent research.

When I was prisons Minister, I had a gruelling session in which I was cross-examined by the prisons pay review body. I was delighted to accept the overwhelming majority of its recommendations when they came forth, with the only exception being the recommendation about the most senior prison officers, working on the principle that those with the broadest shoulders will be able to play their part in this endeavour.

On the point made by the hon. Member for Easington (Grahame Morris), working conditions for the public sector must focus on pay but also, importantly, on how people feel treated and how they feel in their workplace. That was something I tried to engender as prisons Minister, and I hope we will be able to build a real narrative about how our people are valued.

I am conscious of the time, so I shall address one or two of the pay increases that the independent pay review bodies have been able to deal with. Nurses at all NHS pay bands will receive at least a £1,400 increase, and all teachers will receive a minimum 5% increase to their pay, which will help early-career teachers to reach the Government’s commitment on starting salaries of £30,000. There are many other statistics that I could mention.

My final point is that we are disappointed that some public sector unions are considering strike action over pay. We want unions to engage not just with the Government, but with the pay review bodies and the devolved Administrations, in the processes that will run this year. We all know about—indeed, Members have been good enough to talk about it—the impact that strikes have on hard-working families, but I very much hope that we all understand just how vital these workers are. I will finish there to give the hon. Member for Cynon Valley time to sum up.

Economic Update

Chris Stephens Excerpts

Monday 17th October 2022 Commons Chamber

[Jeremy Hunt]

Well, I have had many discussions on pensions issues with the Governor of the Bank of England who, as the hon. Lady knows, has taken extensive action to protect the viability of pension funds. She will be as pleased as I was that he announced today that he thinks that he has basically succeeded in resolving that issue in nearly every case.

[Chris Stephens (Glasgow South West) (SNP)]

Will the Chancellor commit to the House that, as part of his decision making, he will also take cognisance of the social consequences and the consequences for social stability? Food aid charities handed a petition to Downing Street today saying that they are struggling to meet the demands of our fellow citizens. Will he meet those charities so that they can impress on him the urgent need to uprate benefits in line with inflation?

[Jeremy Hunt]

I am meeting many different people to discuss that very issue, but I am afraid that I can only point the hon. Gentleman to my earlier answer that I am not announcing any decisions on it today.

Economic Situation

Chris Stephens Excerpts

Wednesday 12th October 2022 Commons Chamber

[Chris Philp]

I will make a couple of points. Extraction companies already pay about double the rate of corporation tax that other companies pay. In addition, we have imposed the energy profits levy, through which the rate of taxation on their profits increases to 65%. That is a pretty significant rate of tax, even by Labour party standards, and it will raise about £23 billion over the relevant three-year period. The hon. Member will also have seen the announcement from my right hon. Friend the Business Secretary yesterday on ensuring that renewable companies provide energy to our constituents at reasonable prices. The suggestion that no contribution is being made by the energy sector in the circumstances is, frankly, not accurate.

[Chris Stephens (Glasgow South West) (SNP)]

The Minister quoted IMF analysis but curiously not the part where it warns that rising prices will be worse in the UK, noting that the Government’s tax cuts will “complicate the fight” against soaring prices, and where it expects higher prices to last longer in the UK than elsewhere. What is his analysis in relation to food prices and tackling food poverty in the next two years?

[Chris Philp]

The energy intervention will make sure that inflation in this country is about 5% lower than it otherwise would be. That is not a Government forecast, but the consensus of independent forecasters. Also, the inflation rate in the United Kingdom is lower than in some other countries, including Germany and Holland.

The Growth Plan

Chris Stephens Excerpts

Friday 23rd September 2022 Commons Chamber

[Kwasi Kwarteng]

The hon. Gentleman is absolutely right to say that we need to look at how the energy market works. How the gas price determines the electricity price is openly discussed, but a lot of our electricity generation is based not on fossil fuels but on renewables. I commissioned that work in the Department for Business, Energy and Industrial Strategy, and I hope to see it completed very soon.

[Chris Stephens (Glasgow South West) (SNP)]

What measures does the Chancellor have for working people who are having to utilise food banks, are considering utilising warm banks, and, at Christmas, will have to utilise toy banks? At the same time, the Government plan to introduce legislation to drag out pay negotiations, which could go on for months, leading to a stagnation in wages. Is the Scottish Trades Union Congress not correct when it describes his statement as a “full frontal assault” on working people in Scotland?

