Finance Bill

Debate between John McDonnell and Richard Fuller

Tuesday 1st July 2014 Commons Chamber

[John McDonnell]

I will be fairly brief.

Under the last Government, I moved amendments like the new clause on virtually every Finance Bill. It has always made me anxious when Governments resist the requirement to provide information. That is all that is sought in the new clause. It simply looks to ensure that the House is properly informed about the impact of a differential tax rate. For the life of me, I could not understand why such amendments were resisted by the last Government, and I cannot understand why the new clause is being resisted now.

[Richard Fuller (Bedford) (Con)]

On the point about being informed, does the hon. Gentleman think it unwise that the Leader of the Opposition has already stated that he will increase the rate to 50p?

[John McDonnell]

I want openness and transparency. I would prefer people to put their cards on the table in the run-up to the general election, so that the electorate know where everyone stands. It would be invaluable for all parties in the House to have the information that is requested in the new clause, so that they could test it and see whether the hypothesis that has been put forward by the right hon. Member for Wokingham (Mr Redwood) and others is accurate. I do not believe that it is.

This debate goes much wider than the 50p rate of income tax. Members need to wake up to that. A few months ago, the Mayor of London ordered water cannon in case there are more demonstrations and riots. There is a deep feeling of unease and a building anger in our community about inequality. People do not usually mobilise and go out on the streets in the depths of a recession. Let us look at what has happened elsewhere: people get angry, mobilise and go out on the streets when they feel that the country is coming out of recession, but they are not sharing in the benefits from the sacrifices that have been made. We have asked people in this country to make immense sacrifices.

We should look at the various reports that have come out. A few months ago the Oxfam report exposed the fact that for the first time more of the people who are in poverty are in work than out of work. More children are therefore growing up in poverty in working families than in non-working families. I think that that is a first in the history of this country. A survey by Save the Children showed that, as a result of poverty, a staggering number of parents are going without food so that their children can eat. It showed the number of children who have never had a winter coat because their parents are unable to afford one. All that is building up into a significant anger about the inequality in our society.

Taxation rates are therefore not just about the income that they raise; they are about tackling inequality. The right hon. Member for Wokingham said that this has been happening over a long period. We now live in a society that is more unequal than it has been since Victorian times. It is true that for a short period in this recession, the Gini coefficient went down for two years. However, according to HMRC figures, it started rising again in 2012-13. I think that that will provoke anger in our community. Politicians need to be aware of that anger. Unless we do something about it, it will be difficult to contain.

That is why Governments need to be seen to be addressing the appalling inequality in our society. One way of doing that is to redistribute wealth, as Governments ought to do. The new clause does not talk about the vast maldistribution of wealth in our society. One publication from the Treasury revealed:

“The top 10% of earners in Britain have salaries which are equal to more than the bottom 40% of earners”.

That is absolutely staggering, and that is just about earnings: in some FTSE 100 companies, the chief executive and the directors earn 166 times the average wage of the workers.

Taxation is about addressing inequality. The new clause simply looks at one element of taxation and asks for an accurate report on whether it helps in the redistribution of wealth and in tackling inequality.

[Richard Fuller]

The hon. Gentleman has expressed his concerns about rising inequality. Why does he think the Opposition have been so timid in proposing remedies? Are they afraid of something? Are they worried what the media might say?

[John McDonnell]

I will give the Labour party the benefit of the doubt. It has the national policy forum at the weekend, where there is the discussion and development of policy. That is the healthiest level of democracy we have had in the party for a number of years. I hope that it is bubbling up into a comprehensive programme that we can put before the electorate and that addresses the central issue of inequality. One way of doing that is to have accurate information before us, which is what the new clause seeks.

I will finish there because I know that other Members want to speak. I just warn the House that unless we address inequality, we will reap a whirlwind in our society. We saw riots only a few years ago. I think that the injustices in the distribution of wealth will provoke even greater conflict in our society unless it is addressed.

Enterprise and Regulatory Reform Bill

Debate between John McDonnell and Richard Fuller

Tuesday 23rd April 2013 Commons Chamber

[John McDonnell]

Thirdly, I would be grateful for the Minister’s views on the limited period of time in which that will be done. I have heard about months and also a full year—whatever view is realistic. I think it would be possible in a year not only to deliver clear definitions and guidance on implementation, but to mobilise the whole community around this issue and to convince people about the need for this provision.

