Equitable Life

David Amess Excerpts

Thursday 26th February 2015 Commons Chamber

[Sir David Amess (Southend West) (Con)]

I congratulate my hon. Friend the Member for Harrow East (Bob Blackman) on securing the debate and on his speech. He, together with my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan), came up with a practical solution when they talked about the £115 million. As my right hon. Friend the Member for Saffron Walden (Sir Alan Haselhurst) has said, it would be nice if we could get some credit.

There could not be a more perfect Minister to respond to this debate than the Economic Secretary, because before she became a Minister she was a wonderful advocate on behalf of those of her constituents who have suffered as a result of the issue under discussion. I hope she is well placed to persuade her boss, the Chancellor, so that, in two weeks’ time all the hon. Members present can take some credit, not least for the settlement of the £115 million. Every Member present has constituents who are among the 945,000 Equitable Life policyholders who have suffered huge losses.

I have raised the issue many times with the Treasury and I always receive the same response, which essentially states that the Treasury has decided to pay out £1.5 billion of its £4.3 billion obligation and that the Government understand the policyholders’ disappointment, but that tough decisions need to be made due to the pressures on the public finances.

We all understand that taxpayers’ money needs to be managed and spent carefully and with the greatest consideration. However, paying out the full amount of the obligation to the Equitable Life victims is not merely about spending the outstanding £2.8 billion of our scarce resources. It is about regaining and rebuilding the public trust in the ability of our Government to create a safe environment and regulation in financial services. This is about the reputation of the British Government and financial services generally.

The problem is not going to disappear, regardless of which Members of Parliament survive the cull on 7 May. Equitable Life victims will continue campaigning and the Members who are returned here will continue to put pressure on the Government of the day to meet their obligation. The Equitable Life victims were, as we have heard, absolutely doing the right thing, working hard and paying into pension funds for their retirement. That sense of responsibility and work ethic is exactly what this Government support.

By paying only 22% of the obligation, the Government are ignoring the recommendation of the parliamentary ombudsman, as many Members have said—it is the same recommendation that was previously accepted by the Government in full. The British Government’s ignoring the parliamentary ombudsman sets a poor example for ombudsman cases across the country. If the Government do not respect an ombudsman recommendation, why would anyone do so? It sets a precedent for undermining the work of ombudsmen generally throughout the United Kingdom. The need for austerity does not need to be explained to any one of us. However, compensation for victims of the Equitable Life scandal is not something that can be subjected to cuts. My constituents have already lost enough time and nerve trying to fight this injustice and I urge my hon. Friend the Minister to honour the outstanding debt.

I want to take this opportunity to congratulate the Government on what they have done so far. It certainly was not their fault that we were left with these terrible financial difficulties, but it is not right that the role of the auditors and external consultants should go unmentioned. They should be held to account for this scandal. Ernst and Young was providing audit services to Equitable Life. The company’s bosses now say that they regard this to be a closed case, as the individuals responsible have now retired. However, it is very far from being a closed case and a happy retirement for our constituents who are waiting for the remaining 78% of their money to be paid out. I reiterate that this is not just about spending taxpayer’s money. It is about the credibility and respectability of this Government and of UK financial services, and about the trust in our ombudsmen system.

Oral Answers to Questions

David Amess Excerpts

Tuesday 4th November 2014 Commons Chamber

[Mr Osborne]

We have cut taxes for 25 million working people. In Bolsover, there are more people in work, fewer people unemployed and the claimant count is down by a third. It is the Conservative party that is the party of the working people now.

[Mr David Amess (Southend West) (Con)]

T4. Does my right hon. Friend agree that the level of employment is a good economic indicator? If so, will he join me in congratulating Southend businesses on their outstanding apprenticeship schemes, which have helped a huge number of young people and reduced youth unemployment by 47%?

[Mr Osborne]

I certainly congratulate Southend businesses on the apprenticeship schemes they run. Apprenticeship schemes number 2 million in this Parliament and we aim to take that figure to 3 million in the next Parliament. That is all towards achieving our goal of full employment. We have the highest number of people in work, but we want to go further still.

