Public Service Pensions Bill

Debate between Sajid Javid and Simon Hughes

Monday 22nd April 2013 Commons Chamber

[Sajid Javid]

As I make progress and explain the Government’s position, I will come to that point.

The Government do not believe the amendments to be the correct way forward, either for the taxpayer or the forces themselves. I will briefly set out some of the key reasons for our position. Allow me first, however, to reassure both hon. Members and the work forces themselves that the Government understand their concerns. We have listened to the representations and reflected on the discussions in another place, and I want to make it absolutely clear that we recognise the unique position of these work forces and the important role that the defence fire and rescue service and the Ministry of Defence police play.

My colleague Lord Newby met DFRS and MDP officers to talk through their experiences on the ground and the demands of their roles. There is no doubt that these public services deliver a valuable service to the armed forces and the country more generally. The nature of the work they are called on to deliver is often very difficult and at times can be dangerous. On occasion, some members of these work forces might find themselves putting their lives at risk. No one in the House is suggesting otherwise, so let us not be distracted from this important discussion by cherry-picking anecdotes and citing emotive examples of the work involved, because that is not the issue being discussed today.

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Like many people, I have met representatives of workers in the MOD scheme, and they have referred me to Lord Hutton’s comments that he was not aware of the anomaly and therefore did not address it in his report, but that he was sympathetic. I have seen both sides of the argument. Our noble friend Lord Newby said that he would reflect on the debate in the Lords. Have there been any further conversations with Lord Hutton? In general, my understanding is that the Government are seeking to implement Lord Hutton’s recommendations, but this issue has clearly slipped through the net.

--- Later in debate ---

[Sajid Javid]

The hon. Gentleman has made a good point, and made it well. It is important to consider the capability of each work force, especially in view of increased longevity, and to ensure that the retirement age is appropriate. That is what I expect the MOD to do, and that is what it is doing, but it should do it in the context of the particular scheme for each work force, rather than by becoming involved in the details of each work force that are affected by the broad changes introduced by the Bill.

We have a responsibility to look rationally at the costs of the proposed changes. The additional costs may appear small in comparison with the savings that the Government are making through their overall programme of pension reforms, but the Government consider them to be both unnecessary and significant. They are unnecessary because those concerned will continue to have access to the civil service pension scheme, which is an excellent scheme that many in the private sector, including those doing the most arduous or specialist work, would envy. They are significant because some early indications suggest that they could be as high as £10 million a year for the lifetime of the schemes. This expenditure would take money away from front-line servicemen and women, and from other important defence priorities.

Those who support the amendments may believe that the members should pay the cost of the reduced retirement age themselves. That would imply increased employee contributions and a potential average take-home pay cut of over 8%—although it would depend on the exact terms—which might not necessarily be welcomed by members of the forces.

As politicians, we should not be trying to set the fine detail of public servants' pension schemes on the Floor of the House. Rushing at it might lead to mistakes. As I hope I have made clear, I acknowledge that the issue deserves further consideration allowing time for discussions between employer and employee. We owe it to the DFRS and the MDP to get this right.

[Simon Hughes]

What the Minister has just said is very helpful, provided that the Treasury too will be helpful if the negotiations between the unions and the MOD produce a different package. I understand the financial point, and I also understand that this is not just about retirement ages but about all the other benefits, which may be better than they are under the present arrangement. Can the Minister confirm that, if the MOD picks up the baton, the Treasury will not walk away and say “Nothing to do with us, guv”, but will continue to take an interest in the resolution of this outstanding bit of business?

[Sajid Javid]

What I can confirm is that the Treasury and the MOD are in exactly the same place. The MOD agrees with the terms that I am presenting today, and, as I have said, has made it clear that it will think about the issue. It has already written about it to members of the forces, as I would expect it to do in its capacity as the employer of these vital groups of workers.

The Government have not dismissed the claims of the DFRS or the MDP; far from it. The MOD has acknowledged in writing that there is a case for looking at their pension age to check that it is still appropriate.

Finally, there is a technical reason why the Government cannot accept these amendments as they currently stand. They would—unintentionally, I assume—confer powers on the Scottish Parliament and Welsh Assembly to make schemes for these civil servants. That would give new functions to devolved Administrations, without any proper consultation or consideration of whether that is the appropriate framework for managing the interests of these specialised work forces.

In summary, this is a complicated and inevitably emotive issue, and one that we have discussed at some length. I am sure I will not have persuaded all Members present today.

--- Later in debate ---

[Sajid Javid]

I thought I made myself clear but I will say it again: it would not require primary legislation if the MOD decided it was appropriate and right to make any changes to the retirement age.

[Simon Hughes]

The Minister is being very helpful. In answer to an earlier question, he alluded to the timetable that has started. Would it be reasonable to assume that the negotiations are intended to be concluded by the MOD during this financial year at the latest?

