Valedictory Debate

John Baron Excerpts

Friday 24th May 2024 Commons Chamber

[Mr John Baron (Basildon and Billericay) (Con)]

Thank you, Madam Deputy Speaker, for allowing me to catch your eye for what will be the last time in my 23 years in this place. Like all Members who have spoken in this wonderful debate, it is going to be a great wrench to leave the House. The only person who may have a slight skip in his step is Mr Speaker, who will no longer have to consider the many applications for urgent questions that I have submitted over the years. It has been a wonderful time and, as briefly as I can, I want to thank all those who have made it possible.

As all other hon. Members have done, I want to thank everybody who works here. Little do they realise, but they are supporting a great parliamentary system. I want to thank the Doorkeepers, the caterers, the security staff and the Librarians—I want to thank everybody who works here, without exception. They keep the show on the road. Every single one of them supports our great parliamentary system. We thank them for that.

Reflecting for a moment, I suggest that much has changed since I joined the House in 2001 and almost all for the better. For a start, the hours are much more family-friendly. As a green MP in 2001, there was no briefing. My hon. Friend the Member for East Worthing and Shoreham (Tim Loughton) basically made the point that we were thrown into the Chamber—I would not say literally—and told to get on with it and learn. Things have also changed for the better in that we have many more lady MPs, which has been a great improvement to the House.

Things have changed for the better, but what has not changed for the better has been a narrative that has grown stronger in recent times and in certain quarters that our parliamentary system is broken and not performing as it should. I would contend that that is not true. While I accept that it is not perfect, I do believe that it is representative and effective, and is respected around the world. For example, it managed to contain the Brexit debate—probably the most passionate debate that we have had in a generation—and channel it accordingly in an open way that I think few other countries could have pulled off.

This Chamber remains the crucible where the matters of the day are debated and resolved. Its fulcrum is the obligation that we all tell the truth in this place. We should never forget that MPs can still effect great change. I, like other colleagues, look back with fondness and satisfaction at the campaigns and good causes that I have participated in, whether campaigning for our 2015 manifesto to contain the promise of an EU referendum, against arming the Syrian rebels, for official recognition and support of our nuclear test veterans, greater funding for the British Council, or securing a focus on outcomes when it comes to cancer, as was embodied in section 5 of the Health and Care Act 2022. I thank all colleagues—many of them are in their places—who supported that effort.

Of course one has not always been successful; none of us is. We can all list our somewhat disappointments. I opposed our Iraq, Libya and Afghanistan interventions and, despite the passionate debates that we had on those occasions, we still intervened. It was another sadness to me that we did not manage to do more at the time to get the Government to think again about defence cuts.

My amendment in 2019 on the Northern Ireland backstop was defeated by the largest recorded parliamentary majority in history: 600 to 24. It is still fresh in the mind. I remind colleagues that one just has to keep going on. Perseverance has a quality all of its own and my goodness me, there were times in those years when we needed it.

I have heard so many interesting speeches in the Chamber this afternoon, and it has been a real pleasure to be part of this debate, but I would suggest to colleagues that humility is also a great quality. We should never forget that. I was reminded of that recently by my constituency team, who put it to me that, in all the elections I have fought since 2001, the less time I spent in the constituency, the more my majority went up. Indeed, that is true: I have had an increased majority in every single general election. I will not say that I am not a very diligent constituency MP, but perhaps—perhaps—I have eased off just a little bit since 2001.

Overall, I would say that, with hard work and perseverance and by garnering support when needed, MPs can still effect change and truly help their constituents, occasionally with the help of the occupant of the Chair—as you well know, Mr Speaker. It is nice to see you in your place; and now that you are here, may I thank you personally for everything you do for this place? You are the guardian of something very precious in that Chair, and your presence there has been a real source of strength and support for Members across the House in making sure that our parliamentary system remains true to itself and does not meander. Thank you very much indeed, Mr Speaker.

I have enjoyed my time on Select Committees and all-party groups, which is where we see the best of cross-party work. That is something we all value in this place. I concur with the many observations made by colleagues that we are at our very best if we can foster consensus across the divide and move an issue forward. Like many others, I have certainly benefited from cross-party consensus, when we have been able to engineer it.

