Police Pension Liabilities

Louise Haigh Excerpts

Tuesday 6th November 2018 Commons Chamber

[Louise Haigh (Sheffield, Heeley) (Lab)]

(Urgent Question): To ask the Home Secretary if he will make a statement on police pension liabilities and the National Police Chiefs Council’s threatened legal action against the Government.

[The Minister for Policing and the Fire Service (Mr Nick Hurd)]

I am sure the whole House agrees about the need for our public sector pensions to be properly funded and affordable for the long term. That is why the Government announced changes to the discount rate that applies to those pensions at both Budget 2016 and Budget 2018. These changes, I should stress, are based on the latest independent Office for Budget Responsibility projections for future GDP growth.

This change will lead to increased employer pension contribution costs for all unfunded public sector pensions, including those of police forces. Budget 2018 confirmed that there will be funding from the reserve to pay for part of the increase in costs for public services, including the police in 2019-20. My officials are in discussions with representatives from the NPCC and the Association of Police and Crime Commissioners to discuss how this additional funding will be distributed. Funding arrangements for 2020-21 onwards will be discussed as part of the spending review.

As the Chancellor made clear at the Budget, the Government recognise the pressures on the police, including from the changing nature of crime, and we will—Home Office and Treasury Ministers working together—review police spending power ahead of announcing the police funding settlement for 2019-20 in early December.

[Louise Haigh]

Thank you, Mr Speaker, for granting this urgent question.

In a written ministerial statement in September, the Government thought it reasonable to try to sneak out the proposed changes to public sector pensions. The NPCC has said that this liability, dropped on police chiefs at the last minute, will cost £165 million in the next financial year, rising to £420 million in 2020-21. This could amount to the loss of a further 10,000 police officers. Despite what the Prime Minister has repeatedly, and shamefully, told this House—that the police have known about these changes “for years”—police chiefs issued a public statement rebuking the Prime Minister and saying the first notification they had came in September 2018. So quite apart from the fact that the Prime Minister should apologise to the House, the Government should apologise to the police for such rank incompetence. Is it any wonder that police chiefs are now taking the unprecedented step of taking the Government to court?

Without the Minister giving a firm commitment today that his Government will meet the full cost of these pension changes, it is inevitable that further officers will be lost next year. West Midlands police is preparing an emergency budget that could cost 500 police officers; the figure is £43 million for the Metropolitan police alone. Will the Minister commit today—not in the comprehensive spending review in a year’s time, and not in the police grant next month—to meeting the £165 million cost that the Government have left the police to pick up next year? Police forces need this security urgently. If he will not, does he accept that this will mean officer numbers being cut to the lowest levels on record?

Does the Minister further realise that the pension changes will cancel out the council tax rise that hard-pressed ratepayers have coughed up this year? Is that what he meant when he said that the precept rise would enable forces to spend on their local priorities? Will he confirm whether the Home Office has conducted any analysis of whether the police can afford to meet these changes, given that he has been telling them repeatedly to spend their reserves? How many police forces will go bankrupt as a result of these changes?

The police and our communities are facing twin crises. The surge in violent crime is devastating lives, and the crisis in police finances is leaving the police unable to respond. The Government’s serious violence taskforce has met just four times since its creation. That is a shameful response to the horrifying rise in violence, but the Government are not just complacent; they are actively making it harder for the police to keep us safe. It is time for Ministers to step back from the brink, apologise for the risks they have taken with our safety and give the police the resources they need to fight crime.

[Mr Hurd]

It would have been nice to hear from the Labour Front-Bench spokesperson some commitments or some recognition of the need to keep our public sector pensions properly funded and long-term affordable. I am sure that other Labour MPs will want to take the opportunity to make that clear to their constituents. That was one of the most disgraceful pieces of shroud-waving that I have heard, even from Labour Members. The hon. Lady knows the reality, because I am sure that she has studied Budget 2016 in detail. In it, the Treasury made it quite clear that there were likely to be changes to the discount rate that applies to public pensions.

What has changed is the independent Office for Budget Responsibility’s projection for GDP growth, which changes the discount rate that applies. That is a change, and I fully accept—the hon. Lady has heard me say this publicly—that it has resulted in an unbudgeted cost for the police of around £165 million next year. That is a serious issue—she has heard me say that publicly as well. I set that alongside other serious issues facing the police, such as the significant shift in demand and pressure on them, which we have recognised. We are working extremely hard with the police and the Treasury to find a solution.

What I would say to the hon. Lady is that, as a result of the action that this Government have taken on the economy, we are now in much better shape to resume our investment in policing. That is why, in this year, we have taken steps that have resulted in £460 million-worth of additional public money going into our policing system—the police settlement that Labour MPs voted against. We are on track to invest more as a country in our policing than promised under Labour, so she needs to be very careful about what she says about projections in this context.

Finally, as a London MP, I take offence at the hon. Lady’s statement about complacency on serious violence. She knows, because I know how seriously she takes this job, that we are dealing with one of the most serious challenges that this society faces. We have beaten it before, 10 years ago, but we know that it is not simple. We know that it involves complex, long-term work, which is why, under this Home Secretary, our ambition has been increased so that there will be more money for policing and more powers for the police coming through in the Offensive Weapons Bill. There is almost a quarter of a billion pounds of public money being committed to critical work on prevention and early intervention to ensure that we get the right balance between robust policing and really good prevention and intervention work over time. She knows, or should know, that we cannot police our way out of this system. We are addressing a very serious challenge with the right level of ambition and partnership with the police and the police and crime commissioners.