Penny Mordaunt
Main Page: Penny Mordaunt (Conservative - Portsmouth North)Firefighters’ Pension Scheme (England)
Penny Mordaunt Excerpts
The Parliamentary Under-Secretary of State for Communities and Local Government (Penny Mordaunt)
I can see that it will be up to me to recalibrate the debate —both the issues, as the right hon. Member for Leeds Central (Hilary Benn) has been telling only half the story, and the tone. The Opposition have come to the House in anger to ask for the revocation of a pension scheme that improves considerably on their 2006 scheme, through a debate that they nearly did not call for—they did so only when there was no possibility of its being held before the regulations became law. Hon. Members and firefighters will draw their own conclusions about why that was the case.
The Opposition have proposed no alternative, let alone said how they would pay for it. They have not responded to the consultations, including the latest one on fitness. Protections will be introduced for firefighters, including those in the 2006 scheme who already work until 60.
Jim Fitzpatrick (Poplar and Limehouse) (Lab)
The hon. Lady says that the Opposition have not provided an alternative, but my right hon. Friend the Member for Leeds Central (Hilary Benn) has pointed out that alternatives have been found in Cardiff, Belfast and Edinburgh, so alternatives do exist.
Penny Mordaunt
No, the House should be clear that no alternative scheme is available. If the regulations were revoked, a new scheme would have to be designed and consulted on and then introduced in April, and there is very little time to do that. [Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The Minister must be heard. We have a short time for this debate, and Members must not waste time by jeering and laughing.
Penny Mordaunt
To refute the Opposition’s position is a straightforward job, but it is not the one I will focus on this afternoon. The fire service has had three years of wrangling over the arrangements, and there have been many changes to the scheme since it was originally proposed. Firefighters still have concerns, and we should remember that this is their debate. Many have taken the time to lobby Members and to write to me and meet me, and we owe it to them to focus on the outstanding issues, the facts of the matter and their concerns for the future. This is an opportunity to air their worries and their suggestions as to what should be done.
I thank all hon. Members who have put in to speak, raised their views with me or approached me with genuine concerns and in search of solutions. I am here to listen, and I will do all I can to address those concerns and provide reassurances, either today in the House or in the future. Let this debate be of the calibre that firefighters deserve, and let us remember that loose talk has potentially damaging consequences for those in the scheme, if they believe it. Many firefighters will be making financial decisions about their families’ future based on the messages that they take away from today’s debate. Let us remember that what we do today has far-reaching consequences.
Helen Jones (Warrington North) (Lab)
When the Minister has finished lecturing the House, will she kindly tell us why, if there is no alternative to what she proposes, the dispute has been settled in various parts of the United Kingdom, within the same financial envelope? Why can she not even say how much this unnecessary dispute is costing the public?
Jake Berry
Let me return to the pertinent point—today’s debate is important and members of the fire service who are in the Gallery will want to hear it. I visited Rossendale Rawtenstall fire station and had a meeting with the Fire Brigades Union. Its two main areas of concern are, first, someone’s ability to be redeployed in the service at a similar level of pay and pension contribution if they fail the fitness test; and, secondly, some members of the fire service are disproportionately affected by having 20 years of service but not being 45 at the date specified. Will the Minister provide further assurances?
Penny Mordaunt
I will. The hon. Member for Warrington North (Helen Jones) is not correct in what she says, and the other nations have not settled. I will cover the points raised by my hon. Friend in my speech.
Penny Mordaunt
Let me make a little progress and then I will give way. Our goal has been to create a pension scheme that is sustainable and fair to firefighters and the taxpayer. The need to reform public service pension schemes is well established and not in dispute, as the right hon. Member for Leeds Central noted. People are living longer, and the average 60-year-old now lives 10 years longer than in the 1970s. The cost of public service pensions has increased in real terms by about a third over the last 10 years, and the most recent fiscal projections from the Office for Budget Responsibility show that the gross cost of public service pensions is set to exceed £40 billion in the coming years.
Firefighters are not immune to those longevity increases, and the average firefighter retiring aged 50 today after a 30-year career is expected to live and draw a pension for 37 years in retirement. It should come as no surprise to any Member of this House that a pension scheme in which the average member spends 25% more time in retirement than in employment is not sustainable. [Hon. Members: “Give way!] I will take interventions, but I want to make some progress. That is why one of this Government’s first acts was to ask Lord Hutton to chair the independent public service pensions commission and undertake a fundamental review of the structure of public service pension provision. Lord Hutton was clear in his report that the status quo was not tenable, and he proposed that a normal pension age for firefighters should be set at 60—[Interruption.]