[Kwasi Kwarteng]

It is nothing of the kind. People will benefit from the reversal of the national insurance increase and the acceleration—the bringing forward—of the 1p cut in the basic rate. That is what tens of millions of people in this country will benefit from.

Economy Update

Chris Stephens Excerpts

Thursday 26th May 2022 Commons Chamber

[Rishi Sunak]

I am happy to give my hon. Friend that assurance and to work with him and the industry, because we want to create a pro-investment environment. On energy efficiency, we are investing £6 billion over the course of this Parliament to improve the energy efficiency of public sector buildings and individual people’s homes.

[Chris Stephens (Glasgow South West) (SNP)]

In his statement, the Chancellor rightly raised his concern, as we all have in this House, about the number of people eligible for pension credit who are not claiming it. The latest figures suggest that £1.5 billion in pension credit is unclaimed. That is not something we should have going forward, so will he indicate whether the Government will now look at a proper take-up strategy for pension credit, or is the grant that he has mentioned today perhaps the way forward?

[Rishi Sunak]

I know that my right hon. Friend the Secretary of State for Work and Pensions is constantly ensuring that those entitled to those benefits do get them, and I am sure she will keep everything under review.

Cost of Living Increases

Chris Stephens Excerpts

Wednesday 16th March 2022 Commons Chamber

[Stephen Flynn (Aberdeen South) (SNP)]

I beg to move,

That this House warns that households will soon be suffering the worst income squeeze since the 1970s; notes The Institute for Fiscal Studies analysis that households are on course to be £800 worse off; calls on the Government to scrap VAT on energy bills, implement a windfall tax on companies which are benefitting from significantly increased profits as a result of impacts associated with the covid-19 pandemic or the current international situation, and to scrap the energy bill rebate scheme and introduce immediate emergency cash payments for households.

A phrase said to me many years ago has stuck with me, and I believe it is true for this debate on the cost of living crisis: “Poverty is a punishment for a crime you didn’t commit.” For so many people now—in Aberdeen, Scotland and across the United Kingdom—there is a real feeling of helplessness, hopelessness and powerlessness at the situation before them. Their food, fuel and energy prices are soaring, as is the price of their children’s clothes; no matter which way they turn they cannot escape the grim reality of the situation before them.

This issue cuts across all sectors of society. Just yesterday at the Dispatch Box the Chancellor was extolling the virtues of the employment figures going up. That is of course good—everyone irrespective of political party would welcome it—but he did not address the fact that for those in work, energy prices will be some 14 times what their pay rise might be; he did not even acknowledge that that was a fact. Furthermore, he did not address, let alone reflect on or apologise for, the fact that, just a matter of months ago, he took some £20 of universal credit out of the pockets of those who are not in work and are reliant on the state for social security to get by day to day.

[Chris Stephens (Glasgow South West) (SNP)]

On deductions by the state, it is not just the £20 uplift but the fact that hundreds of thousands of people across these islands have £60 taken off them every month in Department for Work and Pensions deductions, some of them advances and some of them so-called tax credit overpayments.

[Stephen Flynn]

Absolutely; my hon. Friend is a doughty champion on these causes and makes his point extremely well, and it would be remiss of the Government not to listen to him. He is right to touch on that, as we all are right to touch on the cost of living crisis, because it is a crisis: it is a crisis for households up and down the country.

What we need from the Government in a time of crisis is a response. We need them to take action to improve people’s lives—to protect them, and to insulate them from what is coming down the road—but, sadly, they have been completely lacking in that regard. I am sure that in their hearts of hearts many Conservative Back Benchers—although just a few are present today—recognise that the Government can and must go further, because all we have seen at this stage, despite the exponential increase in the price cap, which could well reach about £3,000 a year by the autumn, is £150 towards a council tax rebate.

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[Chris Stephens (Glasgow South West) (SNP)]

It is a pleasure to follow my hon. Friend the Member for Airdrie and Shotts (Ms Qaisar), who is a good friend and comrade. When she talked about loan sharks, it reminded me of the misleading adverts that we see on social media from debt companies, which I do regard as loan sharks, as they force people into trust deeds and other such things. I know the Minister used to be in the Treasury, so he will be familiar with some of these arguments. Certainly this is a matter that I will be taking up with the Government in future, because it must be tackled. If we are in a cost of living crisis and people see these misleading adverts on Facebook and other social media outlets, their lives could be made even worse.

