Oral Answers to Questions

Debate between Chloe Smith and Richard Fuller

Thursday 1st October 2020 Commons Chamber

[Chloe Smith]

I admire the passion and experience with which the hon. Member speaks. I will say straight off that the report produced for the Scottish Government is a matter for them. I understand that it has reported, but that is not for me to comment on.

The core point is this: since the strike of 1984-85, there have been very significant changes in the oversight of policing at every level. I am not sure that it would be worth the efforts of an inquiry to be able to make sensible comments on that, given the quantity of change, and that the focus should instead be on continuing to ensure that the policing system is the best that it can be. I can also add that all the 33 files the Home Office had held relating to that strike have now been transferred to the National Archives and that these are available for the public to review.

[Richard Fuller (North East Bedfordshire) (Con)]

With reference to the speech he made at the Ditchley annual lecture on 27 June 2020, what progress he has made on implementing changes to the public service.

United Kingdom Internal Market Bill

Debate between Chloe Smith and Richard Fuller

Tuesday 15th September 2020 Commons Chamber

[Richard Fuller]

I think I have the answer—it might not be the one he thinks he is conveying—which is, there is none. There is no answer to how disputes will be resolved because it does not appear that that has actually been achieved.

[The Minister of State, Cabinet Office (Chloe Smith)]

I think I can clear some of this up. Essentially my hon. Friend is right and the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) is not right. The very meetings the hon. Gentleman has just described are still going on and will deliver five frameworks by the end of the year, so I hope he will withdraw his remarks about how that programme is not being co-operated with, because that is simply wrong. My hon. Friend is correct in that the section he refers to in the explanatory notes is, as the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully) will explain later, being delivered alongside the Bill.

Budget Resolutions and Economic Situation

Debate between Chloe Smith and Richard Fuller

Tuesday 22nd March 2016 Commons Chamber

[Chloe Smith]

I make two points to the hon. Gentleman. First, the percentage of people on zero-hours contracts remains about 2.5% of all who are in work. Secondly, as he will know from the small print of the Budget, for every £4 that somebody saves, the Chancellor will put in £1. That means that at the rate that the hon. Gentleman cites, for example, it is possible to consider taking up a savings product.

It is vital that those who come out of education and skills training have every possible opportunity, which is why the Budget is right to keep up job creation and investment in infrastructure. It is also crucial that we try to represent the values of the next generation. Generation Y —my own generation—and those coming after us value enterprise. Many will set up their own businesses, and many will work in a totally different pattern over their lifetime, so the Budget is smart to turn attention to the growing army of the self-employed. Many of the smallest businesses of all will welcome a drop in their NIC burden.

[Richard Fuller (Bedford) (Con)]

Will my hon. Friend use this opportunity to congratulate the Government on the start-up loans scheme, which has done so much to help young people to go into business and fulfil their entrepreneurial objectives?

[Chloe Smith]

I certainly will, and I welcome my hon. Friend’s reminder of that. I am sure he will agree with me on my next point, which is that we should also prize the ethical approach to business of many of those entrepreneurs. We should welcome the measures in the Budget that begin to make sense of taxing multinationals in the 21st century. The Government have my full support in ensuring that our tax system demands and gets a fair contribution from companies large and small, domestic and global.

Let me turn to the welfare measures in the Budget. As is well documented, Generation Y has a sceptical approach to the welfare state, and support for the welfare state has steadily declined by generation. We should therefore remind ourselves of the basic principles of what welfare is for. It is a safety net for when we are unable to look after ourselves, perhaps because of sickness, old age or disability. It is a safety net that we will all need in one way or another, so we all have a responsibility to maintain it. Because we are going to live longer on average than previous generations, we need to make sure it is affordable for the future. We also, of course, expect the richest to pay most. In summary, we need a sensible method of working out who needs most support and how to get it to them.

I did not support the measures announced in the Budget seeking to reduce support for the disabled through PIP. The manifesto on which I and my hon. Friends stood at the last election made it clear that we would spend less on welfare, but that we would do so by protecting the most vulnerable. I have supported the Government’s welfare reforms since 2010, principally because they put work first. Universal credit puts work first, as does the most recent reform of the rate for those who are on employment and support allowance and can work. In the 21st century, we should not write off people from work and independence; the policy of spending more on helping people to work despite a disability or a health condition is right.