Public Sector Executive Pay and Governance

David Amess Excerpts

Wednesday 15th October 2014 Commons Chamber

[Mr David Amess (Southend West) (Con)]

The Economic Secretary to the Treasury and I are both Members of Parliament and politicians, and, as such, we are under no illusion as to how politicians are regarded. We are blamed when things go wrong and, from time to time, we are praised when things go right, and we make no apology for any of that. As Members of Parliament, we are paid £67,060, and the pay for the Prime Minister is £142,500. Some people would say that that is a lot of money, and it is compared with the pay of all sorts of people, but the Minister and I are judged by the electorate every five years. If they do not like us, they can get rid of us, and if they do not like our party, we may pay the price for that too, so we are constantly judged.

What I am increasingly angered by is the way public sector governance and executive pay are not working. I am sick to death of the relationship between chief executives and the chairmen of local authorities. There seems to be, in all sectors, a very cosy relationship, and there is no rigorous scrutiny whatever. The late Baroness Thatcher once famously stated:

“There is no such thing as public money; there is only taxpayers’ money.”

I called for this debate because there is, and has been under previous Governments, a huge problem with the ease with which taxpayers’ money is spent.

There are many hard-working people in the public sector, and I praise all of them, including those in the health service, the police and education, for doing a fantastic job under difficult circumstances. Thirty-one years ago, when I became a Member of Parliament, I did not think that I would be making this speech. I now think that the management of some public services is not up to scratch, and the salaries paid to the executive directors are in many cases absolutely outrageous and unjustifiable.

I have, of course, touched on this subject in previous debates, but I am sadly not sure that any action has been taken as a result of what I said. I have been looking very closely at how the management of my local public services function and to say that I have been unsatisfied with them would be an understatement. Of course, Madam Deputy Speaker, you are a fellow Essex Member and are proud to be so, and I am well aware that some of these organisations serve your constituency as well.

I have raised the issue of my local mental health trust, the South Essex Partnership University NHS Foundation Trust—or SEPT—my local hospital and probation services on many occasions in the House. Let me repeat once again that I will not let the matter drop when it comes to any of those services until I see a satisfactory and radical change of management.

This is not just about Essex and my constituency of Southend West. It is a nationwide issue. At 48.5% of our GDP, we have one of the highest public spending levels in the world. We spend more on public services than Germany, Japan, Canada, the USA, Brazil, Russia, Australia, Switzerland, South Africa or Singapore. Whereas I wholeheartedly support our hard-working medical staff and our wonderful police officers, taxpayers’ money could be managed much more efficiently and fairly.

Many aspects of our public expenditure need to be addressed. For instance, we contribute a net amount of €9.2 billion to the European Union—when the Prime Minister renegotiates things I know that that will be at the top of his agenda. We subsidise trade unions with the stunning amount of £113 million per annum, and lose 2.6% of total hours on sickness leave in the public sector, as opposed to just 1.6% in the private sector. However, I am going to concentrate more specifically on the problems that should be addressed in public sector governance and the salaries of public sector executives. When what I have to say is reported in Hansard, some of the individuals concerned will not like it.

My major concern about executive pay is not the amount of money directly paid to the director, but rather how in many cases it seems inversely proportional to the quality of service provided. We seem to be rewarding failure, which is absolutely and totally unacceptable. I have done some numerical comparisons of my own and the figures at which I have arrived are shocking. I attempted to compare the ratio of directors’ pay to the income from activities at various hospitals. For this reason, I compared my local NHS foundation trust’s management, with which I am very unhappy, and Salford Royal NHS Foundation Trust, which appears to provide exemplary service to patients and has displayed some excellent management.

It turns out that Salford hospital spends only 0.2% of its income from activities on directors’ pay, whereas SEPT spends 0.5% and Southend hospital 0.6% of their income from activities on directors’ pay. Let me reiterate: both SEPT and Southend hospital have management boards that are not suitable for their roles and yet they spend twice and three times as much respectively on rewarding their directors. That is absolutely unacceptable.