I am told that repetition is not a vice. I was in a Westminster Hall debate this afternoon on in-work poverty, which was led by the hon. Member for Easington (Grahame Morris). It is worth reminding people that in-work poverty is at its highest ever level, disproportionately affecting lone parents, disabled people and carers. As the Joseph Rowntree Foundation has told us, 68% of working age adults in poverty are in a household where at least one adult is in work. Those are the highest figures ever recorded since 1996, when figures were first gathered on these issues.

I ask the Government to look specifically at in-work poverty. Far too many people in low-paid jobs do not have any opportunities to progress to better work and to better wages. Moreover, far too many of our fellow citizens are working in insecure jobs with unpredictable hours and unpredictable incomes.

I have a real concern about minimum wage rates, which some of my colleagues have also mentioned. A recent article on The Ferret website—the story was also covered by The Herald newspaper—outlined that an alarming number of the 10,000 jobs advertised on the Department for Work and Pensions website offered less than the national minimum wage. Burger King was advertising a post with a wage of £6 an hour; PizzaExpress, a wage of £6.56 an hour; and Farmfoods, a wage of £6.66 an hour. These companies made profits in the past couple of years—good profits, at that. I will be asking for an inquiry on why the DWP website is advertising jobs that pay less than the national minimum wage. It really is a scandal. Perhaps the DWP will refer itself to the national minimum wage compliance unit; it should, given that it is advertising jobs with these rates of pay. I hope that the Minister will respond to that point.

A number of Members on both sides of the Chamber have raised concerns about universal credit. Unfortunately, the hon. Member for Blackpool South (Scott Benton) is no longer in his place, but while he was speaking about universal credit, I looked at a parliamentary answer that I received from the Department for Work and Pensions, and it shows that 55% of Blackpool South constituents on universal credit have an average of £63 a month deducted from their benefit. In Stourbridge, 39% of people receiving tax credits get an average of £61 deducted as a result of tax credit overpayment.

Deductions from benefits really have to stop. Universal credit is supposed to be a subsistence-level benefit; it is supposed to be the amount of money that people require to eat, heat their home, and live a good life. If we deduct from universal credit, it leads to the spiral of debt that many hon. Members have spoken about.

The Government need to do a couple of things. This scandal of advances has to stop; there really should be an up-front grant. The all-party Select Committee on Work and Pensions unanimously agreed that there should be a starter payment two weeks after a claim. That is perfectly reasonable. It would stop the cycle of advances and debts.

Also, why are the Government pursuing tax credit debts that are over six years old? If the hon. Member for Edinburgh South (Ian Murray) wanted to sue me in the Scottish courts for a debt that was over six years old, the sheriff would immediately knock the case out, because it would be absurd; likewise if I were to sue the hon. Gentleman. So why are the Government pursuing tax credit overpayments that are decades old? It seems complete nonsense. I hope that the Government will sort that out.

The Minister is from the Department for Business, Energy and Industrial Strategy; one thing that he and his Department can do to sort out in-work poverty is introduce an employment Bill that ends insecure work, for example by seeking to eliminate zero-hours contracts, and that stops nonsensical practices. For example, employers are texting four individuals and telling them, “The first person who arrives gets the shift.” Employees then have to pay for transport to get to work, but they might not get the shift because someone else arrived two minutes before them. I hope that there will be an employment Bill, because we have been promised one since 2017. Five years on, it is still not here. Where is this mystical employment Bill? If the Government do not introduce it, perhaps they should support many of us who have brought forward employment legislation to address the plight of workers.

[Peter Grant (Glenrothes) (SNP)]

I was a bit reluctant to interrupt my hon. Friend, because he is making a fantastic speech, but may I give him an example that shows where the Government’s priorities lie? One group of employees who are traditionally low paid and in very insecure work are catering and cleaning staff. Does he recall that in the last Budget, the Chancellor claimed to have no choice but to impose a tax hike on people who are paid low wages to clean floors and dishes in casinos, but was at the same time able to announce a tax pay-back for the lucky people who own casinos? Is that not an example of where this Government’s true loyalties lie?

[Chris Stephens]

That is exactly where the Government’s priorities lie. Let us not forget that in-work poverty disproportionately affects carers as well, and that has to change.