In some cases, our welfare reforms have been about injustice in other ways, such as in relation to the removal of the spare room subsidy. For example, the pay to stay policy in our current Housing and Planning Bill will relieve taxpayers of subsidising the housing of those who may well earn more than they do, such as, dare I say it, the leader of Norwich City Council. These reforms are about fairness for taxpayers who foot the bill for a benefit they themselves could not expect to enjoy.

I am in the Chamber today to speak up for many constituents who simply want us to use limited resources to provide properly for those who need support. I helped constituents to record their concerns during the consultation on aids and appliances, and I am very pleased that my right hon. Friend the new Secretary of State for Work and Pensions has stopped that measure. We should protect the disabled and make savings elsewhere.

Our manifesto clearly pledged us to back pensioners. At some point in the future, however, we will have to look again at universal benefits. As I have said, the welfare state is a safety net, which means that pensioners need a decent income. That is why I wholeheartedly support the triple lock. But it does not necessarily mean that the most well-off pensioners need benefits as well, as my hon. Friend the Member for Peterborough (Mr Jackson) and my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) have already argued. When others are more in need—and, indeed, when there must be a balance with other generations—is it right to maintain such policies?

A Mrs Brown recently wrote to the Norwich Evening News letters page:

“Excuse me, but as a baby boomer I was…brought up in post-war abject poverty. We got an apple or orange for Christmas...I worked for everything I have. We never had credit and only had anything we could pay for or we went without.”

She is of course right. I deeply respect her and all my constituents, from any generation, who have worked hard and done the right thing. I am making an argument for fairness in the future, for helping those who most need it and for balance between the generations.

Oral Answers to Questions

Debate between Chloe Smith and Richard Fuller

Wednesday 19th June 2013 Commons Chamber

[Miss Smith]

As the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd) made clear in an earlier answer, many charitable organisations are already taking part and there are opportunities for more. What I take from the hon. Gentleman’s question is his willingness to work with me and others who care about making procurement better throughout the whole public sector, and encouraging local authorities to do their bit alongside the reforms we have achieved in central Government.

[Richard Fuller (Bedford) (Con)]

I applaud the Government’s steps to encourage charities to win public sector contracts, but does my hon. Friend believe there is a threshold to the proportion of income that charities receive from the public sector, above which they stop becoming charities because they are merely agencies of the state?

[Miss Smith]

My hon. Friend makes an interesting point, and it may be just as much the responsibility of trustees of an organisation to look at such issues within that organisation. The Government welcome the diversity of the sector and the opening up of Government procurement to those who can do the job well for value for money.

Charities (Donations)

Debate between Chloe Smith and Richard Fuller

Tuesday 8th January 2013 Westminster Hall

[The Parliamentary Secretary, Cabinet Office (Miss Chloe Smith)]

I thank the hon. Member for Glasgow North West (John Robertson) for a thoughtful, wide-ranging speech, and I welcome the additional comments provided by the hon. Member for Paisley and Renfrewshire North (Jim Sheridan). I venture to guess that my hon. Friend the Member for Warwick and Leamington (Chris White) was going to mention his valuable work on introducing the Public Services (Social Value) Act 2012, which I congratulate him on as well.

I turn to the comments made and the issues raised by the hon. Member for Glasgow North West in the debate today. I agree that charities play an important role in our society, and I take this opportunity to extend my thanks to the charitable organisations in this country that work so hard, and to those who work in them. They will be glad to see us taking these issues seriously in the House, and I know that there is much more that we must do.

I start with a general point that the hon. Gentleman will be well aware of. Matters pertaining to donations to charities in Scotland are, of course, devolved matters. He is nodding, and he will know as well as I do that it is for the Scottish Government to comment on those matters. Perhaps they have a clear idea of what they wish to do in the long term in Scotland about such things, but he and I can take that into a different debate any time that he wishes.