I want to provide some examples. The departing chief executive of Southend University Hospital NHS Foundation Trust—we do not know whether the individual has gone voluntarily or what has gone on, but we have been saddled with a huge amount of debt—took a pay rise of £20,000 in the last year. When I challenged the individual on that, because I had been told that it was £25,000, they said, “David, you’ve got it completely wrong. It’s £20,000.” That is absolutely ridiculous: a £20,000 pay increase, and the deputy took a £15,000 pay increase in the past year.

It gets worse. The commercial director at Southend university hospital trust, who is paid £112,500, took a pay rise of £40,000 last year. The former deputy chief executive, currently chief executive at SEPT, is on a salary of £167,500 plus £22,500 employers’ pension contribution. I know that my hon. Friend the Member for Colchester (Sir Bob Russell) is served by the same trust.

The former chief executive at SEPT—I have talked about the trust many times in the House—received a salary of £217,500. That is crazy. What on earth was the chairman of the board thinking? It gets worse, because they also received £32,500 in employers’ pension contributions. That is absolutely outrageous. While all that was going on, the then deputy got the job of chief executive.

The former executive director of strategy and business development at SEPT, who has a close relationship with the former chief executive—I believe that individual was hired in contempt of the non-fraternity policy and am following up the issue with Monitor—does a totally unnecessary middle-management job with a salary of £147,500 and £22,500 in employers’ pension contributions. Most shockingly of all, when that individual left SEPT—coincidentally with the chief executive—in October 2013, he received an exit package of £470,000. That is absolutely outrageous, and I will not shut up about it or allow a line to be drawn under the matter simply because it happened last year. I will keep going on about it until those responsible for this outrageous abuse of taxpayers’ money are held to account.

The executive chief finance officer at SEPT received a salary of £207,500 and £22,500 in employers’ pension contributions. It is marvellous that at the Liberal party conference we were guaranteed certain waiting times for mental health appointments and all that, but the reason I get so many complaints about mental health services from my constituents is the appalling mismanagement of SEPT.

The executive director of corporate affairs at SEPT, another unnecessary middle-management person—why the trust needs someone in that role, I do not know—received a salary of £132,500 and £17,500 in employers’ pension contributions. That is more or less the same as the Prime Minister. Whatever anyone thinks of the current or previous Prime Ministers, as far as I am concerned it is the toughest job in the public sector.

It is also outrageous that the chief executive of Essex county council receives a salary of £210,000 and total remuneration of £254,769—over £100,000 more than the Prime Minister. That is absolutely ridiculous and totally unacceptable. It is a matter that I think Essex county council should address pretty quickly.

The TaxPayers Alliance’s list of the highest-paid council employees ranks Essex as the place in England with the greatest number of council employees who earn more than £100,000—there are 30 such employees in Essex. That is crazy. Those officers might turn up to the House of Commons to brief us on an issue, yet they are earning a hell of a lot more than we are. The director-general of the BBC, which is publicly owned and, frankly, has not had a great record over the past years, is paid £450,000. That is absolutely ridiculous and totally unacceptable.

I am not going to name names, but Essex MPs were lobbied today by a number of individuals, and at one of those meetings three of those officials turned up, which I think was ridiculous, as one would have been quite sufficient. When I asked about their salaries, I found that one was on £140,000 and the other two were on £111,000. It is absolutely ridiculous. I have been in contact with the Royal College of Nursing, which is calling on all NHS senior managers to demonstrate the kind of pay restraint that nursing staff have been forced to accept in recent years.

I have identified a number of unnecessary jobs in the public sector, such as the overpaid “commercial director” position at Southend hospital and the “executive director of strategy and business development” at SEPT. However, this is just the tip of the iceberg, as lots of unnecessary, middle-management positions are created across the country in the public sector, and it is the taxpayer who pays for this arrogant self-indulgence.

