Cost of Living
Debate between Richard Fuller and Chris Leslie(11 years ago)
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Richard Fuller
My hon. Friend is absolutely right to point out the chasm between reality and certain things promised by Labour. There is also an absence of a basic understanding of economics. It is nice to see the shadow Chief Secretary in his place again. It was not clear from his opening speech whether he understood the difference between deficit and debt, which is quite an important thing to know for someone who wishes one day to hold an important Treasury position.
Richard Fuller
I am very happy to give way. I recognise that the shadow Chief Secretary has been for his economic tutorial, so perhaps he can enlighten us.
Chris Leslie
That is very funny and droll, but does the hon. Gentleman know that borrowing accumulates and forms at the stock of national debt? Has he figured that much out? If he has, will he tell us whether it is true that, during his time in Parliament, his party has presided over the accumulation of £430 billion of borrowing? Is that not right?
Richard Fuller
Boy, has the hon. Gentleman picked the wrong person with whom to have an argument about debt and the Labour party’s record on debt. Let me enlighten the hon. Gentleman on that record. He will never be Chancellor of the Exchequer, but were he ever to achieve that position—
Richard Fuller
I am answering the question. I know it is hard for the hon. Gentleman to follow the argument, but I will put it in bite-sized pieces so that he can keep up. It is important for a Chancellor of the Exchequer to look at not just the indebtedness of the Government, but at the way in which the entire economy is accumulating debt, which is one of the things that the previous Labour Government signally failed to understand.
If we look at the United Kingdom’s debt in the mid-1990s and take into consideration Government debt, household debt and corporate debt, we will see that that total indebtedness was, like that of many other OECD countries, two times the size of our national economy. Over the intervening 15 years—which in this country were spent mostly under a Labour Government—other OECD countries saw their total debt go from about two times to about three times the size of their economy, and that includes all of the impact of the financial crisis. One country in the G8—and only one—increased its total debt from two times to five times the size of its economy, and that was the United Kingdom under the previous Labour Government. It is the consequence of that pervasive debt in the economy that is the real cost of living crisis in this country.
Every family knows that when they have significant debts that they cannot avoid and that they have to pay, their monthly income will be less because they will have to pay back the debt of the past. They are paying the consequences of the Labour party’s failure when in office.
Finance Bill
Debate between Richard Fuller and Chris Leslie(11 years, 5 months ago)
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Chris Leslie
I agree with the Minister about one thing—it was certainly a long and well-scrutinised Bill. To elaborate on that brief moment of cross-party agreement, I, too, pay tribute to all Members who served on the Committee, the Clerks, and the officials who helped pull together a substantial legislative moment in the parliamentary calendar—albeit that the Bill does not do much to help the economy or do much good for the country at large. I am afraid the Bill offers just more of the same: carrying on regardless of the urgent need for action to stimulate our economy.
We know that the Chancellor, scarred as he was from the omnishambles Budget in 2012, decided to go in the opposite direction this year and produce a Budget that contained so little of any import or substance that the Government’s Office for Budget Responsibility said on page 42 of its Budget report, that the Bill would have
“no impact on the level of GDP at the end of the forecast horizon…these measures reduce GDP growth”
in 2013. It is a Finance Bill that sees the economy moving backwards.
This is in the context of a great deal of humiliation for the Chancellor, including the downgrading by not just one but two credit rating agencies. The cherished prize that was supposed to be at the heart of the Government’s strategy—retaining and defending that benchmark triple A status—is gone. Then, of course, as we saw in the most recent figures, there was the humiliation of a rising deficit, not a fall in levels of borrowing.
This Finance Bill has its priorities all wrong. The lowlights include there being little on growth, but yet persisting with the cut to the top rate of income tax. It means that the fortunate 13,000 people who earn more than £1 million a year will get a lovely, juicy tax cut of £100,000, while typical families will be £891 worse off this year on average because of the changes to tax and benefits introduced since 2010. There are failures in a number of different ways, but it has been particularly piquant this evening to focus on the Government’s largesse and the City tax cut to the stamp duty reserve tax that gives £150 million to the investment manager community.
