Economic Crime: Planned Government Bill

Chris Evans Excerpts

Wednesday 26th January 2022 Commons Chamber

[Paul Scully]

The hon. Lady is right about tackling fraudsters. That is why our determination to introduce legislation in this area is undiminished. At the other end of the scale but still adding up to a lot of money, universal credit, as well as being more responsive to claimants, was itself an anti-fraud measure. One of Lord Agnew’s great qualities was his attention to detail—to the small acts that had big implications but were often missed. We will bring that learning to bear across government.

[Chris Evans (Islwyn) (Lab/Co-op)]

The Department uses the National Investigation Service for frauds worth more than £100,000. The National Audit Office has reported that the service received 2,100 intelligence reports last year, but only 50 were investigated. The NAO has identified that as a lack of capacity, so rather than waiting for the Queen’s Speech, why does the Minister not speak to the Chancellor and ask for some extra funding for the service to pursue those frauds?

[Paul Scully]

We have invested in a number of schemes, including an investment in the National Investigation Service to boost its capacity to investigate cases of serious fraud, especially within the bounce back loan scheme. It received £5 million in the 2020 spending review and made recoveries worth £3.1 million in 2021-22, exceeding its targets. It has investigations into bounce back loan frauds and other areas, and we will continue to work with it.

Shotton Steelworks: 125th Anniversary

Chris Evans Excerpts

Wednesday 1st December 2021 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op)]

Really?

[Mark Tami]

Really.

After John Summers’ death in 1876, the business began to expand under the leadership of his son Harry, who joined forces with three of his brothers, grew the business and opened the Hawarden iron works on the banks of the River Dee in 1896. With a 250-strong workforce and the installation of eight steam-driven rolling mills, galvanising pots, annealing furnaces and corrugating equipment, that was the beginning of the Shotton Steel plant that we know today.

Workers travelled from all over the country, such was the production demand, and by 1902 Harry Summers had turned the plant’s attention to steel production, with the site in Shotton being recognised as a leading steel manufacturer by 1909. John Summers and Sons was now the largest manufacturer of galvanised steel in the country, with a site covering 60 acres and employing 3,000 workers.

One of only two strikes in the works’ history caused major disruption to production between 1909 and 1910. The dispute concerned the contract system, whereby at each mill one person—the contractor—employed ten others on a piecework system. It was common for workers to be paid according to favouritism, rather than the hours they actually worked or their productivity.

Supporting Small Business

Chris Evans Excerpts

Tuesday 19th October 2021 Commons Chamber

[Lee Rowley]

We have seen the Government make many changes over the past decade that have improved business conditions in this country and allowed businesses to continue to progress, and we will continue to do that. I know that ministerial colleagues will come forward with proposals in due course.

On the motion before us and the shadow Chancellor’s speech, it would be churlish not to recognise the extraordinary amount of support that the Government have already provided to business. Even as someone who prefers to focus on outputs and achievements in our country, I accept that the past 18 months were necessarily about inputs and keeping businesses going until they could properly trade again. To do that, we offered hundreds of billions of pounds of support from the taxpayer to provide one of the world’s most generous and comprehensive economic responses to the pandemic.

We enabled 1.3 million employers across the UK to furlough up to 11.5 million jobs. There were 1.6 million Government-backed loans, representing more than £79 billion of support. We paid out almost £14 billion in support to around 5 million self-employed people. We cut VAT for the hospitality and tourism sector. We waived billions of pounds of business rates for long periods at the height of the pandemic. And we brought in a range of regulatory easements to help businesses.

[Chris Evans (Islwyn) (Lab/Co-op)]

I ask for the Minister’s advice. One of the most frustrating things about business rates is when a business asks for some flexibility and it is difficult to speak to the right person. A number of businesses in my constituency want some flexibility on their business rates. They go to the council, but the council only collects the tax. They go to the valuation office, which only does the valuation. There is no system to appeal against business rates at the moment. Will the Minister address that in his speech?

[Lee Rowley]

I understand the hon. Gentleman’s concerns, and I acknowledge the challenge. There is always a balance to be struck. This level of detail is perhaps slightly away from the motion, but I would be happy to discuss it separately.

We should not forget all the support that we have provided over such a sustained period, and we should not strip this debate of that context. Now our task is to make sure that businesses, large and small, have the opportunity, the talent and the ability to unleash their full potential, which is where I am afraid I will have to diverge again from the Opposition and their remarks today.

