Infrastructure

Debate between Sajid Javid and Sheila Gilmore

Tuesday 12th February 2013 Commons Chamber

[The Economic Secretary to the Treasury (Sajid Javid)]

I am grateful for the opportunity to conclude this debate.

I have listened with great interest to the 11 Back-Bench contributions in the Chamber this afternoon. This is clearly an issue about which many Members feel strongly. It is also an issue that Members on both sides of the House seem to agree on in many ways. Both sides want to see a UK with world-class infrastructure and both sides recognise the importance of improved infrastructure for the nation’s economic future.

However, only one party ruined the UK economy after 13 years in government, hugely damaging the UK’s ability to invest in the very infrastructure that we all care about. It was the party that tabled the motion. That same party left the UK with the largest budget deficit in the G20. [Interruption.] Labour Members say that we should look forward. It is no surprise that they want the country to look forward, because they do not want us to remember their legacy, but the country must remember. They left a budget deficit higher than 11% of GDP. They borrowed £159 billion in their last year in government—£5,000 in each and every second of that final year.

Had the previous Government not messed up the regulation of the financial sector, they would not have had to carry out the biggest banking bail-out the world has ever seen, with £65 billion being put into RBS and Lloyds alone. Imagine how much new infrastructure that money could have been invested in. As if that was not bad enough, let us not forget the decision to sell off the nation’s gold reserves at record low prices. Had they not done that, the country would have been £10 billion richer. One thing that we did not hear from a single Labour Member this afternoon was an apology for the damage that they did to this country.

Despite that toxic legacy, this Government have restored economic confidence. We have slashed the record budget deficit by a quarter. We have restored economic credibility and opened Britain up for business again. That credibility has led to record low interest rates, with the Government’s 10-year funding costs having halved since 2010. Each of those steps has been crucial to creating an economic environment in which the Government can invest in infrastructure, and one in which investors feel their funds are secure.

[Sheila Gilmore]

Will the Minister explain to the House and the country why the OBR predictions at the time of the so-called emergency Budget and the comprehensive spending review have not happened, why growth has not happened, and why the deficit has not been reduced at the rate the Government originally promised?

Public Service Pensions Bill

Debate between Sajid Javid and Sheila Gilmore

Tuesday 4th December 2012 Commons Chamber

[Sheila Gilmore]

I thank my hon. Friend for her intervention, but I suspect that it might also be outwith the terms of the new clause, so I shall refrain from commenting.

Finally, there is a risk that we are missing something in Scotland and are not getting—or even trying to get—the powers we could have. That decision might be for purely party political reasons, so that people can lay blame, saying, “There is nothing we can do; we cannot make life better for you because we do not have the power to do so. It is all because of that nasty Government down in London and your only way out of this is to make that amazing leap so that with one bound we are free. Then, everything will suddenly be wonderful,” in the hope that that will persuade the people of Scotland that they should vote for separation. I am confident that the level-headedness of the Scottish people will mean that they will not be taken in by such proceedings.

[The Economic Secretary to the Treasury (Sajid Javid)]

I thank the hon. Member for Edinburgh East (Sheila Gilmore) for her speech. For the short time for which I have been a Minister so far, in every debate and in every Bill Committee in which I have been involved, no matter what the subject, she has spoken. I can always rely on her to quiz me and keep me on my toes, so I thank her for that.

Let me also thank all other hon. Members who have contributed to the discussions we have just had: the shadow Financial Secretary, the hon. Members for Hayes and Harlington (John McDonnell) and for Banff and Buchan (Dr Whiteford), the right hon. Member for Wentworth and Dearne (John Healey) and my hon. Friends the Members for Bognor Regis and Littlehampton (Mr Gibb), for Bromley and Chislehurst (Robert Neill) and for Finchley and Golders Green (Mike Freer). I shall try to deal with all the points that were raised.

I am glad that we are starting with new clause 2 and that we have started our debate discussing annual benefit statements. It is right that scheme members should be kept informed of their pension rights and provided with an annual update. I fully understand the case for doing more in that area and find myself in agreement with the arguments that Members on both sides of the House raised today and in Committee.