Lady Hermon
On a point of order, Madam Deputy Speaker. I am sorry to have to make a point of order, but as the Minister is not prepared to give way I would like to correct the record. There is no industrial dispute with firefighters in Northern Ireland, and I would like the Minister to produce evidence that there is.
Madam Deputy Speaker (Mrs Eleanor Laing)
The hon. Lady will appreciate that that is not a point of order for the Chair; it is a contribution to the debate, and I am sure that the Minister will put her view or correct the record if she wishes in due course. [Interruption.] Perhaps the House will be quiet and allow the Minister to speak. There has been quite enough.
Penny Mordaunt
The retirement age of 60 was introduced in the new firefighters pension scheme 2006—a scheme that the shadow fire Minister, the hon. Member for West Ham (Lyn Brown), helped to introduce as Parliamentary Private Secretary to the then Minister. It is the same age that Lord Hutton said should apply to members of the armed forces and the police, but it is well below the retirement age set for most public sector workers, recognising the unique nature of the occupation. Lord Hutton also proposed actuarially fair early retirement terms, and that pensions should be calculated on a career average arrangement. He found that the firefighters pension scheme 1992 is the most expensive public service pension scheme, at 37.5% of pensionable pay. Currently, for every £1 a firefighter pays into the scheme, the taxpayer pays an extra £5.
Penny Mordaunt
I will make some progress.
In 2008-09 the taxpayer topped up the firefighters’ pension fund with £260 million, just to meet that year’s expenditure. In 2012-13, the top-up was £370 million. The top-up is forecast to rise to nearly £600 million by 2018-19, an increase of £340 million over 10 years. I am sure that Members on both sides of the House would agree that it is not fair to expect taxpayers to meet all the increased costs—
Penny Mordaunt
Thank you, Madam Deputy Speaker. I will take interventions, but I want to make some progress.
Those costs are being met by taxpayers, many of whom have no expectation of enjoying such a generous pension. That is why we ask firefighters, like other public servants, to pay more towards their pensions and rebalance the cost to the taxpayer. There have been three years of negotiations and many changes to the scheme. The notion that there has not is plainly untrue.
Penny Mordaunt
I will turn to the issues of contention, but I will take interventions.
Mr Lammy
I am grateful to the Minister. Does she accept that one of the most serious incidents in the past few years that we asked firefighters to deal with were the riots that went on for four days? Does she accept that the taxpayer wants firefighters who are fit? Does she accept that 60 is too old, and that a fitness test they cannot meet causes huge concern in constituencies such as mine?
Nadhim Zahawi (Stratford-on-Avon) (Con)
Labour is pretending to be outraged. Will my hon. Friend confirm that firefighters retiring at the age of 55 under the new scheme will see a significantly smaller reduction in their pension compared with the scheme introduced by Labour in 2006? Enough of this false outrage: let us talk about the substantive issue.
Penny Mordaunt
My hon. Friend is absolutely correct. I will come on to the point about fitness shortly.
Mr Clive Betts (Sheffield South East) (Lab)
On a point of order, Madam Deputy Speaker. Is it not a convention of the House that, when an intervention is taken, the speaker addresses that intervention and answers it before taking another intervention?
Madam Deputy Speaker
That is not a point of order. The Member who has the Floor can answer interventions as he or she wishes. [Interruption.] Order. We will have order in this House. This is a serious debate, not a matter for squabble. Now stop the noise.
Penny Mordaunt
Thank you, Madam Deputy Speaker. I know many Members wish to speak and make interventions. I am trying to take as many interventions as I can, but if people want me to take fewer I will consider that.
The Opposition and the FBU have two main issues: working until 60, and the impact that that might have on a firefighter’s ability to have a full career and, consequentially, a full pension in the service. I have already mentioned that the normal pension age for firefighters has been 60 since 2006. That was introduced by a Labour Administration. It is the same age for members of the armed forces and the police under the reforms. More than a third of firefighters currently in the service are members of the 2006 scheme and have the expectation that they would retire at 60. A natural consequence of the 2006 scheme is that all firefighters would, in due course, have a normal pension age of 60 without any further action by the Government. No strike was called in 2006, and nothing was done by the previous Administration—nor by the national joint council, which is made up of the employers and the FBU to oversee firefighters’ terms and conditions—to ensure that firefighters would get the support needed to work until 60. It is clear that this was not a particular area of concern to either the previous Government or the FBU in 2006, but it appears that it has become one now. I want all firefighters, whichever scheme they are on, to be confident that they will be able to work until their normal pension age and achieve a full pension.