I am conscious of time, but I hope the Government will respond positively to the points I have made. This is their crisis—the things I am pointing out are not to do with Ukraine or anything else. These things have been going on for 12 years, and the Government can immediately solve them.

[Mr Deputy Speaker (Mr Nigel Evans)]

There are 15 minutes left and three of you want to speak. Doing the maths, it is five minutes each and then you can all have equal time.

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[Greg Hands]

I will respond first to the debate. If I have time, I will take interventions.

My hon. Friend the Member for Blackpool South (Scott Benton) said that there were more universal credit recipients in his constituency than in any other in the UK—a startling fact for his constituency—and said how much his constituents are benefiting from the changes in the UC taper rate as well as the increases in the national living wage, which he supported. On green levies, we announced in the heat and building strategy an affordability call for evidence on where to put those levies. We will take decisions on that later this year. His support for nuclear was well made, particularly coming from his part of the world near Springfields.

The hon. Members for Airdrie and Shotts (Ms Qaisar) and for West Dunbartonshire (Martin Docherty-Hughes) gave a selective account of Scottish Government actions. But Scotland is benefiting hugely from the broad shoulders of the United Kingdom and the UK taxpayer in particular. What would really hammer his constituents is separation and the immediate huge budget deficit, which would be easily the largest in the western world. Either taxes would have to rise or Scottish public services would be cut.

My hon. Friend the Member for Stourbridge (Suzanne Webb) praised the £9.1 billion package to help those with increased energy bills and spoke about how to reduce our dependence as well as the importance of the transition to renewables. That is the answer. She also praised the Government for the 500% increase in the proportion of our electricity that comes from renewables since 2010.

The hon. Member for Glasgow South West (Chris Stephens) made some important points about in-work poverty, but the best route out of poverty is work itself. I heard no mention from him of yesterday’s amazing figures, with the number of unemployed falling below pre-pandemic levels for the first time and another strong increase in employees on the payroll in February.

[Chris Stephens]

Will the Minister give way?

[Greg Hands]

I will answer the hon. Member’s point about minimum wage job adverts. The Department for Work and Pensions does have checks and, if it discovers any positions below the minimum wage, it will take them down.

[Chris Stephens]

I thank the Minister for that helpful answer. Is it in order for us to report the Department for Work and Pensions to the national minimum wage compliance unit?

[Greg Hands]

We take enforcement of the national minimum wage incredibly seriously across Government—all Departments do. However, I point out that the increase in the national living wage from £8.91 to £9.50, which is coming in just a few weeks, will help out someone working full-time by £1,000 a year. That will make a huge difference to their pay packets.

The hon. Member for Edinburgh North and Leith (Deidre Brock) rightly condemned the Russian invasion of Ukraine—I praise her for that—and made some important points on food security that I am sure will be drawn to the attention of the Department for Environment, Food and Rural Affairs. The hon. Member for Midlothian (Owen Thompson) called for a package of measures to tackle the crisis. Well, I had to go back to the SNP motion, because we will remember a package of measures being announced by our Chancellor of the Exchequer on 3 February at this Dispatch Box precisely to take action on energy bills. The hon. Gentleman is calling for a package of measures. Unfortunately, his motion calls

“to scrap the energy bill rebate scheme”.

His own motion calls for that very package of measures to be scrapped.

Moving on to the Front-Bench contributions, I have been in this House 17 years but I do not think I have ever heard a Member of Parliament for Aberdeen—for Aberdeen itself—without a single word of support for the North sea oil and gas sector. The hon. Member for Aberdeen South (Stephen Flynn) was ducking the issue, rightly raised by the hon. Member for Edinburgh South (Ian Murray), about what exactly is meant by the windfall tax. There are 100,000 Scottish jobs at stake, many in his constituency—in fact, his constituency may have more of those jobs than any other constituency in Britain—yet there was not a single word of support for those hard-working people in the North sea oil and gas sector.

The First Minister of Scotland said—these are her own words—

“production from the North Sea in the short term is not a practicably deliverable solution.”

That is totally defeatist. We will do further licensing rounds and we will do one this year. We are now seeing the benefits of previous licensing rounds. Only today IOG announced the Elgood field coming online, the second new field this week. This is great news for the UK as a whole and for the overall North sea sector so crucial for Scotland’s success, as well as the success of the whole of the United Kingdom.