The extraordinary circumstances of the pandemic required an extraordinary response from the Government, and we delivered that extraordinary response, but it did not come without cost. Whether we like it or not, providing such a comprehensive and decisive economic response has dramatically increased public borrowing. Government debt has exceeded the size of the UK economy for the first time in more than 50 years. It was an appropriate and proportionate strategy, when we were faced with a real and immediate crisis, to support businesses and allow them to ready themselves for when the recovery came, but over the medium term it is clearly not sustainable to continue borrowing at these levels.

--- Later in debate ---

[Naz Shah (Bradford West) (Lab)]

I thank the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), for ensuring that we are having this debate on our Opposition day, as it is important to my constituents and certainly to the businesses in my constituency.

Supporting local businesses means supporting the workers, families and people in our communities. Local businesses are not just the backbone of our economy; they are also often the depictions and representations of many towns and cities across the country. In Bradford, we are incredibly fortunate to have a rich profusion of local businesses, especially in the hospitality industry, which not only caters for the locals in Bradford, but brings in so many others from afar. However, during the pandemic businesses have struggled, and those in Bradford West struggled extensively due to a longer period of local lockdowns. Their compassion, even in the toughest of times, did not wither away, and I witnessed that at first hand. While businesses were closing their doors, they were also opening their hearts by supporting those who were most in need, especially our NHS. I want to put on record my gratitude to them during those times.

But gratitude is not enough. Those businesses need the Government to support them during times of uncertainty. Although we are grateful for the support that has been forthcoming, it does not cut far enough for the businesses that are struggling now. The pandemic and the gradual effects of Brexit are signs of the pressures that local businesses are facing every day. We have heard about the queues of lorries that we expected at Dover following Brexit, but what this Government’s poor planning did not assess was the lorries without drivers that would have an impact on food and fuel shortages. This afternoon, I spoke to Regal Foods, a medium-sized business in my constituency, which really was affected by the situation.

Although a long-term strategy is needed to support local businesses to help to rebuild our economy, we can help sooner by freezing business rates. Labour plans to freeze business rates until the next revaluation. That will benefit sectors such as retail and hospitality that are hit the most by this tax. Hospitality businesses that are struggling to find workers and have only recently had to endure the increase in VAT to 12.5%, while barely being able to remain afloat, need such support. Labour also plans to cut business rates and increase the threshold for small business rates relief from the current threshold of £15,000 to £25,000.

[Chris Evans]

During the last financial crash, the Labour Government actually cut VAT to reinvigorate the high street, by ensuring that people went there and that money started to flow through the shops again. We hear from this Government yet again about raising value-added tax, as the Conservatives have always done whenever they have been in power. Does my hon. Friend believe that a VAT cut, rather than an increase, would help the high streets?

[Naz Shah]

I absolutely agree. The Government have gone back on their manifesto pledge not to raise taxes. Giving small businesses a discount on their business rates for 2022-23 would be a much-needed lifeline.

As I said at the start of my speech, supporting local businesses is about not just business, but the entire community. There are lots of wedding halls in my constituency. During the pandemic, I recall inviting the Prime Minister up to visit some of them. A wedding hall in my constituency is not just about the wedding hall itself and the people running it. It creates other jobs: the waiters, the florist, the photographer, the caterer—the list goes on. The pandemic really has had an impact on the local economies of these places. The Madisson, the Rio Grande and the Mirage in my constituency—those are the big ones, but there are lots of small ones too—have really borne the brunt of what happened during the pandemic. Those wedding halls are huge. Anybody who has been to an Asian wedding will know that we do weddings really well, with a large amount of people in attendance. Despite being able to put social distancing measures in place, the venues were not allowed to open and they really suffered.

In the same way, cutting business rates for SMEs will not only support the local economy, but counteract deprivation, poverty and regional inequality. I have the fastest growing rate of child poverty in the whole of Yorkshire and Humber. These measures go a long way in helping people to keep the bread on the table and keep their household going. We already know how much the universal tax credit cut will impact on my constituency.

A report from WPI Strategy in 2020 found that constituencies like mine are ranked third highest in the need for levelling up, as a direct result of a regional inequality impacting on business rates. The report found that it was even justified to refer to this regional inequality as a “northern shop tax”, as hard-working businesses in these areas, from SMEs to multinationals, were more likely to struggle with setting up shop because of business rates. More worryingly, analysis by Labour using the latest Office for National Statistics business impact survey reveals that 332,000 businesses are at risk of closure in the next three months, accounting for 828,000 jobs. In my constituency of Bradford West, 232 businesses are at risk, which will have a devastating impact on so many families who are already struggling.

