Public Service Pensions Bill

Mark Durkan Excerpts

Tuesday 4th December 2012 Commons Chamber

[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.

[Mark Durkan (Foyle) (SDLP)]

The hon. Gentleman is right that many of us might well have to campaign to ensure that people invest in and stick with these schemes, but even if we get valuation and transparency right, is there not a “There’s a hole in the bucket, dear Liza” syndrome with these Henry VIII powers? People will say, “You can say all that, but you can’t promise that it will be so when I reach pension age.”

[John McDonnell]

I fully agree. What concerns me is that the Henry VIII powers in clause 3 are retrospective. This is another reason why the valuation process is so critical: if there is not full openness, transparency and consultation, in particular with employee representatives, the Government could in future use the valuation process to withdraw some of the benefits of the scheme or increase the contributions retrospectively. People can sign up to a scheme and pay into it for 20 years, but then be told that the benefits are different—although I think that will be tested in law, because I believe that legally we are talking about accrued rights that are protected under European legislation. The Government do not accept that argument, but it is a critical point. That is why I have tabled my amendments. The Government underestimate the anxiety and fears out there—particularly among trade unions, but also in other organisations—which arise from the lack of confidence in the future management of the schemes in the best interests of employees and members.

Let me turn to my amendments 7 and 8. The Government’s reform was meant to change the nature of the schemes, so that they would be based on career averages, exactly as my hon. Friend the Member for Nottingham East said from the Front Bench. However, that is for a defined benefit scheme, not a defined contribution scheme, yet the Government have not committed themselves to that in the legislation. That is why I have tabled amendments 7 and 8, so that where a scheme is rearranged or staff are transferred into a new scheme, they must be defined benefit schemes, because that is what was promised in the negotiations with the trade unions. It is argued that we are binding future Governments, but all legislation is meant to bind future Governments, and any future Government could revisit this matter. At the same time, we need to try to give at least some security and ensure that the promises given by the present Government are adhered to. That is not much to ask, and it is all my amendments are designed to do.

--- Later in debate ---

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

On Second Reading, I fully recognised the views expressed on the Opposition Benches about public sector pensions being some of the poorest pensions, but I want to return briefly to the point I made about police pensions.

There will be some bitterly disappointed police officers out there this evening. We have heard in the past few minutes about goalposts shifting, while we have also heard about the physically demanding work of prison officers, but it is the exactly the same for our police officers and firefighters. On Second Reading, I commented on the massive changes and pointed out that there is no time for some police officers to recover when the computation is reduced to something like a 30% figure and they are having to work an extra seven years. The projected pension when they first joined the force is now reduced to around 70%. The decisions made in this House have been life-changing ones.

[Mark Durkan]

On the subject of the implications of pension changes for the police, does my hon. Friend recognise that a far bigger cohort of the Police Service of Northern Ireland is affected, because there has been such a turnover since the Patten commission? These people and their families are still facing targeting by dissidents, and they feel mugged by the Government.

[Mr Brown]

I thank my hon. Friend for that intervention. Yes, I fully recognise the difficulties faced across the water in Northern Ireland.

I shall finish now because I know my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) wants to contribute to the debate. As I was saying, what has been determined in this place this evening and over the past few weeks amounts to life-changing issues. Let us hope that there is a chance for some of it to be corrected in the other place.