I agree that information should be provided for some members, without request, in one format or another. However, I cannot support the precise wording of the new clause. For example, it does not distinguish between active, pensioner and deferred members but we would need to take that distinction into account. I would also wish to ensure that any change was future-proof—for example, we should not inadvertently mandate paper statements when it might be easier and cheaper for schemes to implement online and perhaps mobile technologies in the future.

Although I respect and understand the spirit in which the new clause was tabled, and although I have listened carefully to what hon. Members have said, I would not propose to use its exact wording. I am now persuaded that there is a case for going the extra mile to ensure regular updates are provided for scheme members. That is why we will consider the matter further and propose an amendment in the other place to deal with annual benefit statements.

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[Sheila Gilmore]

I want to address a couple of issues and reinforce some of the points made in Committee. It is not good enough to say that the normal retirement age does not matter because people can retire early if they need to, as they will retire on much lower pensions—that is what actuarial reduction means. Those with many chronic conditions might have several years of suffering with the condition that has made them retire. That is not good enough.

The way in which the Bill is formulated fixes the retirement age in a way that makes it very difficult to introduce the flexibility that might be required by some scheme reviews. There will be a battle every time a review shows that there should be a lower retirement age, as the Government will be able to point to the Bill and say that that age cannot be moved as that is what Parliament voted for. However, amendment 16, for example, would allow the degree of flexibility required. Many people already do not work in the years running up to the normal retirement ages, not just across the public sector but in the private sector, too. As many are living on reduced incomes and having to dip into any savings they might have put aside for retirement, they are much more likely to become dependent on other state support in older age.

We have the big issue of longevity, but underneath that lies the fact that a substantial proportion of the population cannot even work until the normal retirement age, particularly men between 60 and 65 in many private sector jobs. Those people are already living on reduced incomes, so if we keep increasing the retirement age more and more people will be in that position.

[Sajid Javid]

We have had a good debate on this set of amendments, but I am afraid that for reasons of time that are beyond my control I will not have an opportunity to respond on all of them. The main theme in this group is the link between the new normal and deferred pension ages and the members’ state pension age. That will help manage the financial uncertainties associated with longevity changes over the long term. It was a key recommendation of Lord Hutton’s report and is one of the foundations of the Bill.

The average 60-year-old is now living 10 years longer than in the 1970s. Although that is to be celebrated, it would be irresponsible not to react accordingly to ensure that pension provision is sustainable. Clearly, no Government can allow such a trend to continue unchecked.

In the short time I have, I shall deal with the amendments in the order in which they have been selected and I will start with 13, 14 and 15. The deferred pension age in the new schemes is vital given the vast number of public servants who claim deferred pensions. That is why the Bill sets the deferred pension age in all schemes as equal to the state pension age, including in the police, firefighters and armed forces schemes. As Members are aware, a normal pension age of 60 in the police, firefighters and armed forces schemes is in line with Lord Hutton’s recommendations and recognises the unique nature of the work involved.

The amendments proposed by the hon. Member for Nottingham East (Chris Leslie) cannot be accepted by the Government, for two reasons. First, it would be unfair to other hard-working public servants, both those in active service and deferred members whose pension ages would be the state pension age. Of course we value the work of all our police, firefighters and armed forces, but once those people stop doing those jobs, there is no reason for them to be able to take their deferred benefits earlier than everyone else.

Fuel Duty

Debate between Sajid Javid and Sheila Gilmore

Monday 12th November 2012 Commons Chamber

[Sajid Javid]

That is exactly why the Government have taken action on the cost of living, which I will move on to shortly. Let me first talk about the Labour party’s record. It will not admit that it delivered the biggest deficit in the developed world. The shadow Chancellor said only three weeks ago that under Labour

“there was not a structural deficit”.

In fact, there was a structural deficit of £71 billion in 2007-08—more than 5% of this country’s GDP. We should thank him. Whenever anyone might need reminding why the Labour party must never be allowed to run this country again, the shadow Chancellor steps up to the plate—and this motion is another reminder.

[Sheila Gilmore (Edinburgh East) (Lab)]

Does the Minister accept that it is misleading constantly to give a cash figure for the size of deficit and say that it is higher than in countries with a far lower GDP?

[Sajid Javid]

I think that the hon. Lady needs to study the figures and understand what “percentage of GDP” means.

