Oral Answers to Questions

Debate between Andrea Leadsom and Sheila Gilmore

Tuesday 27th January 2015 Commons Chamber

[Andrea Leadsom]

I congratulate my hon. Friend on expressing the importance of a second line of defence. The Government are determined to give pensioners the opportunity to make their own decisions about what to do with their pension savings. Nevertheless, it is vital to ensure that they have reasonable protections.

[Sheila Gilmore (Edinburgh East) (Lab)]

There were reports yesterday that some people who exercise these rights might face large tax bills that they did not know about. Will the Minister be absolutely clear about what measures will be put in place to ensure that people are not disadvantaged, because she knows, as I do, that people are already being approached informally to get them to exercise these rights?

[Andrea Leadsom]

I reassure the hon. Lady that we have sought to give people the opportunity to make their own decisions about what to do with their lifelong savings. That is far better than in the past, when they were effectively told, “You buy an annuity and that’s that.” We are putting in place clear protections, with a criminal measure on scamming and on pretending to be the Government’s pensions guidance service, and there will be proper guidance, with fully qualified guiders who are able to help people through the process. There is now a further line of defence, because pension providers will be required to point out to people the vital importance of taking guidance or regulated advice.

Oral Answers to Questions

Debate between Andrea Leadsom and Sheila Gilmore

Tuesday 24th June 2014 Commons Chamber

[Sheila Gilmore]

I thank the Minister for that reply, but when in five London boroughs, for example, the value of properties sold under the scheme has been over £400,000, have we not reached the point at which we should be reviewing this urgently, because at the same time we are hearing increasing calls for the Financial Policy Committee to look at cooling the housing market? We could be cooling the mortgage market on the one hand and encouraging higher prices through Help to Buy on the other. It does not make sense.

[Andrea Leadsom]

The hon. Lady should be aware that the numbers just do not support what she is saying. In fact, 94% of all completions under Help to Buy are outside London, the average price of a home under the mortgage scheme is around £151,000, which is well below the UK average of £260,000, and only 1.3% of total mortgage lending is under the Help to Buy mortgage scheme.

High Speed 2

Debate between Andrea Leadsom and Sheila Gilmore

Tuesday 14th January 2014 Westminster Hall

[Sheila Gilmore]

Personally, I would like to see it starting at both ends. I would be interested to learn the proposals of the Scottish Government to assist in achieving that within the powers that they have.

A number of objections are made to the arguments about capacity. Some people argue that the high rate of growth in long-distance travel—it has been about 4.8% a year—will not continue, but that is unlikely, given the patterns we have seen. The factors that are pushing people away from their cars and on to trains—high petrol prices and congested roads—are unlikely to change any time soon. Any type of sustained economic growth, which we all say we want, is likely to push demand for long-distance travel up further, not reduce it. On top of that, there are the predictions for growth in our population, which are now well established.

[Andrea Leadsom (South Northamptonshire) (Con)]

Since the hon. Lady agrees that High Speed 2 is about capacity not speed, what assessment has she made of the difference in cost between going at high speed across floodplains, with tunnelling and the like through and across environmentally sensitive areas, versus the cost of going at a slightly lower speed around the problematic natural areas within England and Scotland that the HS2 link will have to go through?

[Sheila Gilmore]

I understand the hon. Lady’s concerns, but if we are to make a serious step change in our rail investment, this scheme is the appropriate route to take.

The other point that some people have raised about capacity is that some inter-city trains operating at peak times—those operating in and out of Euston, for example—are not actually full and we should use that capacity before building a new line. However, on present patterns, it is likely that that capacity will be used up by the time the new line is built. London Midland trains, for example, which serve many commuter towns on the west coast main line, are already full to bursting and room must be created for trains to serve those destinations. Upgrading the west coast main line would be difficult and disruptive and would not provide the other benefits.

Some people have argued that HS2 would not release useful capacity around Birmingham, Manchester and Leeds. Existing services will still be needed in some places, but those trains will be able to stop at intermediate stations. The lines will remain and the trains will be able to stop at more intermediate stations without holding up longer-distance travellers, giving a substantial boost to regional connectivity. For example, stations between Coventry and Birmingham New Street would stand to gain more services.