I turn to the broad issue of current donations and the health of the sector, which was raised in the hon. Gentleman’s speech and in reports a short while ago. Much has been said about the health of the sector generally, and I add that the picture is very mixed. Clear trends are not easy to discern at this stage. The evidence of recent reports from the Charities Aid Foundation suggests that charitable donations are down, while other evidence, such as the Taking Part survey commissioned by the Department for Culture, Media and Sport, finds that there is a slight increase in the proportion of people giving to charity. Similarly, the overall effect on the health of the charitable sector is unclear.

There are, however, grounds for optimism. Some reports suggest that the total income of registered charities has grown from £52 billion in 2009 to almost £59 billion now and that there are 2,000 more registered charities now than in 2009. Those figures are to be welcomed and cast an interesting light on the debate that we are having here today. What appears clear is that no one can say for certain whether donations are decreasing and certainly not at what rate. There is some debate in the sector about whether a decrease is what charities are experiencing on the ground.

We will need to wait and see if there is a clear trend in donations, but regardless of what trends emerge, it is also true that life goes on. We need to acknowledge that it is a challenging environment for charities and, clearly, for the people they serve. We should all make every effort to help the sector to raise money efficiently and effectively to meet the challenges, and that is exactly what we are doing. If the hon. Gentleman will allow me, I will go on to deal with a couple of ways in which the Government are seeking to play their part.

The hon. Gentleman referred to face-to-face fundraising, often referred to as chugging. That is certainly seen regularly in Norwich. Indeed, only recently I was corresponding with a constituent on exactly that matter. It is an important and successful method of fundraising, which can bring millions of pounds into the charitable sector every year, but I welcome the announcement in November by the Public Fundraising Regulatory Association and the Local Government Association of an agreed template for voluntary site management agreements as a way for local authorities to control chugging in their areas. I think that more than 50 site agreements are in place, with more being negotiated.

Much more is being done by this Government to support the sector, including by supporting a culture of giving both money and time—an important area of debate—by opening up new sources of income and finance through social investment or delivering public services where organisations decide that that is right for them and by providing wider support for the sector, thereby making it easier to set up and run a charity or social enterprise. All those actions support the health of the sector, either through increasing access to income of various kinds or through reducing costs and burdens, so that that income goes further.

The debate has focused on charitable donations, and perhaps the biggest help that the Government give to the sector is gift aid, which the hon. Gentleman went through in some detail. He will know that it is a matter for the Treasury. Although I used to be that Minister, I would not dream of going on to such territory here today, but he did mention his pride in chairing the debates in Committee on the gift aid small donations scheme, and I was the Minister responsible for much of the work on that and was deeply proud to be so, because it is a very good avenue of further help—up to £100 million a year, we hope—for the sector. I shall say more on that in a second.

I want first to deal with the administration of gift aid and ways in which traditional gift aid can be made better for the sector. My right hon. Friend the Chancellor of the Exchequer announced in the autumn statement that an examination would be carried out to identify ways to improve the administration of gift aid to reflect new ways of giving money to charity and, in particular, digital giving, to which the hon. Gentleman referred.

[Richard Fuller (Bedford) (Con)]

rose—

[John Robertson]

I accept what the Minister is saying. I have no doubt that she is right and I think that gift aid is a good idea. The problem is that the small and medium-sized charities seem to be suffering the most, and they do not seem to have the access to gift aid that the larger charities have.

[Miss Smith]

I shall be very happy to answer that, but first I shall take the other intervention.

[Richard Fuller]

On a similar note to what has been said by the hon. Member for Glasgow North West (John Robertson), rather than looking to reform gift aid, would my hon. Friend the Minister consider scrapping gift aid entirely and putting in place a system whereby people can make direct deductions from their taxation? If we want to create a culture of giving, nothing is better than letting people write a cheque to a charity. That is one way in which smaller charities would benefit, rather than having to go through the more cumbersome process of gift aid.

[Miss Smith]

My hon. Friend makes a fascinating point, and I am always very interested to hear his ideas, some of which I have time to debate at length with him in this Chamber. I shall ensure that that idea goes where it can be well considered.