Oral Answers to Questions

Debate between Sajid Javid and Sheila Gilmore

Tuesday 6th November 2012 Commons Chamber

[The Economic Secretary to the Treasury (Sajid Javid)]

My hon. Friend is right to point out that pensioners are facing pressure because of low interest rates and longevity. The Government Actuary’s Department makes recommendations to the Government and we must take them seriously—we keep the matter constantly under review.

[Sheila Gilmore (Edinburgh East) (Lab)]

The Government make a great deal of creating 1 million private sector jobs—[Hon. Members: “Hear, hear!”] Wait, wait. Half of those jobs, according to their statements, were in place after eight months of their coming to office, meaning that in the following 22 months only another half a million jobs were created. That suggests that the rate of growth has slowed substantially as a result of the Chancellor’s policies.

Public Service Pensions Bill

Debate between Sajid Javid and Sheila Gilmore

Monday 29th October 2012 Commons Chamber

[The Economic Secretary to the Treasury (Sajid Javid)]

I thank Members for the lively debate that we have had this evening. In the short time that I have spent as Economic Secretary, I have been helping the Government to try to get three Bills through Parliament, this being the third. In each case, the Opposition have backed off from calling a Division. I am becoming a little concerned: I hope that that does not become a pattern of behaviour.

The Bill represents a milestone in the history of public service pension provision, and I am not surprised that some Members feel strongly about it. Legislation that affects the pension rights of more than 6 million public servants is worthy of serious consideration and scrutiny.

I think that we should bear in mind the economic backdrop to these reforms. During its last year in government, the Labour party burdened the UK with the largest budget deficit since the second world war and the largest in the developed world. It amounted to £159 billion. Labour was borrowing £5,000 a second, which means that it would have borrowed about £90 million between the moment we started today’s debate and now. [Interruption.] The hon. Member for Leeds West (Rachel Reeves) asks how much we are borrowing. That gives me a good opportunity to remind everyone that we have cut the deficit by a quarter. That is what has brought the country economic credibility, and that is what has kept interest rates low and given us the time in which to make serious long-term adjustments to public spending costs.

[Sheila Gilmore]

Will the Minister give way?

[Sajid Javid]

I will in a moment.

Because of their long-term nature, pension reforms will not save money quickly, but they make an essential long-term contribution to the health of public finances. We have heard that today from a number of Conservative Members, including my hon. Friends the Members for Bognor Regis and Littlehampton (Mr Gibb), for Bromley and Chislehurst (Robert Neill), for Monmouth (David T. C. Davies), and for Thurrock (Jackie Doyle-Price). As the Chief Secretary has said, it has been forecast that the Bill will save UK taxpayers £65 billion over the next 50 years.

[Sajid Javid]

My hon. Friend raised the same issue in his speech. I think it fair to say that that would have involved an excessive fiscal cost, and would have been much more complex than the approach that we have taken. I hope my hon. Friend accepts that.

In preparing this policy, we have been careful to follow the recommendations set out by the former Labour pensions Minister Lord Hutton in his independent report. We have heard much about trade unions today. The head of the TUC, Brendan Barber, whom I met recently to discuss our reforms, has described the report as a “serious piece of work”. He has taken a very constructive approach to the problems that the Government are trying to address.

While we are on the subject of trade unions—

[Sheila Gilmore]

Will the Minister give way?

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[Sajid Javid]

As I said, unions representing two thirds of union members have accepted our proposed schemes, and the vast majority of unions have taken a very constructive view.

[Sheila Gilmore]

rose—

[Sajid Javid]

I give way to the hon. Lady.

[Sheila Gilmore]

I thank the Minister for giving way. I want to take him back to what he said previously. As usual, he chose to frame his comments in the context of the deficit. His Government came to power saying that they would eradicate the deficit within the term of this Parliament. Now, after two and a half years, he says that we should be grateful that he has reduced it by a quarter. His economic policies are not working.

[Sajid Javid]

I was expecting a lot more than that from the hon. Lady. I am proud that this Government have already cut the deficit her Government left behind by a quarter. That is a significant achievement. The shadow Chief Secretary, the hon. Member for Leeds West, said she was unable to commit to keeping the CPI change we have introduced to public sector pensions beyond the term of this Parliament. According to the Office for Budget Responsibility, that would leave a black hole in the public finances of up to £250 billion in current GDP terms over the next 50 years. I look forward to hearing how the Opposition plan to fill that black hole.