Brian H. Donohoe
Main Page: Brian H. Donohoe (Labour - Central Ayrshire)Department Debates - View all Brian H. Donohoe's debates with the Scotland Office
Public Sector Pensions
Brian H. Donohoe Excerpts(13 years ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Hywel Williams
The hon. Gentleman is a keen student of Scottish affairs, and possibly of Welsh affairs as well. He will know that the block grant has been falling, and that the choices available are limited.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
Does the hon. Gentleman not accept that the Labour-run Scottish Executive also had to make choices? When they undertook to introduce free travel for the elderly, they had to do so on the basis of the block grant, and the SNP would have to take a similar hit if they did what the motion suggests.
David Mundell
As the hon. Lady knows, the Treasury underwrites the scheme. The Treasury requires to be paid out whatever is required to be paid out in relation to the scheme. The scheme does not operate on a basis of contributions and pay-outs, because the Treasury is underwriting the scheme so that everybody is paid in full as is their entitlement.
Mr Brian H. Donohoe (Central Ayrshire) (Lab)
I thank Plaid Cymru and the Scottish National party for securing this debate and for ensuring that the damaging pension plans continue to be at the top of the political agenda.
As the Minister said, the SNP had choices. In relation to the final part of the motion, the SNP gave away its choices in refusing the opportunity that it had in the Scottish Parliament to vary taxes by 3p. If it had accepted the need to continue with that, it could have used it towards the contributions that are required. There has been a lot of talk and nonsense about that from Members who have now left the Chamber. They know full well that that is the case.
Dr Whiteford
It sounds as though the hon. Gentleman is proposing that we increase taxes in Scotland to pay for pension increases. Is that really what he means?
Mr Donohoe
We live, at this stage, in the United Kingdom. If the SNP is suggesting that Scotland has a different set of circumstances for pensions than England or Wales, there is something wrong with the system. We live in the United Kingdom and SNP Members have to accept that. I have more in common with a joiner in Newcastle than with the director of the Royal Bank of Scotland. That is the way that SNP Members should think as well. They had choices and they denied themselves the opportunity to make them.
This matter affects many of my constituents. My constituency has 4% more public sector workers than the United Kingdom average. Some 39,300 of my constituents work in the public sector, about two thirds of whom are women. The pension proposals will affect women more than men, because they are the lower-paid in society.
Mel Stride
As Christmas approaches, could the hon. Gentleman find it in his heart to congratulate the Government on taking more than 1 million low-paid workers out of tax altogether, many of whom are exactly the women he describes?
Mr Donohoe
I do not accept that at all. This Government have put up VAT, which is affecting all the low-paid people across the country more than it is the likes of the hon. Gentleman. He should not delude himself that the situation is different.
My mind has been taken away from this subject over the past week, because young Jack Samuel Donohoe, my second grandchild, was brought into this world at five past 12 on Monday. Jack, his mother Pauline and his father Craig are all doing very well. I mention that only because when my first grandchild was born about three weeks ago, I mentioned it in a debate and I felt that it was only right to mention the second.
Madam Deputy Speaker (Dawn Primarolo)
Order. I am sure that the hon. Gentleman will use that point to talk about how long we are all living and return to the motion.
Mr Donohoe
I am grateful to you, Madam Deputy Speaker, for that guidance. I am sure that that is what I was about to say. In about 70 years, my grandchildren will collect their first pension. I want it to be a decent pension, regardless of whether they are in the public sector or the private sector.
At the age of 22, I first became involved in pensions as a trustee of the pension scheme at the Ailsa shipyard where I worked. I have always had an interest in pensions as a result. Many people do not have a clue about pensions. I have always accepted that a pension is deferred income. My pension is part of my income, and pensions are the income of every person who contributes. It is income that this Government are taking from individuals. I know that and other hon. Members should know it.
Mr Donohoe
The hon. Gentleman obviously does not understand what I have just said. It is clear that most people do not understand that pension contributions by an employer are deferred income. They are part of a person’s income and should be treated as such regardless of whether they are in the private or public sector. That should be known to everybody.
The increase in contributions that was announced in the spending review will not be used to pay for pensions. My understanding is that that £2.8 billion is specifically to be used to reduce the deficit—that is in the Red Book. Perhaps the Minister would like to establish in his winding-up speech whether that is right. I also understand that the proposal was a political choice by the Government rather than being made out of necessity. They have scrapped Labour’s tax on bankers’ bonuses, which was to raise more than £3 billion in revenue, and replaced it with a tax on public sector workers’ incomes.
Those changes are being made against a backdrop of a two-year pay freeze for public sector workers, which of course was announced on the eve of last week’s strike. That was a very provocative statement intended, I suggest, to fan the flames of dissent among public sector workers. The changes also come at a time when inflation is running at about 5%. That in itself has reduced the value of public sector pay by almost 10% in real terms, which is not sustainable in the current climate. We all understand that we have difficult choices to make, and we all understand the state of the economy, but pensions should be considered for the long term. It is patent that that is not happening.
Mr Donohoe
No, I am just about to sum up, so I will not give way again.
I finally wish to touch on the effects that the changes will have on our armed forces, a section of the community for whom I have great respect. It goes without saying that this punitive reduction will have a damaging impact on the morale of those who are prepared to make the ultimate sacrifice for our country. We must not punish our young men and women in the forces because one man cannot see the practical implication of his economic policies.