The TaxPayers Alliance has tried to scrutinise public expenditure, and it has identified 1,129 unnecessary jobs in the NHS alone, costing £46 million. According to its report, taking the east of England as an example, there are 52 unnecessary public relations jobs in the NHS. Why we need to have all these public relations people, I do not know. If the organisation is doing such a marvellous job, I would have thought that the media would cover it in any case, and it would be self-evident. I should think it is more like having 52 apologists. There are also four unnecessary equality jobs, six green jobs, and three other unnecessary jobs.

Among other non-jobs in my constituency, the TaxPayers Alliance lists two “communications managers” and an “estate and environment manager” at SEPT, as well as an “equality and diversity manager” and “head of communications and engagement” at Southend hospital. I am sure we would agree that equality, diversity and the environment are all very important, but they should somehow be incorporated into the daily duties of the top management instead of creating a number of full-time, very well-paid managerial positions to deal specifically with such issues. This is all happening at a time when Southend hospital’s management is facing a £8.5 million deficit. How has this been allowed to happen? Where is the governance? It is absolutely outrageous. To make matters worse, Southend hospital is now hiring an external consultant and has the nerve to ask hospital staff for ideas on how the hospital should manage its own finances. That really is taking the mickey, frankly.

Governance in the public sector should be addressed. The general guidance provided to the public sector services—for instance, NHS trusts—is that boards of directors have responsibility for the quality of care and for the ongoing financial stability of their organisations. In NHS foundation trusts such as Southend hospital’s South Essex Partnership University NHS Foundation Trust—or SEPT—boards of directors are held to account by the council of governors, which is elected by the foundation trust’s membership of various stakeholders, including the local public, patients, carers and staff. The council of governors is led by the chairman. Whereas that form of governance appears reasonable in theory, in practice we encounter many problems on various levels in terms of whether the dog is wagging the tail or the other way round.

It is simply unbelievable that the chairman of SEPT remains in position—she has been there since 2008— having allowed a number of scandalous developments, which I have articulated this evening, to take place. Where was the governance there? It was under her leadership that the former chief executive appointed his partner to a very highly paid middle-management job, and under her leadership that the latter employee left with an exit package of nearly half a million pounds. If Monitor is worth anything, I want it to do something about it.

How it is possible that the chief executive of the former Essex probation service, currently Essex community rehabilitation company, is still in her position? I remember that 10 years ago the probation service was judged to be failing. She hung on to her job, and now she and the chap who had been chairman for two and a half years seem to be setting up another organisation, hoping to be one of the successful bidders.

I have serious concerns regarding chairmen’s independence from the chief executives, as illustrated by Southend hospital. The chair of the foundation trust is supposed to overlook the work of executive directors. In the case that I am concerned about, the individual seems impotent and unaware of what is happening at his hospital. Indeed, I was there with an Essex colleague who was meeting the hospital chairman for the first time and did not know who he was, even though he had been chairman for three years.

Problems and irregularities at the top management level are adversely affecting other members of staff. Morale was affected as a result of the £20,000 pay rise. Guidance was given that people paid more than £100,000 should receive no pay rise at all. At the same time, staff morale seems to be at an all-time low, as the management fails to retain and motivate the hard-working medical and non-medical staff.

It recently hit the headlines that the hospital faces a £8.5 million deficit, and it is justifiable to believe that a bulk of that sum is due to the fact that the hospital’s management fails to attract and hire permanent staff and instead relies heavily on agency staff. It is estimated that the hospital spent as much as £6.9 million in just five months on agency staff. There are a huge number of vacancies at the hospital. The situation is absolutely ridiculous. What is wrong with the recruitment?

The internal financial crisis at Southend hospital is serious, but it could have been avoided. Clear guidance needs to be provided to the public sector management to boost its knowledge of skilful management as well as its ethical approach to excessive pay.

