Oral Answers to Questions
Guto Bebb Excerpts(11 years, 10 months ago)
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The Prime Minister
I will pay all the taxes that are due in the proper way. The point I would make is that all the years in which the hon. Gentleman sat on this side of the House, there was a top rate of tax that was lower than the one we are putting in place. I did not hear any groaning from the hon. Gentleman then.
Guto Bebb (Aberconwy) (Con)
Q13. A typical council tax payer in my Aberconwy constituency will now pay £124 more than they did in 2010 because the money made available to the Labour Welsh Government has been used to fund their pet project to secure their majority in the Assembly. Does the Prime Minister share my concern that hard-working families in Wales are being used in order to fund the Labour party’s pork-barrel policy in Cardiff Bay?
The Prime Minister
My hon. Friend makes a very good point. This Government have made available money for a council tax freeze. That has the consequence that money for that freeze is available in Wales, so people in Wales will know who to blame if their council tax is not frozen. It is the Labour Assembly Government in Wales: they are to blame; they are the ones who are charging hard-working people more for their council tax.
Public Sector Pensions
Guto Bebb Excerpts(13 years ago)
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Hywel Williams
There is clearly a danger that some schemes will become unviable, which would mean that in the longer term those who no longer had pension schemes would become even more dependent on the state. I am sure that Government Members would not want that to happen.
Guto Bebb (Aberconwy) (Con)
I am sure I heard the hon. Gentleman say that the 3% increase in pension contributions would target those least able to pay. I believe that the average public sector wage in Wales is about £26,400, compared with £21,700 in the private sector. Furthermore, do not the Government’s proposals protect those earning less than £15,000 a year?
Hywel Williams
That argument fails to take several factors into account, such as the 710,000 people who will lose their jobs and the 1% pay freeze that looms before us at a time when inflation is eating into the real value of wages.
Our constituents have gone on strike with the greatest reluctance. They are not the wild-eyed extremists so beloved of those on the Government Benches. Members of the National Association of Head Teachers—scarcely a hotbed of left-wing insurrection—went on strike last week for the first time in 140 years. Anna Brychan, director of the NAHT in Wales, summarised the arguments advanced by many public service workers who felt that they had no choice but to go on strike. I shall paraphrase what she said, because it was very lengthy. She said that the NAHT was not persuaded by the unsustainable and unaffordable argument. The pension changes in 2007-08, according to the figures from the National Audit Office, showed savings of 14%, but no re-evaluation has been made since the previous apparently permanent settlement. May I draw the attention of the House to my early-day motion 2198, which makes that point?
Hywel Williams
I must press on, as I have rather a lot to say. Time is pressing, and it is a short debate. Of course, the hon. Gentleman can make his own speech, unless he has to leave the Chamber, but I give way.
Hywel Williams
So did the hon. Gentleman, before he jumped. I know him very well. He is a very nice man and is trying hard to be a nasty curmudgeon, but he is failing entirely.
Mr Donohoe
I am grateful to you, Madam Deputy Speaker, for that guidance. I am sure that that is what I was about to say. In about 70 years, my grandchildren will collect their first pension. I want it to be a decent pension, regardless of whether they are in the public sector or the private sector.
At the age of 22, I first became involved in pensions as a trustee of the pension scheme at the Ailsa shipyard where I worked. I have always had an interest in pensions as a result. Many people do not have a clue about pensions. I have always accepted that a pension is deferred income. My pension is part of my income, and pensions are the income of every person who contributes. It is income that this Government are taking from individuals. I know that and other hon. Members should know it.
Mr Donohoe
The hon. Gentleman obviously does not understand what I have just said. It is clear that most people do not understand that pension contributions by an employer are deferred income. They are part of a person’s income and should be treated as such regardless of whether they are in the private or public sector. That should be known to everybody.
The increase in contributions that was announced in the spending review will not be used to pay for pensions. My understanding is that that £2.8 billion is specifically to be used to reduce the deficit—that is in the Red Book. Perhaps the Minister would like to establish in his winding-up speech whether that is right. I also understand that the proposal was a political choice by the Government rather than being made out of necessity. They have scrapped Labour’s tax on bankers’ bonuses, which was to raise more than £3 billion in revenue, and replaced it with a tax on public sector workers’ incomes.
Those changes are being made against a backdrop of a two-year pay freeze for public sector workers, which of course was announced on the eve of last week’s strike. That was a very provocative statement intended, I suggest, to fan the flames of dissent among public sector workers. The changes also come at a time when inflation is running at about 5%. That in itself has reduced the value of public sector pay by almost 10% in real terms, which is not sustainable in the current climate. We all understand that we have difficult choices to make, and we all understand the state of the economy, but pensions should be considered for the long term. It is patent that that is not happening.