In answer to the point made by the hon. Member for Glasgow North West, the instigator of the debate, I think that the most important way to help smaller charities is to reduce the costs and burdens associated with what the state can provide to charities. That includes what we did in Budget 2011, which made it clear that we intend to make it easier for charities to claim gift aid by introducing a new IT system that will allow charities to claim gift aid online and through, as I mentioned, the gift aid small donations scheme, which will allow charities of all shapes and sizes—we hope that it will be of particular benefit to small local charities—to claim top-up payments equivalent to gift aid on small cash donations of up to £5,000 a year, without the need to have gift aid declarations from donors. That scheme should commence in April of this year, and as I mentioned, it is expected that it will increase the amounts received by charities by about £100 million a year. It is my sincere hope that it will be put to very good use by smaller charities as well as others.

Small Charitable Donations Bill

Debate between Chloe Smith and Richard Fuller

Tuesday 4th September 2012 Commons Chamber

[Miss Smith]

I do not want this debate to descend into a battle of quotations—although I could, for example, provide the hon. Gentleman with a quotation from Mr Graham, the chief executive of a charity not far from my constituency, who has said:

“Being a very small charity relying on small private donations and monies collected in tins positioned in shops etc I welcome this Bill. It will certainly make a difference to the very needy children in Kenya that Mnarani Aid supports.”

The Bill has been broadly welcomed by the sector. It puts cash towards charities. I shall set out how it does that and deal with some of the points that some stakeholders have made over the summer and beyond. I am confident that the Bill does what it sets out to do, which is to support charities in a constructive way and the funding will be welcomed.

[Richard Fuller (Bedford) (Con)]

If I may, I shall take the Minister away from the details and towards the overall philosophy. In the tax treatment of charities, we can use the gift aid or “charity grabs back the tax” model or we could convert to a model whereby individuals deduct from their tax the charitable contributions they make, as happens in the United States and other countries. Was that general philosophical debate part of her consultation and deliberation on the Bill, or has she looked more specifically at how to improve and enhance the gift aid scheme with this new initiative?

[Miss Smith]

I shall try to be careful in responding. A number of interesting issues have been raised that are not necessarily part of today’s Bill. In addition, a number of improvements to gift aid have often been mooted or discussed, but they are not necessarily part of the Bill either. In direct answer to my hon. Friend’s question, therefore, the matters for consultation and scrutiny to date relate closely to this scheme and the mechanisms within it, which I shall now set out.

Under the scheme, charities will be able to claim top-up payments equivalent to the basic rate of tax paid on a donation, which is currently worth 25p for every £1 collected on small cash donations of £20 or less. Therefore, if a charity claims on the full allowance of £5,000 of small donations in a year, that will mean an additional £1,250 of income. It is that which charities will welcome. Hon. Members will know that tax reliefs for charities and charitable giving are an important source of income for charities, totalling over £3 billion a year. Of those, gift aid is the largest relief and is worth over £1 billion a year. We estimate that the gift aid small donations scheme could result in additional Government funding of around £100 million a year for charities and CASCs by 2015. That represents a significant boost in income for the sector and will be especially valuable to small charities. That is why—I again emphasise the point—this is a Bill that is to be welcomed and which has been welcomed by many across the voluntary sector.

To ensure that the new scheme is as accessible as possible to charities, it will be administered using the same mechanisms that apply to claims for tax relief under gift aid. The scheme will look and feel familiar to those charities and CASCs that already claim gift aid, and Her Majesty’s Revenue and Customs will publish clear guidance ahead of the commencement of the scheme to ensure that it is simple to access. However, because the new scheme will not be a tax relief, it cannot be legislated for through the usual Finance Bill route— I regret to deprive my hon. Friend the Member for Bedford (Richard Fuller) of the chance to serve on such a Bill and discuss the philosophical principle—so we are legislating for it in this programme Bill instead. The scheme was widely welcomed by the sector when it was announced in Budget 2011 and continues to be well received. We have worked closely with the sector to get the scheme right.

Let me now address some of the points of detail that have been raised, and which I am confident will be well understood by hon. Members. I shall set out the rationale for the ways in which we have designed the scheme, but first I want to set it firmly in the wider context. We have had to take steps to ensure that it operates as fairly as possible, but also to ensure that it remains affordable and is protected against fraud. We want this money to go to legitimate charities doing important work with real social benefit. We also want the small donations scheme to be as fair as possible. We want to ensure that charities doing the same kinds of work at local level, but which have different historical structures, get allowances under the scheme that are not hundreds, or even thousands, of times different from one another.