Chris Leslie
I am not sure whether the hon. Gentleman is a former investment manager, but I wonder what his view is of that change.
Richard Fuller
I am grateful for the shadow Minister’s indulgence in allowing me to intervene, and to answer his question, no I am not. The hon. Gentleman mentioned the cut to the top rate of tax and the house tax that Labour wants to introduce. Yesterday, I sat through the debate on Report, and the Opposition Front-Bench speaker was unable to say whether, if Labour get into government in 2015, it would increase the rate of tax and introduce a house tax. For the record, will the hon. Gentleman say whether that is the intention of the Labour party, or is it again just fine words but no real meat?
Chris Leslie
Fortunately for the hon. Gentleman, but unfortunately for the rest of us, there are still two years of this Parliament to go. He has probably two years of employment left in his parliamentary career and although we think there should be a Labour Member in his seat, we will miss him.
In two years’ time, we will set out the detail in our manifesto. When the Conservatives are in opposition after the general election, we hope to implement a radical manifesto that actually does something to benefit our economy. Today, we would implement a mansion tax that would raise a significant sum that we would give away as a tax cut for lower and middle-income households with a new 10p band of income tax. Government Members struggle with this, but we will judge what needs to be in the manifesto in two years’ time when we can judge the needs of the economy.
Government Members think they already know what their fate will be in 2015, hence the Chancellor coming forward with his cuts programme for 2015 when any responsible Chancellor would be rolling his sleeves up this summer and getting on with bringing forward capital infrastructure investment and doing something to stimulate the economy now. There is nothing in the Budget, nothing in the spending review and, more to the point, nothing in the Finance Bill to help growth. Indeed, the most interesting measures are conspicuous by their absence. There is no mansion tax, although there is provision for an annual tax on enveloped dwellings, which usefully illustrates that it is feasible to move in that direction.
Public Service Pensions Bill
Debate between Richard Fuller and Chris Leslie(11 years, 8 months ago)
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Chris Leslie
I am grateful to the hon. Gentleman for making that point, because I think that is indeed the case, but my general point is about the physical demands on these individuals. Today we are debating whether their retirement age should be, as the Minister thinks, 67 or above, or whether it should be at 60—the same age as for other firefighters, police officers and members of the armed forces. It is a simple proposition and the House has the power to make a judgment on it today.
Richard Fuller
The hon. Gentleman makes the case on physicality for those three classes of public sector employees, but the crucial issue is that those people put their lives at risk, which other public sector workers do not. Can he advise the House why the issue was not raised, and why those people were missed, in earlier pension scheme reforms?
Chris Leslie
That is a very pertinent question. We heard from the Minister that 12 million people were affected by the various public service and civil service pension schemes. We heard that even Lord Hutton, in his detailed inquiry, was not aware of the 350 or so affected individuals, because it was a new scheme that started in 2007, and only some MOD firefighters and police will come into the age bracket. Given the complexity of pensions, it is not surprising that some issues were not spotted; apparently even some employee representatives and others were not aware of the anomaly at the time.
These things happen. Mistakes can be made, but it is really important that when a mistake is pointed out, people assess whether they are big enough to accept that it needs to be corrected and justice is done, or whether their pride is such—whether or not this applies to the civil service—that they try to retrofit their arguments to justify a clearly unjustifiable anomaly. That is what the question boils down to.
The only reason I can see for different treatment for those groups is that one set happens to be employed by the Ministry of Defence and the other is in the public service at large. It is such an evident anomaly that the House of Lords, when made aware of the lacuna, correctly sought to repair the fault in the Bill, but incredibly we heard from the Economic Secretary—I am delighted that he has been joined by the Chief Secretary; perhaps he can be lent on by more enlightened colleagues—[Interruption.] The hon. Member for Colchester (Sir Bob Russell) says he will have a go, but he does not have much time as the question will be put shortly. [Interruption.] Anyway, Ministers are not particularly interested in listening to the debate, so it might be useful if the hon. Gentleman could text the Economic Secretary to suggest that he pays attention.