Finally, this amendment contains a review period so that if we reach nirvana and the elimination of caste discrimination in this country, we can return to the issue and remove the measure from the legislation.

If all those statements are accurate and agreed across the House, I now understand the point we are at, so perhaps others will as well. I think it has been a significant victory for democratic debate in this Chamber and the wider community. Lots of organisations have been involved in this discussion. Not everybody is happy, but we have reached an understanding that there is a problem to be addressed. No matter how small people think it may be, this issue is significant for many of us and it is being addressed appropriately with some subtlety and understanding of people’s views, so that those are taken into account. I welcome the overall approach that has been agreed.

[Richard Fuller (Bedford) (Con)]

I, too, thank the Minister for bringing forward this amendment and for the thoughtful way it has been crafted. I also thank and pay tribute to the hon. Member for Stretford and Urmston (Kate Green) for her speech, and for pointing out some of the practical steps that can be taken.

I know that those on the Government and Opposition Front Benches have felt a sense of thoughtful consideration and sometimes anguish about this issue, but it has always been fairly straightforward for me. I am not diminished as a person because we ban discrimination on the basis of race or gender, and I will not be diminished as a person because we ban discrimination on the basis on caste. All those are exemplary measures for the Government to take.

I was reflecting on caste, and it occurred to me that if we define caste as occupation, I too carry my caste in my name. A fuller is an occupation; we are the cleaners of wool—with a rather unsavoury material, I think. I do not know where in the hierarchy that might sit, but I do not think it would be at the top. However, I am a greater man because I am my father’s son, and—to be clear for the record—also because I am my mother’s son.

I would like to ask a couple of questions and make a point. Will the Minister provide not precision but some clarification on the timetable and say when she anticipates that the order will be enacted?

May I point out something that has not been mentioned yet? Any repeal of the regulation will require a resolution of each House and will not simply be done by the Government of the day. That is a welcome feature of the legislation.

Finally, we have spoken of the great contribution to the legislation of community groups with differing views. I pay tribute to my constituents who have brought the matter to my attention and to the attention of others. As with all legislation that is enacted, there is a responsibility to ensure that the protections provided are used appropriately. We need to ensure that it is not open season for people to use the law just because it is another option. The measure is there to be used in very serious cases—hon. Members know that they are rare but extraordinarily important. We do not want the changes to the law to be misused by people, such that the voices that have been heard in the House today are drowned out in the legal courts in future.

Death Penalty (India)

Debate between John McDonnell and Richard Fuller

Thursday 28th February 2013 Commons Chamber

[John McDonnell]

Exactly. I am sure that other Members will raise the question of what is happening with the Dalits and other groups.

The eight-year moratorium lulled us into a false sense of security. Naively, many of us thought that although India retained the death penalty on the statute book the continuation of the moratorium was an indication that it would eventually be abolished once and for all. Unfortunately, that was a naive judgment and our hopes were dashed in the spring of last year when reports emerged that the Indian Government were moving to execute Balwant Singh Rajoana and, possibly, to authorise the execution of Professor Devinder Pal Singh Bhullar. That caused widespread concern among the Punjabi community in the UK, across many of our constituencies and across the world.

I want to refer to the two cases, as they have been prominently mentioned in the media and carry immense significance around the world, the Rajoana case for its historical context and the Bhullar case because it is almost now a symbol of the injustice meted out to so many Sikhs in recent decades.

Let me deal first with Balwant Singh Rajoana, a former member of the Punjabi police. He has publicly acknowledged his role in the killing of the chief Minister of the Punjab, Beant Singh, in 1995. He has refused to defend himself and refused legal representation, and he has not asked for mercy. However, Sikhs and Sikh organisations in gurdwaras have appealed for mercy on his behalf, and urged the Indian Government to appreciate the context of Balwant Singh’s actions and the feelings of the Sikhs at that time and now.

