Public Service Pensions: Government Contributions

Chris Stephens Excerpts

Wednesday 19th December 2018 Westminster Hall

[Chris Stephens (Glasgow South West) (SNP)]

Does the hon. Gentleman not share my concern about the lack of consultation with the devolved Administrations? He might have seen correspondence about that, because the lack of consultation is actually against the UK Government’s statement of funding policy.

[Gerald Jones]

I very much agree with the point made by the hon. Gentleman. We are talking about significant amounts of money, and maximum consultation should be required, at the very least. As I have said throughout my contribution, such figures are too unsustainable to be transferred to local budgets anyway.

As I said, our public services cannot survive on thanks and appreciation. Investment is required to sustain the services that we already have. The Government need to come to the table and outline what support they will offer to address the problem. Our public services—our emergency services—have suffered enough.

--- Later in debate ---

[Chris Stephens (Glasgow South West) (SNP)]

I will keep my speech short since, as is well known, for the last week I have been struggling to make speeches because of my sore throat. You will be pleased to know, Sir Christopher, that the House of Commons nurse recommended whisky—I will take advantage of that this evening.

I congratulate the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) on securing this important debate. This issue will have an impact across public services, particularly public sector employers. I consider pensions to be deferred pay, so we should always look carefully at any changes to be made to public service pensions. A lower discount rate would, in the absence of other charges, result in higher contribution rates that public services across the board are expected to absorb.

As hon. Members have said, the employers currently in unfunded public sector pension schemes are the NHS, state schools, and the police and fire services. Any change in the discount rate would have an impact on those contributions. The UK Government announced they would fund most Departments’ additional costs incurred by the September 2018 changes for the 2019-20 year. Beyond that, Government’s position appears to be that meeting costs would form part of the spending review discussions.

The letter I referred to in my intervention on the hon. Member for Merthyr Tydfil and Rhymney was from the then Welsh Government Finance Minister—now First Minister—in a joint letter with Derek Mackay, the Scottish Cabinet Secretary for Finance. It lays out the concerns to the Chief Secretary to the Treasury. As I understand, she indicates that it is her intention to meet 100% of all costs related to the valuation of the health pensions scheme in England only. That leaves the devolved Administrations having to meet that cost, at the expense of public services. As I said, that is at variance with the UK’s Government’s statement of funding policy, which states that any measures with an impact on devolved responsibilities should have prior engagement and consultation. The fact that there was no prior engagement and consultation is of great concern to Members in the devolved nations, as it certainly should be.

It is quite clear that the public sector across the board has been hung out to dry, with little time to prepare to meet the additional costs of the revised discount rate. Hon. Members explained rather well the impact that would have on their services locally and the potential money that will have to be found to fund public services. The potential cost to public sector jobs was a point very well made by the hon. Gentleman and the hon. Member for City of Durham (Dr Blackman-Woods). I agree with her that a Treasury Minister really should have responded in this debate. With all due respect to the Minister—I do not know whether he got the short straw in a raffle—the Treasury should be here because it was a Treasury decision. That we have someone from the Home Office—with all due respect to the Minister, who I like—is somewhat baffling. Members have to hold Government Ministers to account, but we always like to have a debate with the correct Minister answering questions.

I would like public sector pension arrangements to be fully devolved to the Scottish Parliament. I am sure that colleagues in Wales, having seen this disaster, will probably share that view. There is real concern across the public sector that is shared across the board by Opposition members. I look forward to the Government’s response.