I come back to the effectiveness of this place and the minority of individuals, increasingly noisy though they are, who say that this place is broken or not effective, or that it needs to be improved because it does not represent its constituents. That view is completely wrong, and I say that as somebody who has been in this place for 23 years—and there are colleagues who have been here much longer than I. This place is effective, and we should remember that. I would therefore caution against ill thought-through, sweeping reforms, which will harm our democracy. Past innovations, such as the Fixed-term Parliaments Act 2011, have served to highlight the wisdom of convention, I would suggest. We should be wary of talk of, for example, a written constitution, proportional representation or House of Lords reform. We should be careful what we wish for. We are here courtesy of the accumulated wisdom of previous generations. We discard that experience and wisdom at our peril if we do not consider things very carefully.

I wish all colleagues well, past and present, and I wish those staying on good fortune in the next Parliament. I will certainly be keeping in touch with many friends. My right hon. Friend the Member for New Forest East (Sir Julian Lewis), a very good friend, has been sitting next to me for most of this debate, although he has had to go, and there are many other colleagues here who I look forward to keeping in touch with after I leave.

Naturally, I would like to thank my constituency association, along with councillors, activists and the many friends I have made in the constituency, for their contributions and friendship over so many years. The association stood by me on a number of occasions when I did not always agree with my party. The closest I came to being removed as an MP was in 2003. It was not an election year, but there was an extraordinary general meeting to—I was going to say “to deselect me”, which I think is what it was in effect, because of the way I voted on the Iraq war.

Opinion was very divided, as colleagues may remember—I see my hon. Friend the Member for South Norfolk (Mr Bacon), a good friend, sitting on the Bench at the front, who will remember that moment. Having voted against my Whip, I had to resign from the Front Bench. That caused a stir in the association, but we got through it, and since then I have had no issue at all with my association over not always agreeing—or not agreeing, I should say—with our interventions in Libya or Afghanistan, post 2001. The association understood that MPs are representatives, not delegates.

I would like to thank my constituents for their support, and for ensuring that I won increased majorities over the years. I am going to stay connected to my wonderful constituency of Basildon and Billericay, which it has been a great honour to serve, by participating in the annual fun walk—it is now a charity—that I founded in 2002. Since then, it has raised around £1.5 million for good causes across the constituency and beyond. I may be stepping down as the MP, but I will certainly stay connected to the local area by staying involved with that charity event as chair of the trustees.

I would like to thank my staff, to whom I owe so much. My constituency team—Jo Turner and Annie Akinin—have been with me since I became an MP. My London team—Claire Lumby, Selina Short and Benjamin Yates, who is sitting in the Gallery—have been with me for up to 16 years. They have 80 years of service between them, which is a rarity in this place, and my constituents have benefited as a result. I am very grateful to them, and I am proud of them for everything we have achieved together.

Finally, I would like to thank my wife Thalia, my daughters and my wider family—whether they are still with us or not—for their support over the years. It has always added perspective and balance to my endeavours in this place, which I shall miss. It has been a great honour to serve, but the time has come to move on, and I wish you all well.

I have one remaining message for my party: please stay wedded to the centre ground when fighting general elections. I am an old-fashioned, one nation Tory, and compassionate conservatism is the way forward. I do not want us to wander off to the right—I do not think we are going to—because we must stay centred. Delivering economic efficiency, strong finances, robust economies and all the rest of it is not an end in itself; it is a means to help the less fortunate in society, and we have to remain wedded to that idea. The Prime Minister understands this, and I wish him well at the next general election.

Draft Occupational Pension Schemes (Funding and Investment Strategy and Amendment) Regulations 2024

John Baron Excerpts

Wednesday 13th March 2024 General Committees

[Paul Maynard]

My right hon. Friend makes the very fair point, which I have always been conscious of in this brief, that small schemes may occasionally get out-shouted by some of the larger schemes. Alongside the Pensions Regulator, we have engaged extensively not just with industry but with the professional bodies that are often more involved in the running of smaller schemes. I am confident we have struck the right balance between providing the clarity and assistance that trustees of smaller schemes need, and the interests of members in ensuring that they get the benefits that are due to them. It has been quite a long process to come up with this particular set of schemes and, in my view, we have struck the right balance.