--- Later in debate ---

[Chris Evans (Islwyn) (Lab/Co-op)]

Having listened to the speeches from the Labour Benches, I have put Bradford, Liverpool and Hull at the top of the places that I would like to visit. I would caution Conservative Members about some of the things they have said about the constituencies that they represent. When they talk down their constituencies they are not giving a very good advertisement to visit these places. They may be beautiful and there may be fantastic people living there, but it is no good if the Member of Parliament is standing there talking about the night-time economy, antisocial behaviour and what a bad visit it would be to go to the high street.



To me, the high street is the lifeblood of the British community. I have childhood memories of my mother dragging me around the shops to get shoes from the local shoe shop when we had to go back to school. I remember, when I was older and got into music, buying my first vinyl from the local record shop. As I got older and wanted to go out, I went out and got the latest fashions from the menswear shop. I remember that high street thriving, full of people and bustling. When I went back there a couple of years ago—I took my wife there once—I could not believe the transformation of that small high street that I remember so well. The banks had closed down and the cashpoints were concreted up, as people did not use them anymore. It was full of derelict shops.

I was interested to hear from my hon. Friend the Member for Pontypridd and Taff-Ely (Alex Davies-Jones). I remember venturing sometimes down to her constituency to go shopping. I remember the Woolworths being there, and I remember the Marks and Spencer at the top end of Taff Street as well. They have gone. I worry about those high streets, because I believe that the health of a constituency and a community can be judged by the high street.

In the constituency I represent, there are three major high streets: Risca, Newbridge and Blackwood. If anyone wants to visit Blackwood, it has a number of unique boutique shops. It has the Maxime cinema. If anyone wants to see the new James Bond film, “No Time to Die”, they will not find a cheaper ticket in town than at the Maxime cinema in the middle of Blackwood. We are not without our problems, however, and they come down simply to business rates. We have all heard from Members on both sides of the House that there must be some sort of reform. I have been in the House for 11 years. From the moment I came into this House, there have been campaigns on both sides of the House to save our high street. The former Chancellor George Osborne talked about tax simplification, yet here we are 11 years later, and still we face the problem of business rates, and they are still not being reformed.

I was interested in those contributions from the Government Benches that said that the Labour party in opposition must come up with an innovative solution to sort the business rates problem. I say to those Members: they are in government, so they have to come up with the solutions. I see some Government Members nodding to say that they have come up with solutions, and I will come to the points they raised. The simple fact is that we all know business rates need to be reformed.

I want to talk about a company in my constituency: Tidal’s Store, a fantastic family-run business that sells high-class, high-quality furniture. If any Member of the House wants to deck out their flats in London, or their houses—or, dare I say, for some Conservative Members, their mansions—they could not do better than going online and buying from Tidal’s Store. It is a fantastic shop in the middle of Blackwood. However, I went there three years ago, and the problem it had was business rates. At the top end of the town, it pays £330 a square foot for business rates. Go further down the town and businesses pay £300. At the bottom of the town, businesses pay £275 a square foot. They are all on the same high street. It does not make sense to me. To top it all off, there is a business park just below the high street where businesses pay just £50 a square foot. Those businesses taking advantage of those business rates are not the small, family-run, innovative companies, such as Tidal’s Store; they are the huge companies that can afford the business rates in town. It seems extremely unfair.

I touched on this issue with the Minister earlier. I went to the council. In fairness, I will give credit where credit is due to Caerphilly County Borough Council, its chief executive Christina Harry and their leader Philippa Marsden. They know this is a real problem for their high street and have been very supportive, but there is nothing they can do. All they do is collect the tax, yet if there is a complaint, it is Caerphilly Council that is taking the blame. I then went to the valuation office. It said to me, “Oh, we just set the rates, Mr Evans. We do not do anything about appeals. We cannot change the rate. The rate is set in stone.” Then I thought, “I will write to the Minister.” The Minister at the time, as a matter of coincidence, was the now Chancellor of the Exchequer. He wrote to me saying that there was nothing he could do. Is anything more frustrating than seeing a family-grown business, which I want to thrive, crippled by business rates that sometimes cost more than its rent? There is nothing I can do and no one we can go to. That is the frustration with business rates at the moment.