We could tackle commuter demand at the southern end of the west coast main line by building more cross-rails. One is being built at the moment and another is planned. I am not saying that those schemes are not helpful, but if such an approach continues it will exacerbate many of the problems created by London’s dominance and would not help economic growth in other parts of the country. People often suggest that other schemes could achieve that, but no one has come up with firm proposals in which we can have confidence. The main transport corridor between Newcastle, Leeds, Manchester and Liverpool—the trans-Pennine route—is already being electrified and will provide that greater connectivity, which is good. This is not a matter of either/or.

The other argument that is often raised is that the business case is not sufficiently strong. Perhaps one of the biggest arguments is about the use of time and the value that is placed on that. People say that in the modern age people can work on trains so there is not the same value to be gained from speeding up journey times, but that does not make up for the fact that it is even more valuable if staff can arrive at their destination and return in a shorter time. Although the cost-benefit ratio is low compared with smaller projects—some people have suggested that road bypasses have a much higher cost-benefit ratio—we cannot build a whole network with small projects. As large projects go, HS2 is relatively good value for money.

There are wider economic benefits that are not always captured in the business case. One argument that I have already addressed but want to talk about a bit more is that HS2 will be a disbenefit to the midlands, the north and other parts of the UK. Examples sometimes cited from Europe are that high-speed rail there has not benefited the places to which it goes. What matters is whether the project connects significant population centres.

Public Service Pensions Bill

Debate between Andrea Leadsom and Sheila Gilmore

Monday 29th October 2012 Commons Chamber

[Andrea Leadsom]

The hon. Gentleman will recall that the Government made great efforts to ensure that the cliff edge affecting certain women born in a certain couple of years disappeared. He will also be pleased to note that the pensions of those with less than 10 years until retirement will not be affected by this measure, which provides the ring-fencing for those with not long to go until retirement age. I would have thought that he would welcome that—again, on the basis of fairness between those workers and the taxpayer.

Of course, two thirds of private sector workers are not members of a pension scheme. We have heard hon. Members from all parts of the House say that we do not want a race to the bottom. We are proud of our public sector pension provision, and nobody would wish to see it brought down to the abysmal level of private sector pensions. However, it would be pleasing if Opposition Front Benchers were to concede their part in the destruction of private sector pensions, which has made a significant contribution to putting us into this pitiful position; private sector pensions have been decimated by the actions of the previous Prime Minister.

An important point of fairness is involved in the fact that the taxpayer contributes three times more to a civil service employee’s pension than the average private sector employer pays in. The employer contribution rate to the civil service pension scheme is 19%, whereas the average private sector employer contribution rate for a defined contribution pension scheme is only 6.4%. To get the same pension in the private sector, someone would have to contribute about a third of their salary.

[Sheila Gilmore (Edinburgh East) (Lab)]

There is something extraordinary in what the hon. Lady has just said, which several of her colleagues also said. They say, “We don’t want to compare with the private sector. We don’t want to have a race to the bottom.” They then say, “But” and come out with a long string of comparisons about employers not paying as much. If this has nothing to do with comparisons with the private sector, they should stop comparing.

[Andrea Leadsom]

The hon. Lady makes an extremely good point. I am not advocating that we reduce public sector pensions to the private sector level, but this does, of course, absolutely bear comparison. This Government are not reducing public sector pensions to the pitiful state the Labour Government left private sector pensions in when they left office. That is precisely the point I am trying to make. We are proud of the fact that our public sector pensions will remain among the best in the world. That is something to be very proud of, and the Opposition should be congratulating the Government on having achieved that at this extraordinarily difficult time.

Let me disabuse Members of one final myth. The Opposition like to say that private sector workers earn more, so private sector pensions make up for the shortfall in salaries. That is not the case. The Institute for Fiscal Studies calculates that on average hourly public sector wages are 7.5% higher than hourly private sector wages, even when we take into account an individual’s education, age and qualifications. That is a very important point. Public sector pensions do not subsidise lousy working rates—quite the opposite, in fact. Those in the public sector rightly have a good deal in their employment and in their pension. That is what we wanted to achieve and I commend those on the Front Bench for doing so.

The most important aspect is sustainability, because what we had was unsustainable. Over the past decade, public sector pension costs increased by a third in real terms. Between 1999-2000 and 2009-10, the amount of benefits paid from the five largest public service pension schemes increased by 32% in real terms. In five years’ time, we are set to spend £33 billion a year on public sector pensions—more than on police and transport combined and 1.8% of GDP.