As many will know, DB schemes have around £1.4 trillion of assets under management. In a world where most DB schemes are closed and maturing, it is more important than ever that sponsors and trustees work together, are clear how their promises will be met, and agree how to manage the funding and investment decisions involved. These regulations will support them to do that.

DB funding levels have indeed improved in recent years. It is important that schemes take advantage of the opportunities that that brings, and crystal-clear funding standards enable that. This package of measures aligns with the Government’s policy on investing in productive finance and the consultation on options for defined-benefit schemes.

[Mr John Baron (Basildon and Billericay) (Con)]

As somebody who has run pension fund money, I have a few concerns. One is the administrative concern raised by my right hon. Friend the Member for East Yorkshire, but this could also smack of the approach, “I’m from central office—nothing to be concerned about”—[Interruption.]

[The Chair]

Order.

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[The Chair]

The Minister was making a speech, but Mr John Baron was intervening. If it is convenient for him to continue his intervention, that would be appropriate.

[Mr Baron]

Thank you, Dame Maria. I fully understand where the Government are coming from on these measures, but what assurance can the Minister give that the Pensions Regulator, if and when it intervenes, is suitably sighted of investment risk, so that it understands the pension scheme and its funding liabilities, and whether or not it has low funding capability, so that it will be a help rather than a hindrance?

[Paul Maynard]

I am grateful for that intervention. The Pensions Regulator is expert in regulating, but more than that, it recruits investment consultants, experts in covenants, and experts in risk management. It reaches out to the wider community—to not just those who run pension schemes, but those who manage the process from beginning to end. Having met with the regulator on many occasions, I am confident that it has the necessary skillset to implement its own funding guidance and ensure that it is adhered to by scheme trustees.

As I was saying as my hon. Friend intervened, DB funding levels have improved in recent years. It is important that schemes take advantage of the opportunities that brings, and crystal-clear funding standards enable that. This package of measures aligns with the Government’s policy on investing in productive finance, and the consultation on options for DB schemes. We want to encourage schemes to get the most from their assets through more productive investments, while at the same time ensuring that scheme members can be confident that they will receive the benefits that they have been promised. We know that most DB schemes are well-managed and properly funded, and that the vast majority of members will receive the promised pension.

Good practice is not universal. Some schemes still take inappropriate levels of risk. There remain around 27% of schemes, on a technical-provisions basis, that have a deficit that will need to be repaired. The regulations embrace good practice and build on the existing funding regime for DB schemes by providing clearer funding standards, which will ensure, as far as possible, that schemes are properly funded over the long term.

The regulations set out the details for the scheme funding provisions in the Pension Schemes Act 2021, the details for the funding and investment strategy, and how important metrics, such as maturity, covenant strength and low dependency, must be determined. Schemes will be required to have a funding and investment strategy that sets out the way pension benefits will be paid over the long term. That could be through buying out with an insurer, entering a super-fund, or running on with employer support.

As they were originally drafted, the regulations would have meant that one component of the reforms—recovery plans—would come into effect from April and not September. Having identified that, and to avoid potential confusion and additional administrative requirements for the small number of schemes affected, we withdrew the regulations and re-laid this revised version.

I am pleased by the positive response to the regulations from our stakeholders, and I am confident that the regulations will support schemes and sponsoring employers to make long-term plans so that their members get the retirement income that they have contributed towards and rightly expect.

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[Mr Baron]

I will keep my comments very brief, for the benefit of the Committee. I seek clarification. It is not just the admin cost of these measures that concerns some of us. I am pleased that the Minister responded about the investment expertise that he believes the Pension Regulator will ensure is present whenever it intervenes, but there is a clause in the explanatory memorandum that concerns me slightly. Paragraph 7.1 states:

“Rather than eliminate risk from the system, the changes aim to support trustees in planning for the long-term and managing risk effectively—balancing the protection of member benefits with the sustainability of the employer.”