In essence, the Economic Secretary said that the Government were too proud to admit that they had got it wrong. They are still defending the indefensible, but the arguments for admitting the error are overwhelming.
Chris Leslie
How much more of an answer can I give than the actions that we will take in the Division Lobby today? Instead of the party political games that the Liberal Democrats and the Conservatives are playing today, it is a responsible thing to do to try to help—[Interruption.] They laugh, but this is not a laughing matter. They expect these firefighters and police officers to work up to the age of 67 or above, and that is not the right thing to do.
Chris Leslie
I have given way enough to Conservative Members and I want to make some progress because it is important to bottom out these specious arguments that the Minister can barely grasp.
Lord Hutton said that the reasons for giving uniformed forces a lower normal pension age is the
“simple argument that the nature of their service is unique and should be reflected in the pension arrangements that we make for them. ”—[Official Report, House of Lords, 12 February 2013; Vol. 743, c. 520.]
In his report he recommended that the Government set a new normal pension age of 60 across the “uniformed services”. That was the phrase that he used. He did not refer to the type of pension they were in; instead he referred to “uniformed services”, and argued that they deserved to be singled out because of the nature of their work. The spirit of Lord Hutton’s recommendation clearly applies to MOD firefighters and police officers. Lord Hutton said:
“The nature of the work the uniformed services perform is unique and this needs to be reflected in their Normal Pension Ages. The modernised firefighters scheme has struck a balance between recognising these changes in life expectancy, but also recognising the unique nature of the service provided by scheme members. The Commission’s view is that the Normal Pension Age in this scheme, 60, should be seen as setting a benchmark for the uniformed services as a whole.”
We agree with Lord Hutton’s reasoning that the amendment was merely intended to correct an oversight that has occurred in drawing up the Bill. He supports the amendment and the reform is based on his idea. He said that
“if, during the course of my inquiry, I had known about the unique circumstances of the MOD firefighters, I would have referred specifically to them in my report…Sadly, this issue was not drawn to my attention, so it did not make any specific recommendations about the MOD firefighters or the MOD police. If I had known about it, I certainly would have done so.”—[Official Report, House of Lords, 12 February 2013; Vol. 743, c. 570.]
It is important to mention this. We are towards the end of the Bill’s passage and we have not had much opportunity to debate it. This has been brought to my attention during the course of turning the pages on the detail of this pension legislation. The Opposition say the same as Lord Hutton. This is just one of those anomalies that we should be big enough to admit was wrongly overlooked in previous reforms.
It is true that the last Government raised the normal pension age for the civil service to 65 for post-2007 entrants, and that included Ministry of Defence staff. However, I am now convinced that had we known then about the small group of firefighters and police officers who are technically on the civil service payroll rather than employed by police or fire authorities, we would have taken account of these groups, and an exception could have been carved out. There should be no embarrassment inside the Treasury in admitting that this was an oversight. Regarding this previous change, even the Defence Police Federation said that the
“Council of Civil Service Unions did not consult the DPF, and we did not have the opportunity to make the above points about the physical demands of being an MDP officer”.
The issue was not raised or considered when it should have been. Those staff should not be punished because of that particular oversight. If Lord Hutton is able to admit the oversight and if Opposition Members in this Chamber are able to admit the oversight, the Economic Secretary should be big enough now to do the same. Rather than just read out the brief provided to him, he should engage his brain, use his own judgment and discretion, and do the right thing. If he engaged the brain of the Chief Secretary, who is sitting alongside him, that might go some way towards a solution.