Finance (No. 2) Bill

Debate between Sajid Javid and Simon Hughes

Monday 15th April 2013 Commons Chamber

[Simon Hughes (Bermondsey and Old Southwark) (LD)]

Let me say to my hon. Friend and to those on the Treasury Bench that his announcement about a general anti-tax avoidance provision is hugely welcome, particularly in London, where people have seen companies get away with not paying taxes for many years—something that no previous Government have adequately dealt with. It is very welcome and we look forward to it becoming law as soon as possible.

[Sajid Javid]

I welcome my right hon. Friend’s support for the measure.

This Finance Bill includes measures to close 15 loopholes that have been used to avoid tax. Nine of these provisions have immediate effect from Budget day, and one—on tackling stamp duty avoidance—is backdated to the previous Budget, following the Chancellor's clear warning in 2012. This demonstrates the Government’s continuing commitment to fast, effective and targeted action to tackle avoidance. In addition, we are strengthening the successful disclosure of the tax avoidance schemes regime to increase the information that promoters of tax avoidance schemes have to provide about the users of their schemes. Together with the GAAR, these measures will increase tax revenues by almost £l billion by 2017-18, as well as protecting future revenues. In addition, the Government are investing almost £1 billion in HMRC’s compliance activities in order to raise additional revenues of £22 billion per annum by the end of 2014-15. This represents £9 billion more in compliance revenues—a 70% per cent increase since 2010-11.

This Finance Bill introduces a package of measures to ensure that owners of high-value properties cannot avoid paying their fair share of tax by placing their property in a corporate envelope. From April, residential properties held by certain non-natural persons that are worth more than £2 million will be subject to a new annual tax on enveloped dwellings. The Bill also introduces a new capital gains tax charge on these non-natural persons disposing of such high-value properties from April 2013.

Allow me, Mr Speaker, to draw my remarks to a close. [Hon. Members: “Hear, hear!”] I thought that that would bring a cheer. Finance Bill 2013 is a Bill for growth and fairness. It encourages investment, it supports innovation and entrepreneurs, it provides real help to families and working people, it tackles avoidance, and it asks those who are better off to pay more. I commend it to the House.

Question put, That the Bill be now read a Second time.

Infrastructure (Financial Assistance) Bill

Debate between Sajid Javid and Simon Hughes

Monday 15th October 2012 Commons Chamber

[Sajid Javid]

Yes, I can confirm that any application will go directly to the UK Treasury. If an application were made by one of the devolved areas, the Treasury would consider working with its counterparts in that area, but the decision would be made by the Treasury itself.

[Simon Hughes]

As my hon. Friend knows, my colleagues and I support the Bill strongly. May I give him a chance to deal with a point that he did not have a chance to deal with earlier? Will any investment made through the arrangements in the Bill allow the Government to track down the beneficial owners of any companies with which we do business, and to find out where they are based? May I also ask whether the due diligence rules that are set out in the Money Laundering Regulations 2007 will be applied, so that there will be a check on the interest rates, the creditworthiness and the ethics of the companies in question?

[Sajid Javid]

My right hon. Friend began to make his point in the earlier debate, but was unfortunately cut short. The Government are keen to ensure that when they analyse each application that will benefit from these guarantees, they establish the identities of the true beneficial owners of every scheme. Although that process is not included in what was deliberately designed to be a short Bill, much of the detail is included in the individual schemes. It will be in the UK guarantees scheme, and also in the programme that will cover the housing element of the guarantees, which will be published shortly.

My right hon. Friend also raised a point, in relation to one of his amendments, about the beneficiaries of the debt guarantees. He may have been alluding to the actual holders of the debt instruments. Although I understand and sympathise with his principle, this approach would not be very practical because debt instruments, particularly bonds, are tradeable and so, as with gilts, it would be hard to track the owners of those instruments.

[Sajid Javid]

The process of analysing each of the applications under the Bill will include a thorough due diligence process, which will examine the beneficiaries in each case. The Government will not issue a guarantee if they are not satisfied with the outcome of that due diligence process. It is not the standard procedure for the Government to publish all the information they look at when making decisions on guarantees, but the hon. Gentleman should be assured that this will be a very thorough process, which will have the assistance of outside sources if required.

[Simon Hughes]

It may be helpful if, at a date in the near future, friends from all parties might have an opportunity to talk through these things with the Minister when the other scheme on housing is published. May I alert him to the fact that the due diligence tests under the Money Laundering Regulations 2007 are, by objective assessment, not always effectively applied by the banks? So it is all very well having the tests in theory, but we need to ensure that the tests for this Bill are carried out in practice and that we can all see that they are effective and as stringent as they were meant to be.

[Sajid Javid]

My right hon. Friend makes a fair point, and I am more than happy to discuss this in further detail with him at a later stage.