Local Government Pension Scheme

Debate between Jack Dromey and Chris Stephens

Monday 24th October 2016 Westminster Hall

[Jack Dromey (Birmingham, Erdington) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Edward. Let me start by referring back to my earlier intervention. As national secretary of the Transport and General Workers Union, I was chair of the trade union side that conducted a series of negotiations on the local government pension scheme, and I worked very closely with the local government pension scheme at a national level on a range of the issues that have been referred to in this debate.

Who are the people we are talking about? They are the care workers who look after the vulnerable, the disabled and the elderly. They are the Karens, whom I met at Osborne nursery school but two weekends ago—outstanding education assistants who help kids get the best possible start in life. They are the dustmen, the refuse collectors and the people who go out and keep our streets clean—my uncle Mick, who lived with me until he sadly died, was a street cleaner. They are social workers who take care of, among others, looked-after children who badly need the support that social services and children’s services can deliver.

The millions who depend upon the local government pension scheme, which is fundamentally a good scheme, include not just those who are directly employed but those such as bus workers, who were originally directly employed by local government bus companies and have now been transferred but are still in the local government pension scheme. There are tens of thousands of contractors’ employees who enjoy what is called admitted body status. I know that because I negotiated admitted body status to ensure that, if those workers are transferred to the private sector, they remain in the local government pension scheme. The pension scheme is a good one. It is fundamentally one of the most democratic schemes in the country. I have often argued over the years that the voice of workers should be heard louder in relation to some of the local administrations of the pension scheme.

I have been personally involved not just in the negotiations. I have, for example, addressed two conferences for the scheme at national level on the issues of collaboration to ensure ethical investment, which is absolutely a legitimate concern, and infrastructure investment. The then national chair of the local government pension scheme, Kieran Quinn, said, “Why are we investing in light transport in Taiwan when we should be investing more in developing infrastructure here in Britain?” Of course, that is absolutely right.

The hon. Member for Ross, Skye and Lochaber (Ian Blackford) referred to housing. I remember opening a housing development with the leader of Manchester City Council, where local government pension scheme investment was key to building hundreds of affordable homes. The objectives of having an ethical approach and greater investment in infrastructure are absolutely legitimate—so, too, is the move towards pooling. We have got to get it right, but in my time we used to argue for pooling and greater collaboration to make more effective investments.

What is fundamentally wrong about the proposal is that the Government are elbowing to one side the world of local government and telling millions of pensioners how their pensions might best be delivered.

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

Surely, it is legitimate for a political party in a local authority administration to seek from the electorate a mandate on how it will invest in its pension funds. That is what the Government are interfering with.

[Jack Dromey]

The hon. Gentleman is, of course, right. He has a background in Unison—one of the major local government unions. It is simply wrong for Whitehall to tell millions of pensioners and town halls what they should do in the future. It is also potentially unlawful, and a very strong case was set out earlier to that effect.

We have shared objectives: a greater ethical approach, infrastructure investment and pooling. Why do the Government have to continue to blunder down this path? There was an extraordinary response to the consultative process, and people overwhelmingly said, “No, no!” The Government should now, even at this stage, listen and get back into discussions with the scheme itself and the local government unions.

How do the Government square their approach over the local government pension scheme with two stated public policy objectives? The first is localism. I remember leading for the Labour party in the endless negotiations when the Localism Bill was going through Parliament in 2011. Power to the people? This is more Leninism than localism.

The second objective is this. The Government have had a damascene conversion. Not since Saul fell off his horse on the road to Tarsus have a Government made such a change. Historically the enemy of working people, they are now posing as the friend of working people—the champion of working people—but what they intend to do is to say to millions of working people, “No matter what you think, no matter what your concerns are, we are going to tell you how your pension scheme should be invested in the future.” That simply cannot be right.