Penny Mordaunt
I am going to finish this point.
Older workers are vital to the fire service. They have technical knowledge and expertise, and a great knowledge of, and contacts in, their local communities. In contrast to the image of them as clapped out and not up to it, they are invaluable to the service. I want them to remain part of it. It is clear we need to address those concerns to assure people in the service that they will be taken care of if they cannot maintain their fitness and to give younger workers the understanding that they can have a full career in the service.
Andrew Percy (Brigg and Goole) (Con)
I thank the Minister for giving way and for reminding us that the last Government raised the age to 60. Firefighters repeatedly ask me and want assurances about what other roles will be available for them at 55. Will she provide as much reassurance as possible on that issue, about which I and many of my hon. Friends have concerns?
Penny Mordaunt
On that point—seeing as I have been asked to answer interventions immediately—I have expanded the terms of reference of the fitness working group to consider those work force management issues, but I shall give further details about that later.
The issue of fitness has been of personal interest to me. It is likely to be of particular concern to women in the fire service and is the most recent issue we have addressed in the changes we have made. Hon. Members will know that we have set up a working group on firefighter fitness to set out what good practice looks like and to explore the future shape of the work force, and we have consulted on putting principles in the national framework on a statutory footing to introduce protections for older workers. The consultation closed on 9 December. I tabled a written ministerial statement today, along with the proposed amendments to the framework, and we are making the necessary statutory instrument to bring it into force.
These principles were designed with the intention of ensuring that no firefighter aged 55 or over was dismissed purely as a result of losing fitness through no fault of their own. If a firefighter loses health, either physical or mental, they will be eligible for ill-health retirement, and under the final regulations these will be better than the union’s alternative scheme design for “active factors”. If they lose fitness, they must be given the opportunity and support to regain it. If they cannot, again through no fault of their own, they will be offered an alternative role or an unreduced pension. DCLG will audit compliance among fire and rescue services.
I come now to the key point raised by the right hon. Member for Leeds Central. The union has argued that the framework is simply guidance that can be ignored, and it has cited legal advice it has received on that point, but that advice is flawed. The national framework is not simply guidance; it is a statutory instrument, and under section 21 of the Fire and Rescue Services Act 2004 fire and rescue authorities must have regard to it in the exercise of their functions.
To ensure that the fitness principles are being implemented effectively by fire and rescue authorities, I have included in my proposals a review after three years. The union claims this is the wrong kind of regulation—
Penny Mordaunt
I will make some progress because this is a central point.
The union wants another kind of regulation—at this time in the pension scheme. I have explained to the union that the Public Service Pensions Act 2013 does not provide the power to put fitness or wider employment issues in the pension scheme. Without a single service, as there is in Scotland, there is no single fitness policy to refer to.
Sir Alan Beith
My hon. Friend is seeking to offer a guarantee to firefighters in the position she describes, but what would happen if, once this is implemented, a particular fire authority did not give that level of support to firefighters found to be unfit and did not implement the guidance she describes?
Penny Mordaunt
As well as putting the framework on a statutory footing, my Department will be auditing compliance. A small group of people might benefit from the protections, but many more will be thinking about their future in the service, and we need to make it clear, through the fitness group’s work on good practice and by putting the framework on a statutory footing and providing accompanying advice, that we expect fire and rescue authorities to do this.
Penny Mordaunt
I will make a little more progress.
Despite what the union claims, it remains the case that under the regulation agreed in Scotland, it is for the employer to consider providing an unreduced pension to a firefighter who loses their fitness. In those cases, they will have to make a judgment about whether there are “mitigating circumstances” that mean an unreduced pension should be paid. That is the same judgment that English fire and rescue authorities will make. The only difference is that, south of the border, decisions will have to be made having full regard to the fitness principles this Government have set out in the national framework—and the fitness working group will identify good practice to help fire and rescue authorities in that task.
Penny Mordaunt
There will, of course, be a few firefighters who cannot maintain operational fitness. In such instances, the fire and rescue authority will assess why that might be the case. If a firefighter cannot maintain operational fitness for a medical reason—it could be due to a deterioration in the joints, for instance—and that reason is permanent, they will be considered for ill-health retirement and payment of their unreduced pension. Where there is no medical reason or the reason is not permanent, Dr Williams found that the fire and rescue authorities provide remedial training and that the great majority of firefighters are able to increase their fitness levels within a few months. So we are talking about a small group of people, but it is worth remembering, as I said, that many more firefighters who may never find themselves losing capability will be reassured by the fact that those protections are in place. Those protections will encourage people to stay in the service and in the pension scheme.