Balwant Singh was party to killing Beant Singh, the chief Minister of the Punjab. We now know that Beant Singh personally commanded the police and security forces in the killing and disappearance of possibly more than 20,000 Sikhs—men, women and children. Faced with the failure of the Indian authorities to take action against the former chief Minister for his crimes against humanity, Balwant Singh and a co-conspirator took the law into their own hands. Nobody, including Balwant Singh, claims that he is innocent of the killing, but Sikh organisations, human rights lawyers and human rights groups are urging the Indian Government to take into account the context of his actions, the scale of the human suffering that the Sikhs were enduring at the time, and the anger that young men such as Balwant Singh felt at the failure of the Indian state to bring to justice the chief Minister responsible for the atrocities against the Sikhs in the Punjab. On that basis, they plead for understanding and mercy on Balwant Singh’s behalf and that the death penalty is avoided at all costs.

If Balwant Singh Rajoana symbolises the suffering of the Sikhs in that period, Professor Bhullar symbolises the injustice meted out to Sikhs, to be frank, over the years at the hands of the Indian police and the judicial system. Professor Bhullar came to the attention of the Punjab police because he investigated the abduction and disappearance of a number of his own students. The disappearances were linked to the Punjab police. The resultant persecution of his family, with the disappearance of his own father and uncle and others, led him to flee to Germany for asylum. Tragically, the German authorities believed the assurance of the Indian Government that he would not face the death penalty, and he was returned to India.

The German courts have now ruled that that deportation was wrong. Professor Bhullar has been in prison for 18 years. He has been convicted of involvement in an attempted political assassination solely on the basis of a confession, which he retracted, with not one of more than 100 witnesses identifying him at the scene, and on a split decision of the court judges. In split decisions in India, the practice of the courts is not to impose a death penalty, but Professor Bhullar has been sentenced, held in solitary confinement for eight years and, despite his deteriorating health, his plea for mercy has been rejected. Despite a further petition to the Supreme Court, the fear is that the Indian authorities could move to execute him at any time. This is a shocking miscarriage of justice waiting to happen unless we can intervene effectively.

The fears for Balwant Singh Rajoana and Professor Bhullar prompted the launch of the Kesri Lehar campaign last year. Our fears were compounded when on 21 November India ended its moratorium on the death penalty and executed Ajmal Kasab. In December the United Nations voted for the fourth time for a resolution calling for a global moratorium on executions; 111 countries voted for the moratorium, but India voted against. That is another clear indication of its intent at that time to return to the implementation of the death penalty.

A further execution by hanging took place on 9 February this year. There is a real risk therefore that, with more than 40 people now on death row in India, with 100 more sentenced to death each year, many more executions are likely to follow unless action is taken.

[Richard Fuller (Bedford) (Con)]

The hon. Gentleman just mentioned the UN vote. The Prime Minister has just come back from India and the UK Government and Governments around the world have high expectations of the future for India. What message does the hon. Gentleman think it sends to the rest of the world that India voted against the moratorium at the UN?

[John McDonnell]

The message was clearly interpreted by our communities, our constituents and the Kesri Lehar campaigners as showing that India is now intent on the restoration of the death penalty with its full force. That is our fear. The executions that have taken place have confirmed those fears.

Public Service Pensions Bill

Debate between John McDonnell and Richard Fuller

Tuesday 4th December 2012 Commons Chamber

[Richard Fuller]

I am intrigued by the hon. Gentleman’s point. He is absolutely right that firefighters, prison workers, doctors and nurses contribute to their pensions, but so do taxpayers. Indeed, a considerable amount of most public pensions is paid for by the taxpayer. If he wishes to push the point about certainty, does he agree that the Government should have considered a fully funded pension scheme, rather than rely on future taxpayers to pay for future pensions, with all the uncertainty about whether they will be able to afford it? Should the Government not have grasped the nettle and gone for a fully funded pension scheme now?

[John McDonnell]

The local government scheme is fully funded, yet the Government seek to interfere with that, too. If we are to open up the debate, let us do so; however, the Government seem to be making piecemeal reforms for their own economic objectives and then not even standing by them. The problem is the uncertainty.

Let me turn to the detail of amendment 4. As those of us who have been involved in pension negotiations will know, one of the most important elements is ensuring that the valuation process is right, because that is what determines not just the future payouts from the scheme, but its future security; there are also probity issues. I am concerned that the legislation as drafted would give no role to employees or their representatives in the revaluation system. My amendment 4 is a mild-mannered amendment to provide that the valuation report should be sent not just to the scheme manager and the employer, but to the employees’ representatives. That would promote at least some openness and transparency, which might reassure participants in the scheme.