They are not the Scottish national party. They are against the interests of Scotland. They are the Scottish dependency party, dependent on imported hydrocarbons from abroad, including from Russia. I read carefully the hon. Gentleman’s motion—one should always read the motion, as we all well know—which calls to

“scrap the energy bill rebate scheme”.

That would mean no reduction of £200 in energy bills in October, no council tax reduction in two weeks’ time, and, presumably, a repayment of the £290 million Barnett consequentials. What public services would the hon. Member for Aberdeen South cut in Scotland to fund that £290 million repayment?

Finally, I turn to Labour’s windfall tax. I must say that I had a slightly different interpretation of the position of SNP Front-Benchers. I think the hon. Member for Aberdeen South was supporting the windfall tax. I agree that it was not really clear, but I took it as supporting given that the motion talks about the windfall tax and this is a debate on energy. But I have to say to Labour that 82% of oil and gas produced in the UK is produced in Scotland, which means that Labour’s windfall tax would very largely hit the Scottish economy. A windfall tax could accelerate rising prices.

Labour has given up on Aberdeen and north-east Scotland. I remember when Labour had both seats for Aberdeen. Now, they are nowhere near—nowhere near. The Scottish Conservatives have overtaken them and anyone opposing the SNP in Aberdeen should vote for Ryan Houghton and his team in May. With moves like the windfall tax, is it any wonder that Labour support in Aberdeen is in decline and going nowhere? Maybe the hon. Member for Edinburgh South should go back to the shadow Cabinet and stick up for Scotland, and not throw in Labour’s lot with the Scottish National party—or the Scottish dependency party—when it comes to oil and gas.

As the Exchequer Secretary and I have set out, the Government have listened to, recognised and acted on the concerns of families who are struggling with the cost of living. We do not take their concerns lightly. The energy bills support scheme will provide £5.6 billion of support to households later this year, ahead of the winter period, while the additional support for English homes in council tax bands A to D will further help households with the cost of living—totalling, with Barnett consequentials, a package worth £9.1 billion. The Government will continue to engage with industry, consumer groups and other stakeholders as we progress these measures.

It is this Government who have the clear plan. The Opposition parties have squabbled among themselves today, arguing over the definitions of windfall tax, but it is we who are delivering energy security and energy transition, and securing this nation’s prosperity.

Question put and agreed to.

Resolved,

That this House warns that households will soon be suffering the worst income squeeze since the 1970s; notes The Institute for Fiscal Studies analysis that households are on course to be £800 worse off; calls on the Government to scrap VAT on energy bills, implement a windfall tax on companies which are benefitting from significantly increased profits as a result of impacts associated with the covid-19 pandemic or the current international situation, and to scrap the energy bill rebate scheme and introduce immediate emergency cash payments for households.

House of Commons Members’ Fund

Ordered,

That Stuart Andrew be removed as a Trustee of the House of Commons Members’ Fund and Christopher Pincher be appointed as a Trustee in pursuance of section 2 of the House of Commons Members’ Fund Act 2016.—(Gareth Johnson.)

Public Service Pensions and Judicial Offices Bill [Lords]

Chris Stephens Excerpts

Report stage
Tuesday 22nd February 2022 Commons Chamber

[John McDonnell]

I agree with the first point, but let me take up that last point, because I just want to explain to other Members where I am coming from and get it on the record.

On moral grounds, I have argued very strongly within my own local government pension scheme—so far, I have to say, unsuccessfully—that I do not want the money I have earned, and part of my pension is my earned income, to be invested in a number of states. They include Saudi Arabia, because of its involvement in Yemen. In fact, I have organised demonstrations when there were visits from various representatives from Saudi Arabia to this country. I have argued that I do not want my pension invested in China because of the treatment of the Uyghurs. Again, I have engaged in demonstrations on that, and also on the moral ground that a number of trade union friends I have worked with over the years are currently in prison as a result of the operation undertaken by the Chinese state in Hong Kong. Yes, I have argued against investments going into Colombia because of the murder of trade unionists, and I have also argued against investments going into Israel because I do believe—according to the Amnesty human rights report, and many Jewish institutions—that it is an apartheid state in the way it treats the Palestinians.

That is my position: on moral grounds, I want to be able to influence the investments. I do not want my pension invested in armaments or fossil fuels either, and I believe that that is my right. I do not believe it is the role of the state to ride roughshod over my moral choices without extremely good reason. Given the threat of climate change and other matters, there may well be, in extremis, reasons for the state to act, but I do not think that this new clause is in that context.