Budget Resolutions and Economic Situation

Debate between Jack Dromey and Chris Stephens

Thursday 9th July 2015 Commons Chamber

[Jack Dromey]

On this issue, we are as one. We are working together in the west midlands to construct the midlands powerhouse and realise the full potential of the midlands. What was surprising yesterday was that the Chancellor waxed lyrical about the remarkable Greater Manchester, mentioned the northern powerhouse in considerable detail and referred to just about every other part of Britain, and at the end of his remarks made a throwaway reference to the midlands powerhouse. That has not gone down well in the midlands.

Crucially, at the next stages what the Chancellor cannot do is empower but impoverish. One of the great problems with this Government is that everything they do is characterised by a fundamental unfairness of approach. Some £700 million has been cut from the budget of Birmingham City Council—£2,000 for every household—yet in the Chancellor’s own constituency there has been an increase in spending power of 2.6%. Likewise, the West Midlands police have been treated unfairly. If they were treated fairly, they would be entitled to £43 million more—enough for 500 police officers back on the beat.

We will never be one nation while the Chancellor and the Government continue to demonise and divide, with their talk of shirkers or strivers, work or benefits. I was born in poverty—my father a navvy, my mother training to be a nurse; they worked hard to get on. I have always believed that those who can work should work, but I object to wicked caricatures of the sort we heard yesterday in relation to the young homeless—“they come out of school, they go on benefits, then they want to get a flat”.

Three years ago, I hosted in the House of Commons the Homeless Young People’s Parliament in Parliament—quintessentially middle England, middle Scotland, middle Wales young people, the best of Britain, who had ended up homeless, overwhelmingly through no fault of their own. Last Friday, I was at Orchard Village, which serves young homeless people in my constituency. It is substantially dependent on housing benefit for its income and now faces closure.

If we are to be one nation, the Chancellor cannot continue to play politics with the United Kingdom, posing one nation against the other. EVEL—if ever there was an accurate acronym, that is it.

As for the Tories being the party of working people, they introduced in the Budget a tax on aspiration, saying to working families in social housing, “If you get on, you have to pay much more or move out.” The party of working people? On Sunday trading, I agree with what was just said. One of Labour’s greatest achievements, the weekend, is now threatened by this Conservative Government, who would compel seven-day working, in reality forcing millions of retail workers, particularly women, to work on Sunday and putting at risk thousands of small stores all over the country.

The party of working people, with the so-called living wage? Yesterday, when the Chancellor spoke about this, he grinned like a Cheshire cat and the Secretary of State for Work and Pensions punched the air, as if England had scored the winning goal in the World cup. The living wage? Twelve years ago, I was a founder member of the drive for the living wage, working through the former Transport and General Workers Union, with the East London Citizens Organisation and London Citizens, to organise, for example, thousands of cleaners in Canary Wharf and the City of London and the first-ever strike in the history of the House of Commons to win the living wage. This is not the living wage or a “new contract” with the British people, as the Chancellor called it this morning; this is a con trick by a cunning Chancellor, who gives with one hand and takes away with the other.

In the west midlands, 56% of families are on tax credits and 300,000 children depend on tax credits. Yet a family with two children and one full-time earner on £20,000-plus now faces losing £2,000: for every £1 they get from a higher living wage, they will lose £2 in tax credits. What is the Government’s answer? They say, “Ah, the £9”. That is £9 in 2020, but they are cutting tax credits in the here and now.

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

The hon. Gentleman is making an excellent speech. Does he agree that there has been a further attack on working people in that public sector workers have been told there will be a 1% pay rise every year?

[Jack Dromey]

The hon. Gentleman and I both come from a trade union background. I feel for public servants such as the firefighters, the police officers, the nurses. All those who do excellent work for the communities we serve, who have already been squeezed for five years, now face a 1% increase for the next four years. Effectively, that means a substantial cut in the living standards of millions of public servants.