There is the cost to the public purse argument, but as I understand it, only 56 people have joined the Ministry of Defence police, and fewer than 300 have joined the defence fire and rescue service since 2007. So the anomaly could be easily corrected by bringing a small minority of pensioners back into line with the pre-2007 entrants’ normal pension age of 60. We are not talking about a large number of firefighters or police officers here. Sadly, we have had to get to the Floor of the House of Commons to put the pressure on the Government. What the Government have tried to present as a cost is in reality a reduction in the predicted saving from this overall package of changes. They overestimated the savings to be made by overlooking the existence of this particular group of fire and police officers and failed to include them in the definition of uniformed services.
The Minister might put up various arguments, but the question of physical burden cannot be overlooked. A worker for the Ministry of Defence police may be required to wear 11 stone-worth of kit, and a normal shift will involve wearing 5 or 6 stone-worth of equipment for up to 11 hours. Workers in the Ministry of Defence fire service carry out the already difficult and dangerous job of firefighters, but do so in war zones and other extremely hazardous conditions around the world.
The fact that these workers are labelled civil servants should not blind us to the reality of what their jobs entail. Along with the police and the armed forces, they are the only public service workers who have to undergo regular fitness tests. In fact, the majority retire before 60 because they are unable to meet the high demands their jobs entail. They are also recognised as uniformed forces in the civil service pension scheme, and there is a small reflection of that already. Unlike civilian police forces, there is no option in the MOD police for officers to move to unarmed work if they struggle to cope physically. Even when mainstream police officers are armed, they are not expected routinely to carry guns around beyond the age of 55.
Another point that has been brought to my attention today—I imagine that this is something none of us is massively familiar with—is that many MOD firefighters have to work alongside colleagues who will qualify for retirement at 60. Royal Air Force firefighters—I think that they are called Trade Group 8—will often be on similar operations with service colleagues, working in the field together. One colleague will retire at 60, whereas another standing next to him will be required to work to 65, 66, 67 or beyond. The same applies to Royal Navy firefighters, who are regarded in their classification as armed forces. This is riddled with anomalies, and it would be very simple for Ministers to overcome them. They really ought not to have allowed this to become such a large point of debate.
Richard Fuller
I do not wish to disagree with my hon. Friend, but I may have to do so. Many jobs in both the public and private sector are physically demanding, but I would not advocate a different retirement age purely on the basis of physicality. The Opposition Front-Bench spokesman tried to make a specific point about physicality, but I believe that that is the wrong course to take. I believe that this group of workers—the MOD police force and firefighters—have an additional requirement placed on them by us, the taxpayers, whereby we ask them as part of their responsibilities potentially to put their lives at risk, or at least to put the safety and interests of the public ahead of themselves. If I may say so, that is a far more appropriate basis for our looking at this particular issue. People may wish to make the case for physicality, but there is a special case here that goes above and beyond that. That is, I think, the reason why the Minister has taken such great interest in trying to find a solution on this issue.
I welcomed hearing the Labour party admit that it completely forgot about these people when it was in office and raised the pension age. Hearing that was welcome, because all Governments make mistakes and people do get missed out in the transitions. Let me explain what I would like to hear from the hon. Member for Nottingham East (Chris Leslie) today. There is a chance in future—I do not think it will be in 2015, but it is likely at some time for these public sector workers in the MOD, the fire service or the police force—of there being a Labour Government.
Richard Fuller
I am pleased that the shadow spokesman raises that possibility. Is he therefore prepared to put his money where his mouth is—today? He has made a commitment, but is it just words? If he is so confident of being in office, will he pledge today to ensure that these MOD workers have the same conditions as he advocates? I give way if he wishes to make that pledge.
Chris Leslie
The hon. Gentleman knows, I hope, that we are not making this decision in 2015; we are making it here and now in 2013. We have to confront the issue. He is trying to find all sorts of reasons not to disagree with the Whips who are leaning on him, saying “Please do not vote with your conscience on this particular issue.” We have accepted that the issue should have been addressed in 2007. Now that there is no excuse for lacking awareness of it—it is being debated now—is he really going to vote today, in his full awareness of these facts, to say that this particular group of firefighters should not be entitled to retire at 60 when all the other firefighters are? Is that really what he is going to do?