[Chris Stephens (Glasgow South West) (SNP)]

If this new clause had been in legislation in the 1980s, it would have covered South Africa, and the right hon. Member will remember that local authorities drove the anti-apartheid movement, while the UK Government refused to impose sanctions.

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I therefore hope that the right hon. Gentleman will not press his new clause and that if he does, he will not succeed. Any hon. Member is entitled to put forward a proposal that they wish to see coming to fruition at some point, but for the Government to support something that is so nebulous, wide-ranging and potentially destructive, and that acts counter to all that public sector pension schemes do, would be a grave error. I know that the right hon. Gentleman is a very sensible and measured man, so I hope that he will not press his new clause. He can come back with a debate on BDS and tax his Secretaries of State as to why they have not taken the matter further, but his new clause does not belong in the Bill.

[Chris Stephens]

I will be brief, having been on the Bill Committee. First, I should probably declare that I am a member of the Scottish local government pension scheme. I have always taken the view that a pension is deferred pay. In the past few weeks, university lecturers have taken industrial action because of the threats to their pension schemes; I have been very proud to visit their picket lines and offer my solidarity and support.

I wish to raise a couple of issues. I view new clause 1 as a Trojan horse. The main points that I want to raise are my support for the amendments tabled by my good friend the right hon. Member for Hayes and Harlington (John McDonnell), and the effects on employees and workers. In Committee, the Chief Secretary assured me that discussions were ongoing with trade unions to fix the issues. I hope that he will update the House on any discussions that have taken place since then and on the progress of those talks.

A basic principle that has been identified in relation to many of the amendments is that workers should not be penalised financially for mistakes that have been made in calculations by the Government or employers. It is a clear principle for many of us on the Opposition Benches that no worker should be penalised for such mistakes and that their pensions should not be affected. I therefore support the Opposition amendments in that regard.

[Mr Simon Clarke]

I thank all right hon. and hon. Members who have spoken today. I appreciate the constructive way in which all Opposition parties have handled the Bill. Today’s debate has focused on several important themes, which I will address in turn.

One central theme was the clarification requested by the hon. Member for Hampstead and Kilburn (Tulip Siddiq) and other Members about whether the estimated £17 billion cost of remedy will be included in future valuations of the cost control mechanism for unfunded schemes. The answer, definitively, is that it will not. The Government will reform the cost control mechanism to a reform scheme-only design for future valuations. I hope that that reassures the House.

Public Service Pensions and Judicial Offices Bill [ Lords ] (Second sitting)

Chris Stephens Excerpts

Committee debates 2nd sitting & Committee stage
Thursday 27th January 2022 Public Bill Committees

It is important to stress that the Government must not take action that would be contrary to the whole purpose of this Bill: to remove the discrimination identified by the courts and to ensure that all members are treated equally from the first of April 2022 by accruing service in the reformed schemes regardless of their age.

[Chris Stephens (Glasgow South West) (SNP)]

There is obviously a serious issue here, on which the Government have had representations. Can the Minister assure the Committee that discussions will continue between trade unions and other associations and the Government to try to fix this problem?

[Mr Clarke]

I thank the hon. Gentleman for the spirit in which he asks his question. We always want to discuss these issues as fully as possible with a view to finding viable options where they exist. As I said, the Home Office has consulted on detailed regulations to implement the prospective McCloud remedy for the police pension scheme, and it will bring forward the outcome of that consultation in due course.

The Government must not take action that inadvertently creates a new form of the very discrimination that this legislation is designed to address. The Government must also safeguard the purpose of the reforms proposed by Lord Hutton and ensure that public service pension schemes are put on a sustainable fiscal footing. As the Independent Public Service Pensions Commission put it,

“Allowing current members to continue to accrue further benefits in the present schemes for many decades would be unfair and inequitable to the new members coming behind them.”

The reformed public service pension schemes remain among the most generous schemes available in the United Kingdom. Based on the Office for National Statistics’ most recent assessment, 6.3 million public sector workers participate in these valuable schemes, while only 0.7 million workers in the private sector have access to defined-benefit schemes that are open to new members.

I am concerned that the new clause ultimately seeks to oblige the Chancellor to devise measures that would contradict these crucial aims of the prospective McCloud remedy. Compensating members with remediable service for the difference in pension age between their legacy and reformed schemes would, effectively, leave a protected class of public service pension scheme members beyond 31 March 2022, which could perpetuate the discrimination identified by the courts, or give rise to new discrimination. It would also severely weaken the efficacy of the prospective remedy for many years to come, at very considerable cost to the taxpayer.