The Chancellor says that the £7.20 rate will start next April, but the real living wage—I repeat, the real living wage—is already £7.85, or £9.15 in London; that is not based on cutting tax credits. As for the Chancellor being the workers’ friend, I did not come down with the last rainfall, and neither did the country. It is not a living wage if people cannot live on it. As the reality dawns and millions feel the pain of what the Chancellor has done, the last 24 hours of triumphalism on the part of the Conservative party will give way to the grim reality as Government Members go back to their constituencies and explain why they are inflicting cuts in living standards on the hundreds or potentially thousands of families they represent. The IFS’s verdict today is absolutely damning: for 13 million families, the living wage will not compensate for the tax credit cuts, and the poorest will be hit much harder.

When it comes to the Tories as the party of working people, let us not forget that this was certainly not a Budget for young working people. The crucial test of any Government is how they treat the next generation. Young people need the basics in life to get on—a decent job or education, and a roof over their heads. The Budget fails on all those points. It locks young people out of the living wage, makes higher education increasingly a luxury and cuts housing benefit for thousands who would otherwise end up homeless.

At this defining moment for our country, we must ask ourselves about what kind of country, economy and society we want. For me, it is an economy with a real living wage, not a phoney one. Crucially, as I have argued throughout my trade union life, it is the high-pay, high-quality, high-productivity culture of the kind that can be seen in the Jaguar factory in my constituency. We need a serious long-term economic plan if we are to promote such a high-pay, high-quality, high-productivity culture throughout our country, but the Budget failed lamentably on the fundamentals of productivity, skills, homes, rail and road. Ultimately, this country will never succeed and working people will certainly never succeed if we proceed on the basis of a low-waged, low-productivity economy.

What kind of country do we want? It has to be one in which our citizens are safe where they live and work, their children are protected and we are protected from terrorism. It is therefore fundamental folly for the Government, having cut 17,000 police officers, to continue down the path of cutting 17,000 more police officers. What kind of society do we want? Before the Budget, the OECD was right to warn against measures that would slow recovery and harm the poor, but that is exactly what will now happen.

Rick was a lifelong Tory and an ex-sergeant-major in the British Army, but he has joined my local Labour party. He told me, “I was a lifelong Tory, but I have joined the Labour party because I believe in both aspiration and support for the vulnerable.” He is in sharp contrast to a cunning Chancellor who gives hubris a bad name and is ambitious not so much for the country as for himself. After the last 24 hours—and the last century—now and in the future, the simple reality is that the party for the working people always was and always will be the Labour party.

Scotland Bill

Debate between Jack Dromey and Chris Stephens

Monday 6th July 2015 Commons Chamber

[Jack Dromey]

I used a not dissimilar argument when it came to the lobbying on where the aircraft carriers would be built. I argued that there should be fair treatment of Scotland, with Rosyth playing a key part in the construction and assembly of those aircraft carriers.

The lesson of history on those great battles was that unity of Scotland and England and unity of Scottish and English workers are key. On other fronts, I have to say that some of the proposals emanating from the SNP cause grave concern, such as those on the future of pay bargaining. We fought throughout the Conservative years against the regionalisation of public sector pay bargaining. We were able effectively to see that off. To go down the path of separate agreements for Scotland, then for England, then for Wales and then for the regions of England would once again divide workers when unity is strength.

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

I respect the hon. Gentleman’s trade union activity. On pay bargaining, though, I fear that he is somewhat confused, as local government pay in Scotland is separate from that in England and Wales. In Scotland, the two-tier workforce agreement is still in place, which the Conservative Government dumped when they were elected in 2010. There are already discrepancies.

--- Later in debate ---

[Jack Dromey]

In my trade union life, I frequently negotiated no compulsory redundancy agreements in a whole number of cities and throughout England, Wales and Scotland.

[Chris Stephens]

The hon. Gentleman seems to be very concerned about pay discrepancies. What is his view of the Scottish Trades Union Congress’s position? It said in evidence to the Scottish Parliament’s Devolution (Further Powers) Committee that issues such as the minimum wage fitted better in a devolved Scotland.

[Jack Dromey]

I shall come to exactly that point. New clause 63 in essence says, “Look before you leap.” I do not want unity and solidarity between England and Scotland and between English and Scottish workers to become history. I do not want the border between England and Scotland to become an exploitation zone with employers able to take advantage of different arrangements.