It is all very well for the valuation office to say that rates are set in stone, but in times of economic crisis or in a pandemic, we need flexibility. I say to the Minister, please, set up a system whereby businesses can appeal. They are crying out for help. We have already heard that there will be a review, but reviews take time. Many of these businesses are struggling and need help right now.

The other shopping centre in my constituency, Newbridge, is home to Newbridge rugby football club and world champion boxer Joe Calzaghe. Anybody who wants to visit an example of an art deco theatre would do well to come to Newbridge Memo and see for themselves how a working men’s institute has been taken over and become a thriving, beating heart of the community. But Newbridge faces the same problem: many shops are boarded up, which looks terrible when people walk down the street. Next Saturday, the Co-operative store in Newbridge will close its doors for the last time, which is very sad. We have campaigned to keep it in place. The next nearest Co-ops are in Oakdale, which is two miles away, and then further down in Machen in the constituency of my hon. Friend the Member for Caerphilly (Wayne David). People will not be able to shop for their groceries locally in Newbridge.

I was pleased when a local businessman contacted me and said, “I want to take over the business.” He owns a number of businesses so it would be an excellent move, but the one thing that was holding him back was, yet again, the business rates. As many hon. Friends have said, business rates in Wales are frozen currently, and I hope, for my English counterparts, that the Government take on board that example. There will come a time, however, when business rates will be unfrozen and will have to be paid. What future do people have when they know that time bomb is ticking?

The Government need to look again at business rates. People need help now. Right hon. and hon. Members on the Government Benches have talked about increasing VAT. There was a very good speech earlier about increasing it by 3p in the pound, but that is wrong for two reasons. First, VAT is an inherently regressive tax, because people are taxed on what they spend, which means that the poorest people in society pay it. Secondly, the packet of measures that was put in place in 2008 after the financial crash by the then Chancellor, Alistair Darling, included a reduction in VAT to ensure that people got out there and started spending in shops so that money flowed through the economy. Increasing value added tax is asking the poorest people in society to bear the burden.

When I was a child, as I said at the start of my speech, going to the high street was an event. We need to make it easier for people to go there. I ask the Government to put in place measures for local councils to offer free parking and, when shops are boarded up, short-term lets and business rate holidays to ensure that there are thriving businesses in the high street. There is much to be done. The high street—that feature of British society—is on the critical list. We have to do something now.

Budget Resolutions and Economic Situation

Chris Evans Excerpts

Tuesday 9th March 2021 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op) [V]]

During the run-up to any Budget, there is much chatter about the rate at which Government set taxes—too high and we run the risk of choking off growth; too low and the national debt will rise to unmanageable levels. What is very rarely asked, however, is how taxpayers’ money is spent. A taxpayer has a right, when they hand over a proportion of their hard-earned wages, for that money to be spent in a wise and prudent manner by the Government. However, the facts and evidence, as presented by the independent National Audit Office, show that this is simply not the case.

From April 2017 until the end of 2020, central Government Departments have recorded at least £5 billion in accounting losses. This is an incredibly high figure of wastage. For example, HMRC racked up over £470 million in departmental losses from 2017 to 2020. It gets worse: according to HMRC’s own planning assumption, total fraud and error arising from the coronavirus job retention scheme cost anything in the region of £2 billion to £3.9 billion. So far, only £10 million has been recovered and any more is unlikely to be claimed back.

To put that into perspective, Saffron Cordery, the NHS Providers deputy chief executive, said that building a new, average, mid-sized hospital costs around £500 million. This means that the £5 billion in accounting losses over three years could have built 10 new hospitals. Given the strain that we have seen on NHS resources this year, I am sure that an extra 10 hospitals would have been appreciated by many communities across the country.

The new Grange University Hospital has just been built near my constituency by a Welsh Labour Government. The hospital has a specialist critical care centre, a top-range cardiac suite and 30 individual intensive therapy unit rooms. It was even able to open four months early to relieve pressure on the NHS during the pandemic. All of that cost £350 million.

Let me tell the House what else was over £300 million: the total losses for the Department for Work and Pensions departmental group. That was in one year alone. I cannot speak for other Members in this House, but I certainly know what I would rather have taxpayers’ money spent on and it is certainly not fraud and error. All that money should be spent helping the people of the UK to recover from the effects of the pandemic and not wasted on departmental error. We owe that to the British people. It is their money. Let us spend it wisely.

Oral Answers to Questions

Chris Evans Excerpts

Tuesday 3rd March 2020 Commons Chamber

[Paul Scully]

I thank my hon. Friend for that question. Last week, I co-chaired the Rose review board, which is overseeing the progress made in delivering on the initiatives from that review. The Treasury has launched the investing in women code, which to date has 22 signatories from across the financial services industry. I look forward to working with my colleagues in government and business to drive forward this important agenda.