As well as the work of the fitness working group, much else is happening to improve the support and focus on fitness and well-being. Funds have been made available from the recent LIBOR fines to help firefighters who suffer from post-traumatic stress disorder. This is a diagnosable medical condition, so, depending on severity, individuals would be eligible for ill-health retirement and payment of an unreduced pension.
Penny Mordaunt
The issue of mental health is rightly being given considerable focus with an additional £4 million of the LIBOR funds being made available to Mind, the mental health charity. In the remainder of this Parliament, I will be working with women’s groups in the fire service to examine what further we can do to promote good practice on issues of direct concern to them, and I would like to place on record my thanks for the time they have already taken to meet me.
It of course remains the case that some firefighters may choose to leave the service before age 60, and the scheme facilitates that by allowing firefighters to retire early on a cost-neutral basis and, as Lord Hutton recommended, with an actuarially fair reduction to reflect the longer time the pension is likely to be paid.
Penny Mordaunt
We have chosen to protect those who are closest to their retirement age—everyone within 10 years of that age.
Penny Mordaunt
I am going to make some progress because I do not have a lot of time left.
Let me return to the issue of active factors, about which I was asked earlier. Active factors present a very uncertain early retirement calculation, as they will be very sensitive to short-term changes in inflation and earnings growth. For instance, the Government Actuary’s Department has calculated that using the actual earnings and inflation figures between September 2008 and September 2012 to set the factors would result in an early retirement reduction of about 27% at age 55 under active factors. This compares with the early retirement reduction of 21.8% under the 2015 scheme regulations—a massive improvement, of course, and almost half of what the 2006 scheme introduced. [Interruption.]
Madam Deputy Speaker (Mrs Eleanor Laing)
Order. The Minister is not giving way. Members must allow her—[Interruption.] Order. The House must allow the Minister to conclude her speech.
Penny Mordaunt
Thank you, Madam Deputy Speaker.
Given that time is short, I am going to turn to the issue of redeployment opportunities, which many Members raised. Let me be frank that the availability of other redeployment opportunities is a matter for the employers, but the situation today cannot be compared with what may be the case in 2022, just as it cannot be compared with the roles that applied a decade ago when fire and rescue services were responding to twice as many incidents. Increasingly, firefighters are doing different jobs, working more closely with their communities to prevent fire or developing more specialist rescue capabilities.
What I can say is that if firefighters are prepared to extend their roles away from those prescribed in the national joint council conditions of service—the “grey book”— more alternative roles may be possible. That in turn may allow the service to develop a more diverse work force that will benefit from the experience and skills of older workers, more women, and members of other communities who remain under-represented. I think that would be a good thing.
Mr Henry Bellingham (North West Norfolk) (Con)
Will my hon. Friend give way, on that point?
Penny Mordaunt
Bear with me.
The fire and rescue service faces a time of change as it responds to the changing needs and priorities of the communities it serves. If it is to reach its full potential, we need its firefighters to focus on that goal and not to be distracted by industrial action, divisive negativity, scaremongering, and poor employer practice. They deserve better: they deserve better than the 2006 scheme. The new scheme provides substantially better early and flexible retirement terms, focuses more on good practice in fitness, and pays more regard to supporting a more diverse work force, and women in particular.
Penny Mordaunt
No. The right hon. Gentleman has had his say.
The regulations that I have laid are fit for purpose, and follow the recommendations of both Lord Hutton and Tony Williams. They are enhanced by the changes in the national framework for fire and rescue for England, and underpinned by the working group facilitated by the chief fire and rescue adviser.
I understand that firefighters may not want to work longer than they planned to, but, although I have ensured that those who are closest to their normal retirement age will be fully protected and will experience no change, not all of them can be immune to public service reforms that are affecting every other public service work force. The firefighters’ pension schemes have been reformed according to exactly the same principles as other public service pension schemes, and the 2015 firefighters scheme will remain one of the best.
Members will be aware that if the regulations—which follow three years of negotiations—fall today, no scheme will be in place after March 2015. The existing schemes will be closed under the Public Service Pensions Act 2013 on 13 March 2015, and if a new scheme and transitional protections for the old schemes are not put in place shortly, firefighters will not have access to a pension scheme from 1 April 2015, and those who have protections will have lost them.
Members will be able to express their thoughts about what action should be taken in future years, but, for all the reasons that I have given, it is vital that these regulations stand.