The use of external consultants should be looked at very carefully. It is outrageous that Southend hospital has just hired an external consultant to look at its financial problems, despite already having a highly paid full-time director of finance. The services of the external consultant will come with a cost of hundreds of thousands of pounds to the taxpayer. If Southend hospital needs to resort to external financial advice, what is the point of having a full-time financial director?

I apologise to my hon. Friend the Economic Secretary for bombarding her with all these facts and figures, but she will realise that I am somewhat frustrated. This is not the first time that I have raised the matter in the House. I will end with what I said at the start: my hon. Friend and I are both politicians and we are blamed for most things, but I think we are being badly let down with regard to the matters under discussion. I know that I can rely on her to do her best to address those problems.

Finance (No.2) Bill

David Amess Excerpts

Tuesday 8th April 2014 Commons Chamber

Clause 1 ordered to stand part of the Bill.

[The Temporary Chair (Mr David Amess)]

I have to report to the Committee that the tellers for the Noes in the Division on amendment 2 have reported to the Chair that they wrongly reported the number as 289 and not 288. I will call for the record to be corrected accordingly, showing 288 Noes.

New Clause 1

Childcare provision

‘(1) The Chancellor of the Exchequer must undertake a review of ways in which changes to the tax and childcare systems could be used to increase the affordability of childcare before April 2015, with particular reference to—

(a) the cost of childcare for parents in work; and

(b) the cost of childcare, including the impact of changes in the tax and benefits system during this Parliament.

The Chancellor must publish the report of the review within six months of the passing of this Act and lay the report before the House.’.—(Catherine McKinnell.)

Brought up, and read the First time.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

I beg to move, That the clause be now read a Second time.

It is a pleasure to serve under your chairmanship, Mr Amess. New clause 1 draws attention to the rising costs of child care for working parents since 2010, and seeks to commit the Government to addressing their failure in that regard. It also seeks to establish ways in which the tax and benefit systems could be used to make child care more affordable before April 2015, so that hard-working families experiencing a cost of living crisis can have the help that they need now, especially in the light of the challenges that they face as a result of changes made by this coalition Government.

The new clause gives us a welcome opportunity to explore one of the most pressing issues that face millions of parents throughout the country, and to address the fact that millions of families are facing a child care crunch. It is important to set the issue in context by revealing just what has happened to child care costs on this Government’s watch. The average bill for a part-time nursery place providing 25 hours a week has risen to £107, the highest level in history. The cost of nursery places has risen by 30% since 2010, five times faster than pay, and the average weekly cost of a full-time place has risen to £200 or more. That means that parents working part time on average wages would have to work from Monday until Thursday before they had even paid their weekly child care costs.

Oral Answers to Questions

David Amess Excerpts

Tuesday 25th June 2013 Commons Chamber

[Mr Osborne]

Of course, as we discussed earlier, the capital position of the banks is important, but the funding for lending scheme is now focused on small business lending. I know that there is a particular issue with the very tough situation that the banking sector faces in Northern Ireland and the problems from the Irish Republic that have spilled over into Northern Ireland. One thing we are doing with the Royal Bank of Scotland is looking specifically at Ulster and the issues surrounding some of the bad loans made in the past, and at how we can help that bank to make good loans in the future to help the businesses of Northern Ireland. We are specifically supporting the Northern Irish economy and we are aware of its problems.

[Mr David Amess (Southend West) (Con)]

Does my right hon. Friend agree that extending rate relief to a further half a million small businesses will help many of them in the constituencies of Southend West and Rochford and Southend East?

[Mr Osborne]

Small business rate relief has helped many small firms to cope with the cost of rates, and we have been able to extend it year after year. We will have to make a decision later in this Parliament about a further extension, but there is clear evidence that the current extension is doing a great deal of good.

Finance (No. 2) Bill

David Amess Excerpts

Wednesday 17th April 2013 Commons Chamber

[Geraint Davies (Swansea West) (Lab/Co-op)]

On a point of order, Mr Amess. The Minister is not addressing new clause 5. Surely this is not in order.

