Financial Services Bill

Debate between Chris Leslie and Mark Durkan

Monday 10th December 2012 Commons Chamber

[Chris Leslie]

In Labour’s view, amendment 25 ought to allow that. If we are talking about ease of access to affordable financial services, it should be a responsibility of the FCA to think of new ways to map what is happening across the country and to ensure that there are not these deserts or vacuums of poor availability or no availability. That is why there should be a requirement for a map to be drawn up of where and what lending is available, perhaps on a postcode-by-postcode basis. It would provide transparency and enable hon. Members to find out what is happening in their constituencies. Anecdote is not adequate; we need a more rigorous system of regulation and monitoring. That is how it is often done in other developed countries, such as the US, as my hon. Friend said.

In the past, Ministers have said that they are opposed to that level of transparency. I am not sure about this Minister—I know he will want to take a fresh perspective—but previous Ministers said: “It’s too burdensome to require transparency in respect of lending patterns, and there might be anti-competitive issues as well.” It would be entirely feasible to collect anonymised data in the way suggested, however, and I hope that Lords amendment 25 could be so interpreted.

[Mark Durkan]

Like my hon. Friend, I welcome amendment 25, which, I note, was something he laboured on valiantly when we spent our Lent in Committee. Does he recognise, however, that in one part of the UK —Northern Ireland—the five high street banks he referred to are not part of the banking profile? In Northern Ireland, we are facing a twilight zone of banking, with changes happening almost by default squared—as a result of changes here and in Dublin—and that will change further in the context of banking union. That is why we need to question how the FCA would use the powers being given to it under amendment 25.

[Chris Leslie]

Exactly. I imagine that what my hon. Friend describes is absolutely correct. Incidentally, I pay tribute to him for his endeavours in trying to improve the legislation, month after month after month, as we proceeded through Committee and on Report. The situation in Northern Ireland will be compounded by different factors, so how much more useful would it be if he and his neighbouring parliamentary colleagues had access to data about lending availability in a more rigorous form? That is how we want to interpret amendment 25 and how we will press the FCA to interpret it.

Public Service Pensions Bill

Debate between Chris Leslie and Mark Durkan

Monday 29th October 2012 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

This has been a thorough debate, and I welcome the contributions made by Members from both sides of the Chamber.

We need reforms that enhance the sustainability of pension schemes. In an era of significant demographic change, it is right to reform the pension system to ensure affordability for both employees and employers—which in the case of the public sector is the taxpayer. The sustainability of a decent pension scheme was the focus of several tough decisions made by the previous Labour Administration. The changes made to public service provision when we were in office included raising the pension age from 60 to 65, introducing a “cap and share” approach that would protect Exchequer revenues and share costs between employees and employers, and reforming contribution levels, which rose by 0.4% for teachers and up to 2.5% for NHS staff. The Public Accounts Committee says that those changes would save the taxpayer £67 billion over a 50-year period, so considerable reform took place under the previous Administration.

However, the Government have mishandled subsequent reform. As we have heard from some of my hon. Friends, when the Government were formed in 2012 by the Conservatives with their good friends the Liberal Democrats, instead of building on the changes that we made, they decided to rip them up, thus causing major problems. Their incompetent and shambolic handling of the reform process has also made it much harder to build a consensus on some of the many sensible long-term reforms proposed in my noble Friend Lord Hutton’s report, as my hon. Friend the Member for Blaydon (Mr Anderson) said. We have to find better ways of rebuilding trust and achieving consensus on these vital matters.

The Government are compelling major changes without negotiation in a way that is both crude and unfair. In particular, by unilaterally imposing a steep 3% rise in contributions prior to any negotiations or even the completion of Lord Hutton’s review, and by making a permanent switch in the indexation of future pension income from RPI to CPI, the Government provoked strike action, at a cost to the country and the users of public services. They also provoked deep cynicism among public service workers. These changes were not recommended by Lord Hutton, but were unilaterally introduced, in an unfair and provocative way. The Government’s aggressive approach to this serious and sensitive issue resulted in months of stalemated negotiations. It is a matter of deep regret that the Government have lost the confidence and damaged the morale of hundreds of thousands of public service workers, whose engagement is vital at a time when they are being asked to accept ongoing pay restraint.