Dame Angela Watkinson (Hornchurch and Upminster) (Con)
As my hon. Friend the Minister knows, I speak as a member of a fire service family. She has been very kind in meeting me on several occasions to answer my many questions. My main concerns are: remaining operationally fit to the age of 60; the absence of redeployment opportunities; and the effect on pension entitlement for those firefighters who are unable to remain operationally fit.
Firefighting is a physical occupation that requires a high level of fitness to undertake tasks safely—safely for the individual, their colleagues and members of the public. The Williams review estimates that two thirds of firefighters between the ages of 55 and 60 are below the recommended fitness level, meaning not that they are overweight but that that age group has naturally occurring age-related conditions such as arthritis, worn joints and many others. Firefighters are interdependent in dangerous situations, and most aged 55 to 60 are not as fit as those half their age. When they go into a building that is on fire and full of smoke, they have to wear breathing apparatus, and there might be people who have to be brought out to safety. A watch is only as strong as its weakest link.
Penny Mordaunt
I stress to my hon. Friend, whom I know is very concerned about these issues, not least because of her connections, that a great many firefighters are already required to work until 60. At the moment, older firefighters have no protections. We are introducing a measure that will improve the current situation and ensure that if there is no operational role for someone to go into, they will get not just a pension but an unreduced pension.
Dame Angela Watkinson
I thank my hon. Friend for those comments.
Operational fitness has been a major concern in agreeing future employment and pension arrangements. I have read in briefing material that two types of ill health retirement attract immediate access to a reduced pension, but there is concern that another, wider group of firefighters will not meet the new fitness standards and will be deemed not competent, but not permanently unfit, and therefore will not eligible for an ill health pension. If there are no redeployment opportunities—given that, according to the FBU, only five fire authorities have 16 redeployment opportunities between them at the moment, that seems likely—they worry that they will be at risk of dismissal without access to their pension until they reach the normal retirement age. It is the “No job, no pension” spectre that they fear. I hope my hon. Friend can say something about that in her concluding comments.
Will my hon. Friend also please clarify the effect of the revised pension scheme on the following groups of firefighters who are no longer operationally fit: those aged 55 to 60 with a diagnosable medical condition, whether job related or not; those aged 55 to 60 who have failed the fitness standards, but without a diagnosable medical condition; and those two groups under the age of 55? Will they receive a full or reduced salary if redeployed? Will they receive a full or reduced pension if retired? Will pensions be paid immediately on retirement, or will they have to wait until the normal retirement age?
Will my hon. Friend do more to encourage fire authorities to reach a consistent standard, so that firefighters across the country know what to expect with regard to their pensions if they are deemed no longer competent to continue? It would help to avoid future strikes, which nobody wants, firefighters least of all—
Mr Peter Bone (Wellingborough) (Con)
It is a great pleasure to follow the hon. Member for Middlesbrough (Andy McDonald), and I certainly agree with his tribute to firefighters. I find myself in a very difficult position tonight in deciding how to vote on this statutory instrument. The very first debate I ever had in Westminster Hall was on Rushden fire station, which the Conservatives were fighting to keep open and the Labour county council wanted to close. In Northamptonshire we have an excellent fire and rescue service. In some respects it leads the whole of Europe. [Interruption.] Does the hon. Member for Corby (Andy Sawford) want to intervene? I will tell the hon. Gentleman, while I am at it, that Tom Pursglove, the excellent Conservative candidate for Corby, and I are today launching a campaign for more fire cover for north Northamptonshire. We will go up there tonight and—[Interruption.] Does the hon. Member for Corby want to intervene?
Turning to firefighters’ pensions, there is one issue that seems to cut through all of this. I have spoken with the chief fire officer and the FBU representatives and seen firefighters on the picket line, and I went to see Green Watch in Wellingborough. In all these disputes, we should ignore the FBU and the employers and listen to the actual firefighters and what they tell us. The one problem is that firefighters are genuinely worried that when they get to 55 they might, through no fault of their own, lose their pension. If the Minister could give me an assurance that those firefighters would be redeployed or—
Penny Mordaunt
I am very happy to give those assurances—[Interruption.] We have done that.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. I want to hear the answer, and I am sure the rest of us will gain from what the Minister has to say.
Penny Mordaunt
If someone fails a fitness test through no fault of their own and they do not qualify for ill health retirement, they will get a redeployed role or an unreduced pension. That will be put on a statutory footing in the national framework—a full, unreduced pension, if not an alternative role.