Guto Bebb (Aberconwy) (Con)
First, may I say that I might not be here for the wind-ups, because I have to catch a train to Brussels for Welsh Affairs Committee work? I hope that I will be able to be here, but if not, I present my apologies in advance.
This is an important debate, and I am grateful for the opportunity to contribute. One of the disappointments so far has been the fact that many Opposition Members have implied that coalition Members, whether they are Liberals or Conservatives, despise the public sector in some way. That is simply not the case, and I reject the suggestion completely. As a coalition Member, I find such comments offensive. I depend on state schools for the education of my children, I am the son of teachers and I am married to a public sector worker, so I find such comments completely unfair. Opposition Members should consider the matter carefully before making them.
We are aware of the importance of the public sector, so much so that we are proposing changes that Lord Hutton, the Labour peer who produced the report on the matter, said were possibly not affordable.
Susan Elan Jones
Can the hon. Gentleman confirm that he is not in fact the son of Conservatives?
Guto Bebb
That is an interesting question, and I am not sure. My father certainly ended up voting Conservative, but I cannot comment on my mother, because I think that how somebody votes at the ballot box is their choice entirely.
We are quite often accused of attacking the public sector or introducing unfair policies, yet the coalition Government are trying to deal on a long-term basis with issues that the previous Labour Government did not deal with. When we talk about fairness, which is important in this debate, I wonder where the comments of Labour Members were on the raid on private sector pensions. Where were their comments in defence of people with poor rates of pension provision who were saving with their own money—working people saving for their retirement? Where was the Labour party when it came to defending those people when the previous Labour Government raided pensions to the tune of £5 billion a year? That was a scandal. It was not fair, but we heard nothing from Labour Members.
Even worse, the raid on private pensions was made with the justification of helping young people back into work. In 2010, the rate of unemployment among young people was higher than in 1997. The raid was unjustified, not effective and unfair.
Sheila Gilmore
The hon. Gentleman’s 2010 figure is not wrong—[Interruption.] Excuse me! It is true to say, however, that the money that was put into reducing youth unemployment worked and that youth unemployment was brought down from the very high level that was inherited in 1997—[Interruption.] No. Only the recession caused youth unemployment to rise.
Guto Bebb
I find the argument that my point was “not wrong” but that somehow the raid was justified to be bizarre to say the least. However, I would challenge the hon. Lady: if she thinks the raid on private sector pensions was justified because the policy miraculously worked—even though youth unemployment went up—I invite her to say that we should reduce public sector contributions because that would help in relation to youth unemployment.
Mr Graham Stuart
The Select Committee on Children, Schools and Families held an inquiry into young people not in education, employment or training. It showed that before the economic crisis, the number of unemployed young people was on a level plane with the number when the previous Government took office. That shows that in all those years of economic growth, young people were left behind by the Labour Government before the spike after the financial crisis. What the hon. Member for Edinburgh East (Sheila Gilmore) said was absolutely false.
Guto Bebb
I thank my hon. Friend for the clarity of his point.
The proposal is a reasonable one. We are aiming to protect those on lower pay. Some in my constituency of Aberconwy will be astounded by the figure given by the hon. Member for Glasgow North East (Mr Bain)—he stated that only 16% of public sector workers earn less than £15,000. The average wage in my constituency is £23,000 and the average private sector wage in Wales is £21,000, so there will be a question about whether the proposal is unfair.
That reminds me of the comments made on the RPI to CPI change. The change was illustrated with the example of a nurse or dinner lady who earns £8,000 a year. I recently did a call-in programme on Radio Cymru. A headmaster from the constituency of the hon. Member for Arfon (Hywel Williams), as it happens, called in and stated that the change from RPI to CPI was extremely unfair because it would cost him £200,000. The average private sector pension pot is £30,000. Hon. Members can imagine that the response of the general public when they heard that comment was pretty strong. The changes that the Government are trying to make are changes for the long-term, to try to ensure that we have a system that works.
It is imperative that hon. Members mention some of the e-mails that they have received from the trade union movement. I received one this morning from the Public and Commercial Services Union stating that the claim that the coalition is trying to protect the lower paid is not sustainable. The PCS directs us to a comment by Cathy Newman, who says that it is “fanciful” for the coalition Government to try to claim that they are protecting the lower paid. I am disappointed with that comment, but then the PCS does not bother to remind us of other comments that Cathy Newman has made. She also says:
“Having said that though, public sector pensions, even after these reforms, will still be the envy of many a worker in private enterprise.”
