Civil Service Pension Scheme: Administration

Debate between Mike Wood and John McDonnell

Wednesday 4th February 2026 Westminster Hall

[Mike Wood]

No. The hon. Gentleman is obviously trying to hide from the fact that his party was part of the Government that awarded that contract in 2012 to the mutual joint venture. He may wish to look at his own party’s part in that if he thinks that it was a mistake. Sadly, the information provided by the Minister for the Cabinet Office to the House last week fell well short of what is required. It failed to address the fundamental question of how the Government allowed Capita to take over the contract in December despite the repeated warnings and the signs that it had clearly failed in its key milestones.

[John McDonnell]

Will the hon. Member give way?

[Mike Wood]

I must continue, because I have only a short time; I have given way twice. We know that in November 2023, Capita was awarded the contract to administer the civil service pension scheme, but we also know that the previous administrator, MyCSP, had its contract extended until December 2025 specifically to allow for a two-year transition period that was meant to reduce risk, not create it. The National Audit Office investigation report published in June 2025 made it clear that MyCSP had failed to meet agreed service levels in the final year of its contract, with complaints more than doubling towards the end of that contract. That is a large part of the reason why the contract was awarded elsewhere.

If I may briefly refer to the tragic case of Philippa—not a constituent but someone who I had the pleasure of meeting because she was the long-term partner of a member of staff of one of our colleagues.

[John McDonnell]

Will the hon. Member give way? He should not be allowed to get away with this.

--- Later in debate ---

[Mike Wood]

As I have said, I did not see the details of the bid. Obviously, with any bid, it is right to look at previous performance. There will be some causes for concern with any of the bidders for large Government contracts because of the complexity of those contracts.

[John McDonnell]

Maybe the Ministers at the time did not see Capita’s Army recruitment fiasco, its primary care fiasco that put patients at risk, the near-collapse of the teachers’ pension scheme or the cyber-attack in which Capita exposed the data of 6.5 million people and was fined millions. Does the hon. Member not think that Ministers might have taken those into account before awarding this contract?

[Mike Wood]

I appreciate that the right hon. Gentleman has not always been an uncritical friend of the current Government, but he has to recognise that his party has been in government for more than a year and a half, during which there were opportunities to take action if they were unhappy with our contract.

As I said, the warning signs were there in black and white. Ministers were on notice of the potential for problems and their consequences. Despite that, on 7 July last year—a full year into this Government—the permanent secretary told the Public Accounts Committee that the Cabinet Office would decide in December whether Capita should take over administration. On 14 November 2025, the Cabinet Office wrote to trade unions confirming that Capita would indeed take over from 1 December, stating that it was satisfied—this Government, this permanent secretary and this Minister’s Department were satisfied—that Capita had taken on board the findings of those reports.

Serious questions have to be answered. What assurances were provided by Capita to Ministers before that final decision was taken at the end of last year? What scrutiny was applied to those assurances and by whom? Why, in his letter to colleagues, did the Minister for the Cabinet Office claim that these issues had only come to his attention “in recent weeks” when both the National Audit Office report in June and the Public Accounts Committee report in October warned of a “clear risk” that Capita would not be ready? The Public Accounts Committee was clear that Capita had missed seven out of its eight key transitional milestones to deliver its IT system and said:

“The Cabinet Office needs to fully develop contingency plans”.

If the Minister is right that he was only made aware of these problems in recent weeks, should the Government not have known far sooner and acted far sooner?

Although it is welcome that interest-free hardship loans are now available, this action has clearly come too late. Those loans should have been made available on an emergency basis from 1 December—the same day that Capita took over administration—so that people were not left in financial limbo. Instead, some pensioners have reported being forced to take out costly commercial loans or to borrow from friends and family simply to cover basic living costs. That is unacceptable. Can the Minister guarantee that no one affected will face further disruption beyond the end of this month? Can she guarantee that pension payments will be stabilised fully and permanently?

The warning signs were there for months, and the failure to act decisively after the publication of the National Audit Office and Public Accounts Committee reports is stark. Although it is deeply disappointing that the Government failed to prevent this from happening, we can all agree that it is now in everyone’s interest—

Tax Avoidance and Multinational Companies

Debate between Mike Wood and John McDonnell

Wednesday 3rd February 2016 Commons Chamber

[John McDonnell]

Let me come on to that point.

It did not take long for independent analysis to show what a derisory sum the Google tax payment was. The word “derisory” is not just my description, but the word used by the hon. Member for Uxbridge and South Ruislip (Boris Johnson), the Mayor of London, as well as many others. Google had a UK turnover of approximately £4 billion in 2014-15. If profits here were similar to those across the whole group, about a 25% return, that implies £1 billion-worth of profits. If the standard 20% corporation tax is levied, that implies a £200 million tax bill for the one year, not the £200 million paid by Google for the decade. As my hon. Friend the Member for Denton and Reddish (Andrew Gwynne) said, independent assessors have estimated that the Google tax rate for the past decade was 3%.

[Mike Wood (Dudley South) (Con)]

Companies such as Simworx in my constituency are extremely successful at selling products around the world that are based on their intellectual property developed in the UK. Does the shadow Chancellor think the profits from that intellectual property should be taxed in the country where those products are sold, or here in Britain?

[John McDonnell]

The economic activity definition has to be examined when profits are assessed. I will come on to that point because it is valid and reasonable.