Public Service Pensions Bill
Debate between Richard Fuller and Chris Leslie(12 years ago)
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Richard Fuller (Bedford) (Con)
In Committee, we also talked about the risk of people with public sector pensions making the perverse decision not to contribute to their pension because they feel that the contribution rate is going up significantly, missing the fact that a significant contribution is being made to their pension scheme by the taxpayer. Does the hon. Gentleman feel that the new clause would assist members of public sector pension schemes in identifying what a large contribution the taxpayer is making, and therefore help to reduce the number of people who take the irrational step of opting out of the pension scheme?
Chris Leslie
Even though the quality of the scheme has been eroded, as we saw with the unilateral imposition of the average 3% increase in employee contributions—that might even have been before Lord Hutton reported—they are still good defined benefit schemes and we encourage public sector members to stay in them. We have debated our concerns elsewhere over whether the viability of the schemes will be jeopardised by employees being deterred from joining or deciding to opt out. However, we encourage members to stay in the schemes. Unfortunately, the 3% additional contribution is not part of this legislation, so it would be outwith the scope of the Bill to table amendments on that or to debate it. That is a great shame.
It is important that annual benefit statements include not only the employee’s contribution, but the employer’s contribution, as set out in the new clause. If the defined benefit schemes are good, there is no reason not to have that level of clarity and transparency. I have no problem with accepting that that should be part of the information that is given to scheme members. I hope that the Minister will accept that.
New clause 3 is one of the most important proposals in this group. The Government promised to implement what is known as the new fair deal, which is one of the most important aspects of the agreement that was reached in the negotiations between the employee side and Government or employer side of the scheme. The new fair deal would ensure that all public service workers who were compulsorily transferred to an independent contractor, be it a private company, a charity or another third sector body, would be entitled to remain an active member of their public service pension scheme. That is a basic requirement and it was a core part of the agreement. We were glad that the Government committed to it.
The Chief Secretary to the Treasury confirmed the Government’s commitment to the new fair deal in a written statement in July, which stated that
“the Government have reviewed the fair deal policy and agreed to maintain the overall approach, but deliver this by offering access to public service pension schemes for transferring staff. When implemented, this means that all staff whose employment is compulsorily transferred from the public service under TUPE, including subsequent TUPE transfers, to independent providers of public services will retain membership of their current employer’s pension arrangements.”—[Official Report, 4 July 2012; Vol. 547, c. 54WS.]
That is an improvement on the current fair deal arrangements, which ensure that outsourced staff receive broadly comparable arrangements to those under the public service schemes. The Government’s promise to implement the new fair deal was central to the rationale and at the heart of why many public service workers agreed to support the new proposed pensions reform, even though aspects of it were detrimental to them.
Richard Fuller
To press the hon. Gentleman on his point, he has made the assertion—it may be a fact—that the sole criterion for the exemption of these professions from the normal retirement age is the physicality of the job, but does he accept that there are other differences between those types of public sector workers and others and that that might be why they have been given a different retirement age?
Chris Leslie
I wonder what the hon. Gentleman is alluding to; perhaps he should elaborate. The Minister has not said that there are considerations other than the physically demanding nature of being a firefighter, a police officer or a member of the armed forces. Is the hon. Gentleman suggesting that there are different categories of public sector workers beyond some of those physical issues?
Richard Fuller
I will clarify my view, although I cannot speak for the Government. One criterion that differentiates these workers, other than physicality, is that they put themselves in danger in their public service, perhaps not routinely, but as an important aspect of their work. A firefighter will run into a burning building to rescue someone, a member of the police force will stop altercations and put themselves in physical danger, and members of our armed forces routinely put their lives on the line for our country. Does the hon. Gentleman not accept that that is an important point of differentiation and that it is not just to do with physicality, which is the basis for amendment 16?
