Living Standards

Frank Dobson Excerpts

Wednesday 30th November 2011 Commons Chamber

[Mr Duncan Smith]

I want to make a little progress, but then I will give way.

Whatever we say, in government or in opposition, I fancy that were the previous Chancellor in office he would be saying many of the things that my right hon. Friend the Chancellor said yesterday, because once in government people become strangely rational, and that leads to difficult choices. We can play party games, but I want to run through some of the choices we have had to make. We had to choose whether to invest more in supporting young people, and we chose to invest in the youth contract—about £1 billion over the next three years. That was an absolute priority for us, so we had to tighten two or three other areas to enable us to provide that support. These are tough choices. If we had a pot of money to raid, yes, we might have raided it, but there is none, as the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) reminded us on leaving office.

Unemployment is therefore a huge challenge for us—it is why we set up the Work programme. None the less, the OBR estimates that private sector employment will rise by 1.7 million by 2016, largely offsetting the forecast reduction in public sector employment.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Will the right hon. Gentleman give way?

[Mr Duncan Smith]

I will give way in a moment. I promised I would give way to the hon. Member for Sefton Central (Bill Esterson), too.

The growth plan proposes £6.3 billion of additional infrastructure, £1 billion for new regulated industries and moves, with the Association of British Insurers, to target a further £20 billion of extra investment.

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[Frank Dobson (Holborn and St Pancras) (Lab)]

I think that it will be generally accepted that people’s long-term living standards depend on decent pensions and that as a society generally we need to save more. Until now, having a pension has been seen as the safest way of saving—

[Andrew Griffiths (Burton) (Con)]

Will the right hon. Gentleman give way?

[Frank Dobson]

I certainly shall not.

Over the past few years people in the private sector have seen their bosses slash the pensions available and swindle them out of what they thought they signed up to when they joined their pension scheme. Now the Government are turning that idea on the public sector, with higher contributions, longer years of work and then lower pensions. One of the dangers is the lesson people will draw from what has happened in the private sector and is now proposed for the public sector. The Government talk about nudge, but the nudge will now encourage people not to bother to save because some swindler, either public or private, will take it off them and they will not get what they thought they signed up for.

On 11 August the Prime Minister repeated his praise for the emergency services, the police, firefighters, ambulance staff and A and E staff. Then he went back to Downing street and proceeded to press on further with trying to undermine the pension provision for all those people, making them work longer, pay more and then get less in their pension. He clearly considers them only when doing a bit of PR at the Dispatch Box. The same is true of the Government’s approach to teachers.

It is impossible to exaggerate the importance of teachers to this country’s future, especially head teachers, whose leadership is crucial in schools, because they do more for wealth creation than anyone in the City of London has ever done. They educate, train and produce adaptable young people who are the greatest asset to wealth creation in this country so that we can compete with the best on quality and not be dragged down to having to compete with the cheapest on price, because that is something we will never do.

The Government ought to wonder why head teachers are going on strike. Not only are they going on strike for the first time, but they have had a strike ballot for the first time. They are determined to improve their schools and believe that the pension proposals, if they go through, will damage their schools in the long term. Everyone accepts that changes are necessary. The teachers have accepted that changes are necessary, and they accepted agreements a year or two ago to make a bigger contribution.

The interesting question that the Government do not answer is why they have not produced the actuarial review of whether the teachers pension fund is in credit or deficit. They know that it is in credit, but they will not produce the answer because they know that it will expose the fact that they are trying to shift money from the teachers to the Treasury to pay for the incompetence of the Chancellor of the Exchequer, who has made as big a mess as was predicted when he took over as Chancellor. I have nothing more to say, Madam Deputy Speaker.

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[Frank Dobson]

The Minister and the Secretary of State refer to creating jobs in the private sector to compensate for the ones that have been lost in the public sector. Can he confirm that neither his Department nor any other is checking on how many of the so-called new jobs in the private sector are simply ones transferred from the public sector?

[Steve Webb]

I can understand why the right hon. Gentleman did not want to deal with the issue that I raised. I can point out to him, however, that the total number of people in employment will rise from 29 million last year to 30 million in 2016 under the projections. There will be more people in employment, and a rebalancing towards a vibrant private sector, which we want to see.

As well as mortgages, Members on the Government side have talked about the council tax. Labour Members did not seem to want to talk about the council tax, as though it did not matter. The council tax is one of the most regressive taxes that we have. This Government froze it and will freeze it again. That is real help for hard-working families.

A number of hon. Members talked about fuel prices and petrol. It is this Government who cancelled the 3p rise in January. It is Labour that had the escalator, year after year, with above-inflation increases in petrol prices. Under our plans for duty, petrol prices will be 10p a litre less than under Labour’s plans.