[Chris Evans (Islwyn) (Lab/Co-op)]

Tidal’s Store in my constituency is paying a high amount of business rates—proportionately more than the local retail park down the road—which it says is putting it at a disadvantage. Will the Minister have a word with his Treasury colleagues about reforming business rates for small businesses such as Tidal’s?

[Paul Scully]

I thank the hon. Gentleman for that question. I know that that is something that exercises high streets up and down the country. The Treasury is looking at this and reviewing business rates as a whole.

Oral Answers to Questions

Chris Evans Excerpts

Tuesday 21st January 2020 Commons Chamber

[Kwasi Kwarteng]

As my hon. Friend knows, the Government are absolutely behind such initiatives. We have a well-developed forest nursery sector, and we encourage the planting of UK-grown trees, as proven by our £640 million Nature4Climate fund. That builds on our support for preserving areas of great natural beauty, such as the Malvern hills in my hon. Friend’s constituency, and we hope to plant an additional 75,000 acres of trees a year by the end of the next Parliament.

[Chris Evans (Islwyn) (Lab/Co-op)]

Small things make a big difference when it comes to climate change. Waunfawr primary school in my constituency has an eco-community, and it decided to switch from plastic bottles to glass bottles to provide its milk. It had lots of problems finding a dairy that would provide glass bottles, but eventually it did. How will the Department ensure that fewer single-use plastics are used by businesses, and by those in local government and the public sector?

[Kwasi Kwarteng]

I do not know the detail of what is happening in the hon. Gentleman’s constituency, but I would like to hear more about it. We have made strong efforts in this area, and we must trumpet the fact that we are world leaders in combating climate change. As he knows, we will be hosting COP26, and I would be happy to take him offline, as it were, and pursue this conversation further.

Oral Answers to Questions

Chris Evans Excerpts

Tuesday 11th June 2019 Commons Chamber

[Kelly Tolhurst]

I thank my hon. Friend, who has long been a campaigner for post offices in his region. It is true that west Cornwall communities have been unduly inconvenienced, and he is right that the Post Office is now waiting for Cornwall Council to issue a formal permit to formalise the agreement. I have been assured that, due to the closure of Porthleven post office this morning, there will be a weekly mobile service in place very shortly. I just want to highlight that, with such a diverse network in many different locations and settings, it is true that some post offices will close due to unforeseen circumstances and lots of other reasons. It is important that the Post Office keeps up with that challenge to make sure our communities are well served.

[Chris Evans (Islwyn) (Lab/Co-op)]

With banks closing their rural branches, post offices are the last places where people can access cash. However, as I know from the experience of Pontllanfraith in my constituency, it is increasingly difficult to replace postmasters who give up their tenancy. What can the Government do to work with the Post Office to encourage more people to take up postmaster and postmistress jobs?

[Kelly Tolhurst]

I thank the hon. Gentleman for raising that matter. A key part of what the Post Office has done is to renegotiate the banking framework, which has seen remuneration for postmasters increase significantly—it has doubled, and trebled in some cases. On Thursday, I will be hosting a meeting with Post Office Ltd and the National Federation of SubPostmasters, where we are hoping to tackle some of the issues about the economic viability of sub-post offices.

Fuel Poverty

Chris Evans Excerpts

Tuesday 11th December 2018 Commons Chamber

[Chris Evans (Islwyn) (Lab/Co-op)]

It is damning for all of us in this House that the Benches are empty as we debate one of the greatest scandals of our time, fuel poverty.

I first spoke about fuel poverty in January 2011. It was my very first speech in Westminster Hall. That day, I chided the Government for 25,995 winter deaths. Within eight years, that has nearly doubled to 50,100. I know that Ministers like to blame the previous Labour Government, but there is nothing they can say about that—it is on their watch. They are the ones responsible for excess winter deaths and they have a duty to do something about it.

The second time I spoke about fuel poverty was in relation to terminal illnesses. In my constituency, like in many former industrial heartlands, we see large numbers of people with chest and respiratory diseases—chronic obstructive pulmonary disease and so on—which mean that they have to turn up their thermostat because they feel the cold more than anybody else. Further to that, I was shocked to discover that many people who have been diagnosed with cancer or other terminal illnesses, such as motor neurone disease, find themselves in abject poverty. Not only can they not afford to pay their food bills, they are struggling to pay their energy bills.