Those are the key driving principles behind the scheme: fairness, protection against fraud, and providing a complementary scheme to gift aid. We also want to channel some extra funding to charities, which I suspect that no hon. Member would want to speak against. I ask hon. Members to keep those principles in mind as we debate the detail of the gift aid small donations scheme. Let me take them in turn.

First, we want the scheme to complement gift aid rather than to replace it. I would urge all charities that receive donations to make full use of gift aid, where there is no limit on the amount of donations on which the charity can claim. However, there are some donations for which gift aid declarations are hard to come by, and that is what the scheme is designed to address.

Public Sector Pensions

Debate between Chloe Smith and Richard Fuller

Tuesday 19th June 2012 Westminster Hall

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

It is a pleasure to respond the points made by my hon. Friend the Member for Bedford (Richard Fuller). A number of us have heard him make those points passionately and eloquently in the House, and in a fairly factual way, I shall lay out what the Government are able to say in response.

Before doing so, I congratulate my hon. Friend on securing this debate, because he has been able use this platform to draw attention to the importance of ensuring affordability. He has spoken in robust and wise terms of the bombs that an irresponsible Government might leave for future generations, and I particularly congratulate him on raising such themes in his well-informed and practical discussion. I suspect that he will agree that it is a great shame that no Front Bencher from Her Majesty’s Opposition is here to join us in the debate. After all, they have a sizeable charge to answer in terms of what they left for future generations in this country.

I shall describe the situation that we face. As I expect you know well, Mr Leigh, the annual cost of public service pensions paid out has risen by more than a third over the past 10 years to £32 billion. To put that in context, as my hon. Friend did for other areas of spending, that figure is more than what is spent on police, prisons and the courts combined. Put simply, costs have of course increased because people are living longer. Although improvements in longevity are very welcome, the Government are therefore paying public service pensions for much longer than was expected when the schemes were designed. The bulk of that extra cost has mainly fallen on the taxpayer.

My hon. Friend is well aware that rebalancing the costs of providing pensions more fairly between employers, employees and other taxpayers requires bringing expenditure under control. We must make far-reaching structural changes to scheme designs, and that is what the Government are doing.

My hon. Friend has teed me up to deal with the remarks of Lord Hutton, who produced a landmark report—Members are well aware of it; perhaps you even have it on your bedside table, Mr Leigh—that took an impartial and comprehensive look at public service pensions. The Government are committed to implementing that blueprint, which will give us a new public sector pensions landscape. I do not intend to examine that landscape in detail, but I will make some points about it.

I emphasise, as my hon. Friend already has done, that this is not a race to the bottom. It is important to get public service pensions on a fairer, more affordable footing, but the Government must also ensure that the hard-working public service workers continue to receive pensions that are among the very best available. That is what has encouraged us to consider the changes so carefully. They have been discussed extensively with trade unions and other scheme representatives for more than a year, and those discussions continue.

The changes will deliver the Government’s objective to ensure that most low and middle earners who work a full career will receive pension benefits that are at least as good, if not better, than they would get now. They will also deliver our commitment to protect accrued pension benefits for those closest to retirement.

I have digressed somewhat, so let me return to the key point from Lord Hutton’s report with regard to this debate: the concept of funded versus unfunded. My hon. Friend has referred extensively to the Australian Government’s future fund, but we must bear in mind that we in this country are not alone in providing unfunded public service pension schemes. It is also fair to note that all pensions, whether funded or unfunded, are claims on the output of our successor generations. The great and truly visionary questions raised by my hon. Friend relate to intergenerational fairness, which is an issue that spans both funded and unfunded schemes. The funding status does not determine the sustainability or affordability of pensions, or the size of liabilities built up over time. Unfunded pension schemes are commonly used by Governments, because they are the most cost-effective way to provide pensions benefits over the long term. The method is available to Governments, but not necessarily to the private sector.

