Oral Answers to Questions

Debate between Sajid Javid and Mike Freer

Tuesday 14th May 2013 Commons Chamber

[Sajid Javid]

I think that the hon. Gentleman joined the House in 2005, and he is probably scarred by his experience during his first term in government, when he saw unemployment in his constituency rise substantially, with youth unemployment going up by more than 100%. He will know that paid work is the best way to raise earnings. As I said earlier, this Government have helped to create 1.25 million jobs over the last three years—more jobs in the private sector than at any other time in our history. He referred to tax cuts; the tax cuts that have come through the personal allowance are for the lowest paid.

[Mike Freer (Finchley and Golders Green) (Con)]

T1. If he will make a statement on his departmental responsibilities.

Public Service Pensions Bill

Debate between Sajid Javid and Mike Freer

Tuesday 4th December 2012 Commons Chamber

[Sajid Javid]

I beg to move, That the Bill be now read the Third time.

I would like to reflect on the importance of this Bill. First, I reiterate the debt of gratitude that this House owes to Lord Hutton of Furness for his comprehensive and adept work with the independent public service pensions commission. The consensus that his report and recommendations have engendered is testament to the care and thoroughness with which he and his team carried out that critical work.

For decades, successive Governments have failed to address the fact that the existing framework for public service pensions is unresponsive to work force and demographic changes. The simple and fundamental truth is that current schemes are not fit for purpose, and they have not responded effectively to the unprecedented improvements in longevity that we have seen over the last 50 years. Largely as a result of people living longer, the cost of providing public service pensions has increased by 40% over that period. At the same time, the number of active, deferred and pensioner members of schemes has risen significantly.

Since 1971 the number of active members has increased by 23% to 5.3 million. At the same time, pensioner member numbers increased by more than 260%, from 1.6 million to 4.2 million. Deferred member data are available only from 1991, when there were 1.2 million preserved public service pensions. There are 3.4 million today. Most of the people who entered public service when the schemes were last fundamentally assessed have now retired.

[Mike Freer]

I apologise for interrupting my hon. Friend’s flow, but will he clarify the application of the fair deal policy to the local government pension scheme?

[Sajid Javid]

We discussed that earlier. Transfers from local government are currently covered by an equivalent policy to fair deal. The Government are considering how most appropriately to apply the principles of the new fair deal policy to the LGPS, but our commitment on fair access to transferred staff stands and applies, including to members of the LGPS.

People are now expected to live significantly longer than the generation that went before them—an average of 10 years more than someone retiring in the 1970s. The increasing numbers of people with public service pensions and improvements in longevity have led to significant increases in the number of pensions that are being paid. Consequently, the cost of paying pensions has increased to £32 billion per year—an increase of a third in the past decade.