In that second debate, I specifically asked the Government to consider giving people with terminal illnesses an entitlement to a winter fuel payment during the time they are ill, or even, in the case of motor neurone disease, to the end of their life. The Minister at the time said he would look into that. Unfortunately, here we are seven years later and cancer patients and those with terminal illnesses are still suffering. For them and their families I call on the Government today to make it a priority to give people with terminal illnesses some comfort in their final harsh days.

Mineworkers’ Pension Scheme

Chris Evans Excerpts

Tuesday 5th December 2017 Westminster Hall

[Nick Smith]

My hon. Friend makes a really good point that gets to the nub of the question we are considering.

I called for the debate following the productive meeting that Labour colleagues and I had with the scheme trustees recently. At the meeting, we looked at ways of improving outcomes for the scheme’s members, and I am grateful to my hon. Friend the Member for Ashfield (Gloria De Piero) for organising it.

On the scheme itself, in 1994, there was an agreement between British Coal pension trustees and the Government. The Government made a guarantee that any pensions earned up until privatisation were safe and would not fall in cash terms. In return, if the schemes were in surplus and doing well, that surplus would be split 50:50, with half going to scheme members and the other half to the Government. The sharing of the surplus is at the heart of our discussion.

Since 1994, the Government have taken £3.5 billion out of the scheme, without making any payments into it. It could be argued that £830 million of that was British Coal’s original share of the surplus being paid back to the Government—I sort of get that and it is a fair point.

[Chris Evans (Islwyn) (Lab/Co-op)]

I am glad that my hon. Friend mentions British Coal. He will know that British Coal made no employer contributions between 1987 and 1995, when a Conservative Government were in power. Does he agree that that was an error by that Government that clearly proves that, in their time in government, they did not care about ex-mineworkers?

[Nick Smith]

My hon. Friend and neighbour really captures what has happened.

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[Richard Harrington]

I think the implication of the hon. Gentleman’s question is that he knows the answer, which I do not, and that it is zero, but I should like to write to him formally, because I do not want to inadvertently mislead anyone. I do not have the information to hand, but if he will bear with me until later today, I shall make sure he gets a letter or email straight away. It is a reasonable question, but, if I may put words into his mouth—although one never should—I think he really means to say that the Government have never been called on to put money in. I think that is a reasonable assumption; the scheme is unlike others, in that respect. However, Governments get a reward, as anyone would, for risk, and just because things are working one way, that does not mean that they always have or always will. I think that most people would accept that. By the way, I heard nothing unreasonable in the speeches that hon. Members made during the debate. There is realism here; it is a question of judgment about what to do with the surplus.

Some hon. Members have argued that the Government are taking money from scheme members. I think the word “robbery” was used, which is a bit inflamed, but I know what it means—that it is something improper. Others say that the pensions would be higher if the Government did not take their share of the surplus. Both those views might be true, but they do not present the full picture, because pensions are paid according to the scheme rules, so that the sums due to scheme members would not change. They could potentially benefit from bigger bonuses if they had a greater share of surpluses, but in that environment the trustees’ investment strategy would be more risk-averse, and returns could be less than they currently are. In any event, would it be fair to ask taxpayers to take all the risk with none of the benefits?

The scheme has been a success, and at least the money is there.

[Chris Evans]

I just have a simple question: what is the cost to the guarantor, compared with the cost of the surplus? How much do the Government need in the pension fund to provide a guarantee on the pensions? Do we know the figure?

[Richard Harrington]

The cost to the guarantor is a contingent cost. It could, in theory, be all the money—the billions in the pension fund. That is the only answer I can give, because, of course, that is what a guarantee is. If one guarantees a loan to a bank, to use the analogy I gave before, it is the whole thing. If the person who has borrowed the money pays back 25% of it, the guarantor pays 75% of it. The principle is exactly the same. However, the scheme in question has been a success, and I would argue, and I think the trustees would agree, that it is the guarantee that made that possible. All the other pension funds—I dealt with quite a few in my previous job—buy very low-risk Government bonds, all the time. They do it because of fear; obviously, they have got to pay money out. With their fiduciary duty they cannot risk it. That is one of the reasons that British pension funds do not invest in infrastructure and similar things as much as we would like. They cannot risk the pensioners’ money, because of the need for returns. A guarantee on all pension funds would transform the whole pensions industry, but of course the Government would then have a contingent liability of I do not know how many billions.