That is the key point in Wales. We are looking at how we can ensure that the people who benefit from extremely good pensions contribute a fair amount towards them. For example, will increasing a teacher’s pension contribution from 6% to 9% have an impact on their take-home pay? Yes, it will—I would be the first to acknowledge that—but it is important to state that to end up with a pension similar to what will be available to a teacher as a result of the changes, somebody working in the private sector would have to contribute 35% or 38% of their take-home pay.
Guto Bebb
No, I will not take another intervention.
That disparity will still exist because the coalition Government value public sector workers. That is not to say that we do not value people who work in the private sector, but we acknowledge the importance of the public sector, we want to protect it and we want to bring in changes that are sustainable, fair to taxpayers and fair to the public sector. I ask any Opposition Member to tell me what is unfair about asking a teacher to contribute 9% of salary for a pension that a comparable worker in the private sector would have to contribute 35% to achieve. I ask any Opposition Member to stand up and tell me why that is fair. I see nothing.
Finally, I will turn to the Welsh context—
Guto Bebb
I want to get a few points in about Wales to finish.
In this debate, Plaid Cymru Members have said that they are standing up for their electorate and their workers. I applaud them for that. Of course people need to stand up for those who elect them to this place, but it is also important to point out that the constituency of the parliamentary leader of Plaid Cymru has the highest rate of self-employed people in the United Kingdom. What has Plaid said about supporting the pension provision of those individuals?
I accept that Wales has a high percentage of people working in the public sector, but in many constituencies the majority of people are striving to earn a living in the private sector. When we have a limited amount of money, the Government have a responsibility to all taxpayers to ensure that we have a system of pension provision that is fair to all. It is simply not sustainable to expect the three quarters of the people in Wales who work in the private sector or who are self-employed—many of whom live in the constituencies of Plaid Cymru Members—to pay through their taxes for the pensions of those who will retire on better pensions.
These changes will ensure that the public sector is protected, but they will share the burden in a slightly fairer way than at the moment, and I applaud the coalition for bringing forward a long-term change with courage and commitment.
Oral Answers to Questions
Guto Bebb Excerpts(13 years, 3 months ago)
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Mr David Amess (Southend West) (Con)
8. What recent discussions he has had with the Deputy Prime Minister on establishing a commission on the West Lothian question.
Guto Bebb (Aberconwy) (Con)
9. What recent discussions he has had with the Deputy Prime Minister on establishing a commission on the West Lothian question.
Michael Moore
The details of the commission’s remit and the time scale will be announced by the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper)—the Minister responsible for constitutional reform—at the appropriate moment, as he indicated last week. As for all the issues to be considered by the commission, I am sure that its members have heard the hon. Gentleman’s opening bid.
Michael Moore
The commission will not give specific consideration to the Barnett formula, or to funding arrangements around the United Kingdom. We have made a separate commitment within the coalition agreement to look at all those matters when we have achieved our primary objective of sorting out the public finances.
Oral Answers to Questions
Guto Bebb Excerpts(13 years, 7 months ago)
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Michael Moore
I am happy to acknowledge that under the previous Government, of whom the hon. Lady was a member, youth unemployment rose consistently through periods of growth as well as during the recession. I accept that we have a major challenge, which is why I will bring together different employment sector representatives in Irvine in a couple of weeks’ time.
It is important for all of us that we get the voluntary sector engaged. The future jobs fund was a very costly scheme, and its results do not bear out the hon. Lady’s assertions. It is not the case that it led to sustainable jobs—but the new Work programme will do exactly that.
Guto Bebb (Aberconwy) (Con)
2. What discussions he has had with the Secretary of State for Work and Pensions on the implementation in Scotland of the Government’s proposals for universal credit.
The Parliamentary Under-Secretary of State for Scotland (David Mundell)
The Secretary of State for Scotland and I are in regular contact with the Secretary of State for Work and Pensions on a range of issues concerning implementation of universal credit in Scotland.
Guto Bebb
In Scotland, the public sector accounts for about 50% of gross domestic product. If we are to succeed in making the country less dependent on the public sector, we need to ensure that the private sector has access to the personnel that it needs to grow. Does the Minister agree that universal credit will help to make work pay, and that it will contribute to the rebalancing of the economy of Scotland and the UK?
David Mundell
I do indeed agree with my hon. Friend, who will be pleased to note that already during the incapacity benefit reassessment trial taking place in Aberdeen, a large number of people who not only want to work, but also want the support to help them to work, have been identified and have found opportunities to work in the private sector.