To summarise, I genuinely thank the hon. Member for Hampstead and Kilburn for bringing attention to this issue, and reassure her that the Government have been considering the position of these members. However, careful consideration must be given to the need to avoid perpetuating the discrimination identified by the courts, or introducing new discrimination against other pension scheme members, or inadvertently undoing much of the policy aims of this Bill, and this new clause asks the Chancellor to propose a means of doing just that. I therefore, respectfully, ask the hon. Lady to withdraw the new clause.

Public Service Pensions and Judicial Offices Bill [ Lords ] (First sitting)

Chris Stephens Excerpts

Committee stage
Thursday 27th January 2022 Public Bill Committees

[Mr Clarke]

It is a pleasure to serve under your chairmanship, Mr Sharma. I thank colleagues on both sides and those in the other place for the constructive way in which we have proceeded with this Bill so far. I thank my officials, who have done an exemplary job on a complex piece of legislation.

At the heart of the Bill is fairness and equal treatment for the public servants on whom we all rely. To ensure we achieve that objective, the Bill is underpinned by the core principles of greater fairness between taxpayers, fairness for lower and higher earners, and the future sustainability and affordability of public sector pensions. I would like to take a moment to explain why the approach to bring forward a number of amendments at this stage has proved necessary—indeed, crucial—to provide a robust and effective remedy.

As I am sure Committee members will agree, this is a highly complex and technical matter. The Bill covers more than 40 schemes. Each, individually, has its own layers of detail and complexity. We are dealing with a somewhat unprecedented issue. Retrospective changes of this scale have not previously been required for occupational pension schemes. However, it is undoubtedly vital that we get it right. Since the Bill was introduced, the Government have continued to work with the individual schemes, stakeholders and Departments to check and recheck the Bill to ensure that it will deliver our commitments to remove the discrimination and offer a complete and effective remedy.

Clause 1 identifies periods of service that are in scope to be remedied under the Bill by placing a number of conditions that must be met. The first condition is that the service took place during the period that the discrimination arose. The second condition is that the service is pensionable under a public service scheme and would have been pensionable under a chapter 1 legacy scheme had the discrimination not occurred.

The third condition is that the person was, on or before 31 March 2012, a member of a legacy scheme or—in the case of certain schemes for firefighters—eligible to be a member of such a scheme. Members who first joined any public service pension scheme after that date were ineligible for transitional protection regardless of their age, and therefore were not subject to the discrimination identified by the court.

The fourth and final condition is that there is no disqualifying gap between the service to which the third condition relates and the period in question. For reference, a disqualifying break in service is defined as a period of more than five years, which reflects the rules of public service pension schemes but allows members who leave to subsequently rejoin when the gap between leaving and rejoining is five years or less.

Amendment 2 concerns an issue that is specific to the teachers’ pension scheme involving teachers with excess service. If a teacher with a full-time teaching contract has an additional part-time contract or contracts, the additional part-time contract constitutes the excess service. Excess service is pensionable in the new teachers’ pension scheme but not in the legacy scheme. However, where the relevant employer has an existing relationship with the local government pension scheme, the regulations of the LGPS provide that the excess service is pensionable in that scheme instead. The teacher will automatically be entitled to enrol into the LGPS in relation to their excess service, therefore providing a home for those accrued rights.

The amendment updates the second condition in chapter 1 to cover excess teacher service, meaning that excess teacher service is a remediable service and, therefore, subject to the provisions in clause 2(1). It will ensure that a member’s excess service can be rolled back to the appropriate scheme. Amendment 4 is consequential on amendment 2, and amendments 34 and 38 define excess teacher service.

Amendment 3 is designed to ensure that the remedy applies correctly to former local government staff who have compulsorily transferred from their employer as a result of outsourcing and were entitled to pensions protection. If such members subsequently became a member of a chapter 1 scheme, the amendment provides that the time they spent in a private sector pension scheme would not count towards the disqualifying gap in service when assessing their eligibility for remedy, which is consistent with the approach provided in respect of transfers and central Government fair deal arrangements.