Few pension decisions are more important to employees than the contribution levels, which stem from the valuation process. We have seen a unilateral change in contribution rates, which I think, to be frank, will deter many people from participating in those schemes and may throw the long-term future of those schemes into jeopardy. If there has been a valuation, the report should be sent to the employees’ representatives. It should be open and transparent, and it should then be possible to have a discussion about the valuation. That is what amendment 4 seeks to do. It simply says that the report should be sent not just to the scheme manager, but to the employee representatives, and that the terms of the revaluation should be mutually agreed. It is simply about participation.

[Richard Fuller]

Would the hon. Gentleman, like me, put this issue in the same area as transparency and giving information to people in pension schemes, which will help people to make better judgments? Just as we heard when new clause 2 was being moved, the provision of information about what is in their pension or how that is assessed helps people to make rational decisions.

[John McDonnell]

That is exactly right. There has to be openness and transparency. The point has already been made, but some of us will now have to go out there and campaign to keep people in these schemes. The way to do that is by having openness and transparency about what they are paying in, the benefits being made and, I agree, the overall contribution made by taxpayers.

I fear for the future. We have seen the Fire Brigades Union survey of what would happen if there were increases in pension contributions to those workers’ scheme and also a reduction in benefits. Some 30% told the survey that they would question whether they wished to continue in the scheme. A 30% withdrawal rate would undermine some of those schemes. That is why openness and transparency are important. One of the key areas for openness and transparency is in the valuation process, with the terminology and methodology agreed with the employee representatives, so that they have confidence that the process is being conducted fairly, openly and, to be frank, professionally. In addition, once the revaluation is done, the report should be provided to the employee representatives. I can see nothing in that with which the Government could disagree.

--- Later in debate ---

[Richard Fuller]

Other Members want to contribute to the debate, so I will not give way to the hon. Gentleman. He might have an opportunity to speak later.

If we are to change the retirement age for the careers in question, we must undertake those physical tests as well. My hon. Friend the Member for Finchley and Golders Green (Mike Freer), who is of a similar age to me, has said that he is going to do the police test, and I have agreed that I will do the firefighter test. I reiterate his challenge to the shadow Minister and to the Minister, both of whom are at least a decade younger than us, to sign up to do those tests if we are to proceed with the Bill at the end of Third Reading. I would be very grateful to hear them accept that challenge, and indeed to hear the Government Whip, the hon. Member for Chelsea and Fulham (Greg Hands), do so.

[John McDonnell]

I wish to speak in support of amendments 1, 2 and 9. Amendment 2 is straightforward: it seeks to ensure that people are not forced to retire beyond the age of 65, as most of our work force have planned to retire then. On the argument that the amendment is unaffordable, let me remind hon. Members of what Hutton said about the 2007-08 changes. He said that they are likely to reduce costs to taxpayers of the pension schemes by £67 billion over 50 years, with costs stabilising at around 1% of GDP or 2% of public expenditure.

The other issue involved here is what our priorities are. The last figure I had for how much the unfunded public sector pension schemes were costing us was for 2009-10, when it was less than £4 billion. Some 60% of gross tax relief on pensions goes to higher rate taxpayers—that is £22 billion. The cost of providing tax relief to the 1% of our population who earn more than £150,000 was double the amount we are funding with regard to the public sector unfunded pensions—that is £8 billion. So the fact that we are willing to subsidise the higher paid—the rich—while forcing others to work longer and cutting their pensions at the same time reflects our priorities. That is why I have tabled the amendment: I do not accept the settlement or the Government’s rationale for these proposals.

Amendment 1 was eloquently discussed by my hon. Friend the Member for Wansbeck (Ian Lavery), and I must declare an interest at this point: I am an honorary life member of the Prison Officers Association. One point that the POA made, which we made on Second Reading, is that if we increase the pension age for prison officers, we lose money because more of them will become injured and more will go off sick, and more cost will be incurred in compensation. The actuarial figures are there almost to prove it, so it is anomalous not to include prison officers. The point about psychiatric nurses is the role they play, particularly in institutions such as Broadmoor, where they are dealing with the most difficult cases—physical challenges—within the NHS. I find it bizarre that we are expecting police officers to retire “early” at 60—I hope we do not go to that—because of the physical nature of their jobs in dealing with criminals, yet when those criminals go into prison it appears that they no longer provide a physical challenge to the officers dealing with them then. The situation is anomalous, which is why I support the amendment to include psychiatric nurses.