That makes sense, except that the sustainability of the employer can fluctuate depending on the economic cycle and individual circumstances. If we take that at face value, we could have a situation where the company’s fortunes are fluctuating and therefore to maintain the balance, as mentioned in the explanatory memorandum, the investment strategy has to fluctuate as well. That is not the best basis on which to take forward a long-term investment strategy. Will the Minister put my mind at rest that that will not be a problem for companies or, more importantly, those who hope to benefit from the pension over time?

[Paul Maynard]

I thank the shadow Minister—the hon. Member for Sheffield, Brightside and Hillsborough—and my hon. Friend the Member for Basildon and Billericay for their contributions.

I will do my best to reassure my hon. Friend. I fear he has greater expertise than me in this matter, so I may not succeed, but I am sure he will let me know. To his specific point, the funding risks taken by schemes need to be supportable by the employer. They are required to address any deficit that emerges if risks materialise. When we say “employer covenant”, we are really referring to the strength of that covenant—the financial ability to plug a gap should it occur.

The key objective of the reforms is to provide clearer and more enforceable funding standards. The regulations will define the strength of the employer covenant and set out the principles for how that is to be assessed. They will then set out a further principle for how to determine scheme liabilities. The level of risk that can be taken depends on the strength of the employer covenant and the maturity of the scheme. The regulations will require schemes, as a minimum, to have sufficient funds to have a low dependency on their sponsoring employer by the time they are significantly mature to meet the scheme’s future pension promises. That means that, under reasonably foreseeable circumstances, further employer contributions will not be expected.

[Mr Baron]

This will be my last intervention. I take on board what the Minister has said, but he still has not directly answered the bit of my question about the fluctuating fortunes of a company. I appreciate that pension schemes going forward will be funded on a low-dependency funding basis and should be fully funded from the registered date. But what assurance can he give that, if the fortunes of the company fluctuate markedly, and if the trustees are going to meet the obligations according to the explanatory memorandum, they will not find themselves in a situation where they have to continually adjust the investment risk profile of the portfolio they are overseeing to ensure that they maintain that balance during what could be difficult economic times?

[Paul Maynard]

I am sure my hon. Friend will be aware that we have seen volatility in pension schemes over recent years. Many DB schemes are now funded to surplus, to a much greater extent than has hitherto been the case, but I recognise that that will not always be in the case. Let me try to go down one level further in terms of what the regulations will prescribe in the hope of reassuring him. If I do not reassure him, I will happily invite him to the Department for a thorough going-over with officials, but let me do my best first.

The regulations are subject to the principle that the funding and investment risks taken by a scheme before the relevant date must be supportable by the employer. The relevant date is the date on which the scheme is expected to reach significant maturity. Less mature schemes, such as open schemes, can support more risk because there is more time to adjust any funding shortfalls that may emerge if the risks are realised.

The regulations amend the Occupational Pension Schemes (Scheme Funding) Regulations 2005. They require trustees and managers to follow the principle that when determining recovery plans, the period for the recovery must be set with reference to what the employer can reasonably afford. The regulations will also make it clear that when determining an appropriate recovery plan, the trustees and managers must take into account any impact on the sustainable growth of the employer.

What I draw from that, and what I hope my hon. Friend will draw from it, is that should a DB scheme find itself facing a deficit that was not anticipated, both the trustees and the managers of the scheme will have the flexibility to determine the appropriate recovery plan, and that any variation within a short period of time can be accommodated by the fund. Over a longer period, the reference date that they start their planning from should enable longer-term volatility—the ups and downs that we naturally see across time—to be smoothed out. If that does not answer my hon. Friend’s question, he can grab me at the end and he will get a speedy invite.

On the point the shadow Minister made on some of the issues around guidance more generally, we have tried to ensure that the regulations are flexible and will work well for all schemes. It is important to make the point that even mature schemes can invest in a wide range of assets as long as they reach low dependency at significant maturity. We also want the regulations to allow open schemes to take account of new entrants and future accrual when determining when the scheme will reach significant maturity. To make long-term planning and implementation easier and to avoid unnecessary administrative burden, we have given the Pensions Regulator the flexibility to ask for less detailed information depending on the circumstances of a particular scheme.