Chris Leslie
That is why amendment 16, which I urge the hon. Gentleman to look at, does not prescribe different pension ages for different categories of worker. We are looking only to give power to the Secretary of State, who
“may by order specify following the publication of a scheme specific capability review”,
to allow disapplication in relation to categories of public service worker for provisions in clause 9(1).
If reviews are ongoing—the Government have undertaken the working longer review in the national health service, and the fire service review—we must ensure almost as an issue of drafting that any conclusions of those reviews can be enacted and reflected in legislation, if the Secretary of State agrees. That is the extent of the amendment; it would simply ensure that if there are technical reviews of the capability of certain classes of employee, the Government will be able to create exemptions from any arrangement. That is why the amendment is narrowly defined. I accept there is a theoretical or philosophical argument about risk and physicality, but to return to the practicalities of our arrangements, we must look at how the legislation is drafted. That is our duty as a loyal Opposition.
Richard Fuller
The hon. Gentleman is being generous in giving way. He may regard the amendment as narrow, but I regard it as a broad generalisation that seeks to introduce uncertainty in an otherwise specific Bill. If his principle of physicality is an important test for public sector pensions, is it also an important test for private sector pensions or the state retirement age?
Chris Leslie
If a private sector scheme rules to make its own arrangements, it has the flexibility to do so. We are simply saying that in future, some degree of latitude and flexibility should be placed in statute to allow Secretaries of State to take account of the outcome of any reviews. We are not saying there should be a requirement for exemptions to be made; we want to give the Secretary of State the power to implement the findings of any reviews should that be deemed fit.
Richard Fuller
There is one other amendment, which I tabled in Committee, but which we did not push to a vote. Perhaps the shadow Minister can say whether he would be interested in having it proposed in another place. Constituents of mine in Bedford and Kempston are being asked to cough up to pay for the pensions of judges and others on salaries of £150,000. It seems particularly unfair that those on £24,000, which is the average income in Bedford—they are also on a pretty high tax rate—should be asked to contribute to a pension scheme for a judge who will retire on a pension that is two or three times larger than such an income. That has not been changed in the Bill so far. I was not sure in Committee whether the Labour party thought it was fair for my constituents to pay for judges’ pensions. Perhaps the shadow Minister can clarify whether he would like that amendment to be moved in another place.
Chris Leslie
We did not table any amendments on judicial pensions. I suspect that the question of relative taxpayer support for private pensions might come up tomorrow in the autumn statement. I am intrigued that hon. Members have castigated previous Governments for changes that have affected private sector schemes. It will be interesting to see what the effect will be on the sustainability of some of those pension pots, but we can only speculate at this stage and see what happens. However, this question is certainly of the moment. It is only a matter of hours before the Chancellor stands up and—undoubtedly—makes his announcement on pensions tax relief. We will see what happens at that point, but we felt that some significant proposals needed to be made.
Finance (No. 3) Bill
Debate between Richard Fuller and Chris Leslie(13 years, 5 months ago)
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Chris Leslie
My right hon. Friend, who has an excellent track record in raising many of these issues, is completely correct. The vice in which many of our poorest constituents find themselves being squeezed is very much apparent. The changes to the social fund that he mentions are part of the context in which we would want to review the circumstances in which high-cost lending takes place. That is the objective of our new clause 11: we want to examine the possibility of regulatory and/or tax measures to address this problem.
Richard Fuller (Bedford) (Con)
The hon. Gentleman mentioned the fourfold increase in payday loans. Would he acknowledge that a substantial amount of that increase occurred in the period 2007 to 2009, at the start of the recession, and that although the rate has subsequently increased, its growth has tapered off somewhat? Does he also agree that payday loans are but a sub-segment of the sub-prime, high-cost credit sector?
Chris Leslie
Yes, payday lending is indeed a facet of the broader problem. I am not sure about the trends and how things have been moving—the hon. Gentleman may have other statistics that it would be worth sharing if he makes a contribution to this debate—but there is no doubt about the trajectory of that growth, which has been quite marked, which I know is a concern for all Members, in all parts of the House.