I also tabled amendment 9, and this is specifically for the Fire Brigades Union. As my hon. Friend the Member for Nottingham East (Chris Leslie) has said from the Front Bench, the Government have set up, in agreement with the unions, the working longer review in the NHS and the physical assessment in respect of the fire service. Evidence is piling in to those reviews—independent academic evidence, and details of physical tests that have been undertaken—to demonstrate that it is tough to do the job at 55, let alone at 60. I have seen some of the evidence put forward in the fire service review. When the previous Government increased the retirement age to 55 it was on the basis that there would be more firefighters doing preventive work and people could be redeployed into that work. This year, only 15 posts nationally have been available for redeployment, so redeployment is not an option. These people are still out there doing that physical job, and it is unacceptable to push the retirement age to 60. That is why amendment 9 would ensure that the pension schemes would be able to take into account the reviews currently taking place and that we would be able to adhere to a lower retirement age, particularly for firefighters and others as they are justified.

I am interested to hear what the Government’s responses will be, so I shall finish on this next point. Overall we seek to ensure that there is justice in the Bill, and that is certainly not the case at the moment. I reiterate that the Bill is increasing the contributions and increasing the length of time that people will be working. Given the life expectancy in my constituency, a large number of my constituents will not reach retirement age. Already, a third of all members across the schemes retire within three years of when they should normally do so because they cannot physically continue in the job. They therefore live on reduced pensions and in some poverty. My constituents will contribute more, work longer, most probably have a reduced pension at the end of it and have to retire early. That is an unjust deal when we are subsidising the wealthy through tax relief on their pensions.

Public Service Pensions Bill

Debate between John McDonnell and Richard Fuller

Monday 29th October 2012 Commons Chamber

[Richard Fuller]

One issue is the fact that the cost that will fall not during this Parliament but on future taxpayers—our children and grandchildren. Does not the Bill do something to relieve some of the burden on future taxpayers? As the Intergenerational Foundation has said, that is a fair way to proceed.

[John McDonnell]

Let me quote the Treasury, which has said that the cost of the unfunded public sector schemes—I am particularly interested in the civil service one—as

“a share of GDP was 1% in 2007-08 and was projected to rise to only 1.2% in 2057.”

Only 18 months ago, the National Audit Office produced the report, “The cost of public service pensions”, and showed that

“when projections of liability are based on earnings, the total annual payments from the civil service pension scheme will be largely stable over the next 50 years.”

So no, I do not accept that analysis, and neither did the Treasury at the time.

I oppose the Bill. Members of my Front-Bench team will abstain tonight, I believe, because they hope they can amend the Bill. The Bill is unamendable to make it acceptable to me. Therefore I oppose it and I wish to have the opportunity to vote on the Bill if I can. If that means walking through the Lobby on my own, I will. I will find a teller somewhere, I hope.

The Bill is extremely damaging to the well-being and living standards of ordinary working-class people. We know that. My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) quoted the definitive piece of work, an independent analysis from the Pensions Policy Institute, which is a charity funded by the Nuffield Foundation to undertake the research. It confirmed that the Bill means that pension benefits will be cut by a third. My hon. Friend the Member for Leeds West (Rachel Reeves) referred to the shift from RPI to CPI, which was a further 11% cut. What the cuts in pension benefits mean is exactly as others have said—a reduction in participation that will ultimately threaten the viability of the schemes. Perhaps that is what the Bill is about—the degradation of the schemes so that they will eventually be replaced by the private sector.

Let me deal with the issue of private sector pensions, which is dragged out on every occasion. It is a rewriting of history. Let us go back to the 1980s and 1990s. The state pension was undermined by the Thatcher Government when they broke the link between earnings and pensions. That also undermined the earnings-related element of the state pension. They encouraged people to enter private sector schemes but, as we heard, they allowed many employers to take pension holidays, not for one or two years but for long periods. Eventually that undermined the schemes and a number of them in my constituency were wound up almost overnight.

Individuals were urged to enter into their own arrangements, which they did, only to be fleeced on their endowment policies and other mechanisms. Previous Governments, particularly in the 1980s and 1990s, destroyed private sector pensions and now this Government are moving on to destroy public sector pensions in the same way.