We can expect the revised DB funding code of practice to be laid before Parliament this summer, in time to come into effect from September 2024 in line with the regulations. Around the same time as the Pensions Regulator publishes its code, the regulator will also publish the fast-track parameters and the updated impact assessments. Later in the summer, the Pensions Regulator will consult on the covenant guidance. There is a whole suite of things coming up over the course of the summer, all intended to be in force ready for 22 September, when the regulations will become effective.

We are making sure, in collaboration with the regulator and the industry, that any burden is proportionate to the outcomes and reflects the particular circumstances of any individual scheme. Fundamentally, as the shadow Minister agreed, the regulations will guarantee that member benefits are protected, but that we enable defined-benefit schemes to grow as best they can to meet any funding shortfall that may occur. On that basis, I hope that I have answered everyone’s questions, and I commend the regulations to the Committee.

Question put and agreed to.

Romanians and Bulgarians (Benefits)

John Baron Excerpts

Tuesday 5th March 2013 Commons Chamber

[Mr Duncan Smith]

That is exactly what I am trying to deal with, but not just for Romanians. This goes across the board for what anybody in the European economic area can do when they come here. The problem has been in existence for some time, as the right hon. Member for Birkenhead said. I now have to sweep up after the lord mayor’s show and deal with what has been left behind, after the last Government did nothing at all about the problem. I will do it; I am absolutely determined to.

[Mr John Baron (Basildon and Billericay) (Con)]

This is clearly not a problem of the Secretary of State’s making. Given that the average salary in this country is five to six times what it is in Romania and Bulgaria, will he do what he can to ensure cross-departmental co-operation, so that we do not face the situation we had in 2004, when Departments were simply out of the loop?

[Mr Duncan Smith]

Absolutely. In fact, we have already had a number of meetings with the Prime Minister and coalition colleagues about tightening up between Departments and understanding where one Department’s position knocks on to another. The first thing is to get rid of the silo mentality that existed and create a pan-Government position. The next thing is not to talk tough here and soft abroad, but to work with the Foreign Office to be as tough over there as we are back here. That is the process that is now being engaged.

Ford UK (Duty of Care to Visteon Pensioners)

John Baron Excerpts

Tuesday 4th December 2012 Westminster Hall

[Mike Freer]

My hon. Friend makes another good point. We have seen over the years that when companies are seeking to renege on their pension responsibilities, they seek to delay through the courts. I suspect that many companies hope that the pensioners will die before the case is heard, and I agree that it is time that Ford met its responsibilities.

I return to the issue of Visteon being set up to fail. The Visteon UK pension plan was created 12 months after the spin-off from Ford, with a transfer value of just £230 million. That transfer value left an immediate deficit of £49 million. That deficit was not communicated to the employees. It looks as though Ford was simply shunting off its liabilities and cleaning up its main balance sheet. It could be argued that a viable spin-off company could have traded its way out, and that it could have made employee and employer contributions to rectify the deficit. Could Visteon have traded its pension fund out of trouble? Possibly—I am not an actuary, so I cannot comment.

[Mr John Baron (Basildon and Billericay) (Con)]

I congratulate my hon. Friend on securing the debate. Ford certainly needs to answer key questions, and this will be the subject of a court case. However, we have invited other players in this sad affair, such as the Visteon management and the trustees at the time—key players when it came to the transfer—to come and meet us as a group, and they have refused. Does my hon. Friend agree that that should be considered as a negative on their part?

[Mike Freer]

My hon. Friend makes a good point. I do not see why the former management and trustees should not come and talk to us and explain why they believed that the actions they took were correct. If they feel those actions were right, they should come and defend them. I also correct him, because although I thank him for his congratulations on securing the debate, the true congratulations should go to our hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe), who has been diligent and persistent in pursuing this case on behalf of Visteon pensioners. We should give credit where credit is due in this House.

To return to whether Visteon could be a going concern and therefore trade its way out of pension deficit, in the month before Visteon was spun off, documents submitted to the Securities and Exchange Commission identified significant risks, but those risks were not communicated to the employees. Ford said that it was committed to ensuring Visteon’s viability by using Visteon to supply its products. Fair enough, but Ford then implemented a unilateral price reduction and started sourcing products from newer and cheaper alternative providers.