Many hon. Members have noted that Lord Hutton produced a thoughtful and comprehensive report on the way forward, using a number of the changes made by the previous Administration as a starting point for negotiations. The document was very useful. He was right to suggest that career average schemes could be fairer than final salary schemes—several hon. Members have made that point—and to say that we should be asking people to work for longer, given the increase in life expectancy. He was also right to stress the need to approach these issues in a careful, balanced way, and to avoid a race to the bottom on pension provision. It is those aspects of Lord Hutton’s report that I wish the Government had looked at more carefully and taken to heart. The Bill is only part of the story, as the unfair increases in contributions and the changes in indexation that have already been imposed do not appear in it.

The Bill contains a series of proposals that we need to consider on their merits. As it consists mainly of enabling legislation that is designed to put new schemes on a clear and equal footing, we will not oppose its Second Reading, but we will hope to address a number of serious concerns in Committee. My hon. Friend the Member for Hayes and Harlington (John McDonnell) has very strong opinions on these matters, which I respect, but I want us to try to find opportunities to improve the Bill in Committee.

All too often when Opposition amendments are tabled in Committee, we see brand new Ministers, with the advice of their officials, opening up their briefing books to find the word “resist” in block capitals, and then simply parroting the notes that have been put into their folders. However, I am sure that that will not be the case with the Economic Secretary to the Treasury, for whom I have great hopes. Let us pray that the Bill’s Committee stage will involve a genuine exchange of views, and give us the opportunity to look into the detail and dig into some of the Bill’s anomalies and, indeed, failures.

Several hon. Members referred to key aspects of the Bill that contain glaring deficiencies. For example, my hon. Friend the Member for Dumfries and Galloway (Mr Brown) and my right hon. Friend the Member for Wentworth and Dearne (John Healey) referred to the retrospectivity involved in the changes to scheme regulations. By allowing scheme regulations to make retrospective changes, the Bill gives the Government the power to reduce benefits that have already been accrued. Many hon. Members will be surprised by that, because most assume that such things are sacrosanct.

My right hon. Friend the Member for Wentworth and Dearne was right to point out that the proposal comes into conflict with the European convention on human rights. It also goes against the central tenet of pension provision, which is that what has been accrued cannot be reduced, because it has already been earned. That is an important principle, because how can public service workers have any security about their future retirement if they know that the Government can retrospectively reduce the benefits that they have already earned at any point? This should not be a partisan matter, but the contract between the employer and employee is important, so I urge the Minister to listen to the genuine concerns that have been raised in the debate.

[Mark Durkan]

Earlier, in response to an intervention that I made, the Chief Secretary to the Treasury tried to say that the retrospective provisions in clause 3 would be used only for technical and incidental purposes. Will my hon. Friend test the Government by tabling an amendment in Committee that would stitch that commitment into the Bill?

Infrastructure (Financial Assistance) Bill

Debate between Chris Leslie and Mark Durkan

Monday 15th October 2012 Commons Chamber

[Chris Leslie]

We definitely need more scrutiny of the resources committed through the European Union to some of the schemes abroad, but as I understand it, this Bill will not substitute for the investment that the UK taxpayer makes to the European Investment Bank and elsewhere. This is about underwriting private projects that will, hopefully, bring benefit to our economy more broadly. Our view is that we should focus our prime attention on the economic needs here within the UK.

[Mark Durkan (Foyle) (SDLP)]

Does my hon. Friend accept that some of us have a concern with the wording of his amendment, which specifically refers to “within the United Kingdom”? In Northern Ireland, for instance, many of the infrastructure projects are likely to have a cross-border character. Infrastructure projects both large and small sometimes have commitments of money from the Irish Government as they serve hinterlands that cross the borders. With renewable energy, of course it makes sense for significant projects to have a cross-border character. They will serve not only Northern Ireland’s but Great Britain’s future energy needs. Might not my hon. Friend’s amendment preclude sensible investment support for such projects?