Lord Hutton’s report—or, to give it its full name, the interim report of the Independent Public Service Pensions Commission—found that keeping schemes unfunded has many advantages. It also dealt with some areas of funded public service pension schemes in this country, but recommended no change. The report stated that keeping schemes unfunded avoids potentially significant investment management costs and the risks involved in investing, whether in the UK or overseas. The report also noted that there are risks involved in the Government—in one guise or another—controlling up to £1 trillion or more of financial assets. It also stated that, even when the funds are placed in the hands of trustees, in an emergency the Government could still be compelled to underwrite the funds, which represents a further risk.

My hon. Friend spoke of the Ontario teachers pension plan as an example in support of his cause, but I feel honour bound to put a few points on record about its current performance, which is a cause of concern. The plan has experienced recurring funding shortfalls for the past 10 years. Indeed, as of 1 January, it is projecting a $9.6 billion shortfall, because the cost of future pensions continues to grow faster than the planned assets. That is connected to how the plan’s members are living longer and to interest rates.

Ireland’s national pension reserve fund also gives us cause to reflect on what can happen with such funds. My hon. Friend may have read the same Financial Times article as I did in November 2011 that reported on how that reserve is to be tapped for €12.5 billion of the bail-out costs with regard to Ireland’s public finances. There are risks connected to some of the schemes, so I do not necessarily agree with my hon. Friend’s interpretation that all is rosy in the land of funded schemes.

[Richard Fuller]

I do not think that anyone is saying that all is rosy in one scheme or another. Equally, I am sure that the Minister would agree that all is not rosy in the current system. One of the reasons why we have an off-balance sheet is that Governments do not like to talk about the obligations that they incur when they take on additional work. Does she accept that, if we transition to a fund, rather than the current scheme, and Governments add it to the public sector payroll, they would have to justify the full obligation of those pensions to the fund?

[Miss Smith]

My hon. Friend makes a valid point. Such a scheme could be designed in that way, to entrench the principles of responsibility that have been the key note of what he has outlined today, and for which I respect his argument.

To respond to the debate and to offer the Government’s view on funded pension schemes, we support the conclusions of the Hutton report, as my hon. Friend knows. I think that he will therefore understand why I acknowledge the report’s concerns about funded schemes. I think that he will also appreciate why I want to finish by talking about the problems that can result from moving to a different scheme structure. The transitional costs are difficult to contemplate. As is often the case—perhaps in those countries that have already tried this—a move to funded schemes involves significant financial costs.

Contributions in respect of current employees would have to be diverted to the new pension funds. Pensions in payment would therefore have to be financed through extra Government borrowing or taxation. To put a figure on that for the UK economy, it would cost more than £25 billion next year alone, with costs declining only very gradually over the 21st century. It would be problematic for the UK Government to contemplate that at this time, owing, as my hon. Friend has already said, to the actions of previous Governments and to current global trends.

My hon. Friend referred to the Government’s credit easing schemes, which were announced earlier this year. He is interested in how the funds connected to those schemes could be used in relation to a future scheme, but, although the national loan guarantee scheme will provide up to £20 billion of guarantees to banks, that is not a case of guaranteeing loans to individual businesses. The full credit risk of the loans remains with the banks, so no cash is set aside for the project that could be redirected, as my hon. Friend suggested, to setting up a pension fund. I will direct his interest—I am sure that he is already, as the phrase goes, “all over it”—to the memorandum of understanding with the National Association of Pension Funds and the Pension Protection Fund that was announced in last year’s autumn statement. That might be a way to gain direct investment from pension funds into UK infrastructure assets, which I am sure my hon. Friend is interested in.

To sum up, the Government will introduce legislation in the autumn to implement the final proposals that have been reached based on Lord Hutton’s recommendations, including maintaining the current funding agreements. The Government believe that those deals should not need to be revisited in the next 25 years. We have said so publicly and deliberately, and stand by that position. That should reassure pension scheme members that they are right to remain in their schemes, which will remain among the very best available. The Government’s commitment to continue to provide guaranteed, index-linked benefits in retirement should encourage young and old people alike to take up the pensions savings baton. The reforms should achieve the objectives of sustainability, fairness and responsibility within the public finances.