The European works agreement, apparently, was supposed to have transferred all the benefits, but it also tied Visteon into the UK wages and benefits that the employees were entitled to. Although we can argue that the benefits of the pension scheme have not been transferred, Visteon was, of course, saddled with the legacy labour and overhead costs, and, as I have mentioned, Ford then unilaterally dropped the prices it was willing to pay. The cost base of the spin-off remained high, but Visteon’s income was cut at a stroke by Ford.

Disability Benefits and Social Care

John Baron Excerpts

Wednesday 20th June 2012 Commons Chamber

[Mr Byrne]

I welcome the hon. Gentleman’s intervention, and I will talk about Remploy at length later in my speech. I hope that he will intervene on me again at that stage.

[Mr John Baron (Basildon and Billericay) (Con)]

Welfare reform is long overdue. Will the shadow Minister explain why, when his party was in government, it did not get to grips with this matter? On disability living allowance payments, for example, there was a complete lack of transparency regarding where the money was heading. The previous Labour Government had plenty of opportunity to reform welfare, but they failed to do so. Will he explain why?

[Mr Byrne]

The Labour Government introduced some of the biggest reforms of the welfare system that we have ever seen in this country. That is why Lord Freud, in his review of the changes that we had made, said that the progress that had been made was “remarkable”. The hon. Gentleman would do well to study his remarks.

I want to return to the point about who is to pay the bill for this Government’s failure. Every Chancellor, every Cabinet and every Government have to make a decision on how the load is to be carried. The point at the heart of this debate is that this Government have decided that much of the load must be carried by Britain’s disabled people. New research from the House of Commons Library, which I am publishing today, shows that over the course of this Parliament, disabled people in our country will pay more than Britain’s bankers. Indeed, in the final year of the Parliament, disabled people will be paying 40% more than the banks. That tells us everything we need to know about this Government’s values.

The House should be grateful to Carers UK, and to the eight carers week charities, for the service they have done us by setting out the combined impact of these decisions. Their conclusion is blunt:

“It is a scandal that the UK’s carers are being let down in this way.”

The situation that confronts us is not going to get better; it is going to get worse. Scope reminds us that universal credit—if it is ever introduced—will hit disabled people 30% harder than non-disabled households, and that the halving of support for disabled children will cut £1,300 from their families. The Government’s arbitrary 20% cut to disability living allowance risks plunging 500,000 families into a financial black hole.

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[Maria Miller]

The right hon. Gentleman should perhaps keep quiet while listening to what the Government are doing.

The former Chief Secretary did not solve the problems. He and the then Labour Government ducked the important decisions when they were in power—[Interruption.] And now, as I think hon. Members can hear, he is ranting in opposition. Meanwhile, we are working hard to try to implement the new personal independence payment, which is on track for 2013, meaning that support for disabled people will be fairer. At the same time, we are doing much more to support disabled people into work, enabling them to have the same opportunities in life as anybody else: from the Work programme, in which where we are paying providers by results, to Work Choice, through which we are providing intensive back-to-work support for those facing the greatest barriers to employment, and the Access to Work scheme, through which we are investing more to help disabled people and employers with the extra costs of moving into work. None of that was done by the right hon. Member for Birmingham, Hodge Hill in his 13 years in government.

[Mr Baron]

My hon. Friend makes a strong case for reform. The all-party group on eye health and visual impairment had a very constructive meeting with the Minister about the need to ensure that those who have very serious impairment of sight do not lose access to the enhanced rate mobility element of the PIP at the same rate as wheelchair users. Will she continue to give consideration to the fact that we do not want to return to the pre-2009 anomaly?

[Maria Miller]

My hon. Friend makes a strong point and I thank him for inviting me to the all-party group to hear some of the concerns expressed to him and to other MPs. Many of my hon. Friends and many other hon. Members who are present in the debate will want to ensure that the new PIP works hard for people who are visually impaired or have a sight loss. They will also be very aware of the fact that the disability living allowance required primary legislation to be changed; it took some two years to change it, because of its inflexibility and inability to take account of the real challenges people with sight impairment have to endure in getting out and about. I can give my hon. Friend a firm assurance that my objective is to consider each individual and the challenges they face, not simply the condition they have. Many people with sight loss or sight impairment face significant mobility problems and my hon. Friend’s points are not lost on me.