[The Temporary Chair (Mr David Amess)]

I am sure that the Minister has heard the point of order and now perhaps will address his remarks more precisely to the new clauses that we are debating.

Oral Answers to Questions

David Amess Excerpts

Tuesday 12th March 2013 Commons Chamber

[Mr Osborne]

We are increasing the personal allowance for 24 million people. Bankers’ bonuses were £15 billion a year when the shadow Chancellor was City Minister, but they have come down to just over £1 billion—a dramatic reduction as we now have a more responsible financial sector.

[Mr David Amess (Southend West) (Con)]

T5. With the whole of the United Kingdom getting behind Southend’s bid to be city of culture in 2017, will my right hon. Friend tell the House what economic benefits such an award would bring?

[Mr Osborne]

My Parliamentary Private Secretary, my hon. Friend the Member for Hastings and Rye (Amber Rudd), has just said in my ear that her constituency is also bidding. I will not take sides, but I know that Southend will put in a very strong bid, as will Hastings. The decision will be announced shortly.

Oral Answers to Questions

David Amess Excerpts

Tuesday 29th January 2013 Commons Chamber

[Sajid Javid]

My hon. Friend is right to be proud of the Government’s achievements on Equitable Life. The previous Government had a decade to help victims of this scandal and did absolutely nothing. As mentioned, more than £500 million of payments have already been made. I can assure my hon. Friend that I am in regular contact with the scheme administrators, and I will work closely with them on a regular basis to ensure that things can be improved.

[Mr David Amess (Southend West) (Con)]

T1. If he will make a statement on his departmental responsibilities.

[The Chancellor of the Exchequer (Mr George Osborne)]

The core purpose of the Treasury is to ensure the stability and prosperity of the economy.

[Mr Amess]

My right hon. Friend will recognise the valuable work that public sector workers do, by and large on our behalf, but he will also acknowledge the fact that their earnings have increased by only 1%. Is it the Government’s policy that benefits will not increase by any more than the increase in public sector pay?

[Mr Osborne]

It is the Government’s policy that both should rise by 1%. It is a rather bizarre argument advanced by the Labour party—that public sector pay should go up by 1%, but benefits should go up by more than 1%. The Opposition are the people who will have to explain it to the hard-working public sector taxpayers who have to pay for the welfare system.

Humber Economy (Fiscal Support)

David Amess Excerpts

Tuesday 27th November 2012 Westminster Hall

Motion made, and Question proposed, That the sitting be now adjourned.—(Mark Lancaster.)

[Mr David Amess (in the Chair)]

Hon. Members will have noticed new clock displays in the Chamber. The top display is the current time, as before. When a speech is not being timed, the bottom display will show the time it started, also as before. If it becomes necessary to introduce a limit on speeches, the bottom display will change to show the time remaining to the Member who currently has the floor. As in the House, the display can award an extra minute for each of the first two interventions in a speech, but there will be no time limit today.

--- Later in debate ---

[Several hon. Members]

rose—

[Mr David Amess (in the Chair)]

The wind-ups will start at twenty to 11, and five colleagues wish to speak, so if my maths are correct, about 10 minutes each should do it.

Oral Answers to Questions

David Amess Excerpts

Tuesday 24th April 2012 Commons Chamber

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

As financial advice, I am not sure it is necessarily wise to dismantle and then rebuild a listed building to make a saving, but there is an anomaly in the tax system: people pay VAT for a repair on a listed building, but they do not pay VAT for an alteration. That does not seem right.

[Mr David Amess (Southend West) (Con)]

T7. What action have the Government taken to prevent multinationals from funnelling their profits into tax havens, as some do, rather than paying their taxes to the developing countries where they have subsidiaries?

[Mr Gauke]

The Government have taken great action to increase tax transparency, and on ensuring that there is more of an exchange of information between jurisdictions. We have taken action to prevent Switzerland, for example, being used as a place to facilitate tax evasion. In addition, Her Majesty’s Revenue and Customs provides considerable support to developing countries to improve their capability and capacity to collect tax revenues, which are very important.