[Chris Leslie]

I would not want the amendment to have that particular effect, and I do not think it need have it, especially if the Government were in a position to frame the legislation in such a way as to see this potential £50 billion focused very much on the needs of our own people in our own country. I hear what my hon. Friend says, but I do not think this is the be-all-and-end-all of Treasury expenditure, as there are other ways and means of dealing with those few projects that might have a cross-border character. When it comes to the underwriting capacity of this particular Bill, we think it important to prioritise investment here at home.

--- Later in debate ---

[Chris Leslie]

Exactly; my right hon. Friend is right. Official data show that construction output is down by 11.6% on the year before, and the Construction Products Association predicts a 13% fall in infrastructure investment this year. When one starts to look at what is actually happening in the real economy and the real world today, it is clearly not about the announcements that Ministers bring to the Chamber as though they represent reality. The Bill may well go on to the statute book after this debate, but if the Government are relying on it alone, we remain concerned that the infrastructure schemes for housing, schools, child care, transport and so forth which should be proceeding will not move forward as effectively as they should.

There are other concerns that the Minister has not addressed, perhaps because the Government do not have an implementation plan that they can allude to. For example, they have not talked about state aid clearance. The Bill says that financial assistance can be given to particular industries and private sector ventures in operations, in maintenance and in repairs, but perhaps to the exclusion of other companies. What is the Government’s approach to state aid clearance from the European Union? If they hit such a barrier in the EU, will they simply say, “Well, another month, another quarter, another year has gone by and we didn’t get state aid clearance”? How are they approaching those barriers, and when will they report to Parliament about how they are going to tackle these issues? Those are more obstacles that they do not appear to have addressed in any way.

[Mark Durkan]

Does my hon. Friend perceive that under the Bill there is a risk of the UK Government granting guarantees to companies in a way that would mean that those companies could gazump other projects that had been developed, perhaps in devolved areas, and come in on a pretty anti-competitive basis, not only constraining the choices of devolved Administrations but ruining the chances and prospects of companies that were working on projects and making good offers in those areas?

[Chris Leslie]

That is the sort of point that should have arisen if we had had the opportunity properly to scrutinise the Bill.

Most people observing the Government and the workings of Parliament from outside assume that there is a level of sophistication in the Treasury and that the people there must have a level of intellect and capability that is somehow superior to the rest of us. They do not realise that when one looks inside the Treasury it is clear that those people are crossing their fingers, holding their breath, and making it up as they go along. This back-of-a-fag-packet approach to legislation simply will not do. This country’s growth prospects have been worsened by this Administration’s policies. As the former US Treasury Secretary, Larry Summers, wrote in the Financial Times this morning, economies that become stuck in a vicious circle of austerity and stagnation will find it ever harder to deal with their deficits and stabilise public finances.

The Office for Budget Responsibility’s out-turn figures show that the Government are cutting capital expenditure by more than £6 billion more than the previous Government planned. Combined with other austerity measures, this has resulted in a collapse in infrastructure investment. More than 119,000 construction sector jobs have been lost so far, and according to the Construction Industry Training Board the Government are spending £8 billion more in benefits for the 188,000 unemployed construction workers.

Borrowing is not falling, but rising this year—it is up 22% in the first five months of this financial year compared with last year. This Government are borrowing not to pay for investment and positive development, but to pay for the failures of their economic plan and to cover the costs of considerable increases in welfare in particular.

We need an alternative that focuses on action today and that understands that we need to introduce—really introduce—some of the capital schemes, roll up our sleeves and get on with them. The 4G mobile spectrum auction will take place soon and we hope that it will yield at least £3 billion. Let us put that money towards 100,000 new homes and put some serious investment into infrastructure. Let us build on some of the successes that we know Britain can deliver on infrastructure.

There is a complete mismatch between the Government’s words and their actions: our infrastructure is deteriorating, not improving; construction work is down, not up; and hundreds of thousands of young people are languishing on benefits while businesses delay the investment needed to maintain their competitiveness and market share. That is just not good enough and much more is needed than the vagaries of this Bill.