[Chris Stephens (Glasgow South West) (SNP)]

I am speaking as someone who was a local government employee in Glasgow before I came to this place. Is the Minister saying that, as a consequence of this amendment, if an employee working for the local authority finds that their service is outsourced by a decision of the local authority, that employee would not have pension rights as a result of the service that they would have if they transferred to that outsourced company? Could he clarify that?

[Mr Clarke]

To reassure the hon. Gentleman, the amendment is designed to prevent that from occurring. In other words, the fact that their employment was outsourced during that period would not constitute a gap of longer than five years, which would put that out of the scope of remedy. It is designed precisely to ensure that they do have protection, rather than that they do not.

Finally, amendment 36 defines a local government contracting-out transfer for the purposes of what I was just alluding to.

[Peter Grant (Glenrothes) (SNP)]

It is a great pleasure to serve under your chairmanship, Mr Sharma. Some of the comments that I will make today will repeat the assurances I asked for on Second Reading. Looking back over the Hansard record, I think I was the only Member who spoke in that debate who did not have their queries addressed in the Minister’s summing up—not that I was keeping track or feeling got at, at all.

I am grateful to the Minister for clarifying the query from my hon. Friend the Member for Glasgow South West; it should concern all of us that such a massive injustice almost slipped through the net. There have been dozens of chances for amendments to be made and for this Bill to be got right. I said on Second Reading that I was concerned that the number of very late amendments that the Government tabled in the Lords was an indication that there were still big gaps. Something as vital as not denying a public service worker their pension rights was missed because, as a result of a dreadful piece of legislation, their job was sold off to the private sector and then brought back in house again. For that potential injustice to have got this far, until the Government spotted it and brought them in, will leave us all at the end of today’s proceedings—and Tuesday’s if we sit then—still wondering what else is left that has not been picked up.

It is quite clear that, with some of the later amendments, the Government did not identify issues for teachers, whose length of service provision and their age sometimes will not fall into line with each other in a way that would be expected. Some of the later amendments suggest that the Government forgot that sometimes the Treasury does not decide things in Northern Ireland, but rather, it is the Northern Ireland Department of Finance that decides. How could such a crucially important piece of legislation have got to that stage without basic facts of the UK constitution having been picked up somewhere within Government?

I hope that when we come to those sections that the Minister will have the good grace to admit that sometimes there have been simple blunders by the Government, that mean we will have to consider these things as amendments rather than them being part of the substantive Bill.

[Chris Stephens]

Does my hon. Friend agree that we are taking about deferred pay for public sector workers, and therefore we should be treating this Bill with a great deal of care and attention?

[Peter Grant]

I absolutely agree. I made it clear during my comments on Second Reading that I do not doubt the sincerity of the Minister’s and the Government’s intention to do the right thing. However, I believe it is a fundamental principle that if someone signs up to a pension scheme, they get what they were promised, even if it becomes inconvenient or the Government discover afterwards that it is going to cost more than they expected. That is why it is important we get clarity on who is going to pick up the tab for the £17 billion, for example. It concerns me that a group of workers who were very badly treated by legislation in the past would have lost even more than they thought they had done if the Bill had not been amended at such a late stage.

I hope that these will be the last substantive amendments that we need to see, but I suspect that on Report the Government will have another raft of big amendments for things that nobody spotted until now.

Covid-19: Government Support for Business

Chris Stephens Excerpts

Thursday 16th December 2021 Commons Chamber

[John Glen]

I thank the Father of the House for his comments, and point out that there is £250 million of funds still to be given to businesses through the additional restrictions grants. Three out of four local authorities have between 5% and 40% of their funds unallocated. However, I recognise that this is a distinct new challenge, and that is why I and the Chancellor will be having meetings with representatives from the affected sectors this afternoon to see what more needs to be done.

[Chris Stephens (Glasgow South West) (SNP)]

The omicron variant is now present in all Scottish health boards, so I am sure the Minister will congratulate Scotland on being the first nation in the UK to vaccinate 50% of the eligible population with the booster jab.

On Tuesday, during the First Minister’s address to the Scottish Parliament, the Treasury sent out a press release indicating that more covid support was coming, but it later backtracked and pulled it. In response to those erroneous claims, the Scottish Finance Secretary has written to the Chancellor seeking clarification. When should the Scottish Finance Secretary expect a reply? Do we have to wait for the Chancellor to return from California? Does the Minister not believe that the Government’s flip-flopping and flippancy of the last few days has undermined the devolved Administrations and that assurances of funding must be provided right now?