Public Sector Pensions

Susan Elan Jones Excerpts

Thursday 8th December 2011 Commons Chamber

[David Mundell]

May I just make a little progress and then give way again? I think I have been generous with my time.

Our reforms are not retrospective, nor do they seek to correct the past failure of the Labour party; they are driven by the need for fair, affordable and sustainable pensions in the future. We have reached agreement with the unions on the importance of transparency, equality impacts, participation rates and opt-outs, scheme governance and high-level principles to inform consultations on scheme-level pensions.

[Susan Elan Jones (Clwyd South) (Lab)]

rose—

[David Mundell]

I will give way in a moment.

We have set out our proposals. When we make our reforms, the taxpayer needs to be properly protected from the future risks arising from increases in life expectancy by the link between the scheme normal pension age and the state pension age. On 2 November, after months of negotiations with the trade unions, the Government set out a revised offer that was more generous by 8%.

The offer is generous. Most staff on low and middle incomes will retire on a pension that is as good as what they expect today, and for many it will be better. Lord Hutton has said that it is difficult “to imagine” a more generous offer. The offer includes generous transitional arrangements for those closest to retirement; those closest to retirement should not have to face any change at all. This approach mirrors the steps taken in relation to increases in the state pension age, and it is fair that the same applies here. Anyone 10 years or less from retirement age on 1 April 2012 can be assured that there will be no detriment to their retirement income. However, this enhanced offer is conditional upon reaching agreement. It is an offer that can inform the scheme-by-scheme talks which will continue until the end of the year. Of course, if agreement cannot be reached, the Government may be required to revisit our proposals and consider whether those enhancements remain appropriate.

--- Later in debate ---

[David Mundell]

Indeed. The hon. Gentleman makes a very good point and I am about to come on to some of the issues about the Scottish Government. The point that has been underlined several times in this debate is that there are many issues on which the Scottish Government could make a decision but have chosen not to do so.

[Susan Elan Jones]

Will the Minister give way?

[David Mundell]

I am sure it is not about Scotland, but I will.

[Susan Elan Jones]

I am sure it could be. The Minister refers to transparency and clarity but yet again refuses to answer the question about ministerial involvement, or lack of it, in negotiations. Why will he use those words yet refuse to do that?

[David Mundell]

My understanding is that my colleague the Secretary of State for Health is meeting NHS unions as this debate is going on. There are significant ministerial discussions.

We have set out that the budgets of the devolved Administrations, who have these powers, would not be adjusted accordingly if they chose not to implement the reforms, because they have received higher settlements that reflect the proposed changes. If the devolved Administrations do not implement our public sector pensions reforms, Barnett consequentials will be reduced.

The Treasury wrote to tell the Scottish Government they had to apply the 3.2% increase in contributions or make up the shortfall and presented them with a choice. They could have chosen not to apply the increased contributions and make up the difference to the Treasury, but they followed a now familiar pattern: they failed to take any sort of decision and blamed Westminster at every turn. Their manufactured outrage is a smokescreen designed to cover the fact that they have no answers for the people of Scotland on how they would fund public sector pensions, never mind the wider state pension. We have asked them often enough—

--- Later in debate ---

[Guto Bebb (Aberconwy) (Con)]

First, may I say that I might not be here for the wind-ups, because I have to catch a train to Brussels for Welsh Affairs Committee work? I hope that I will be able to be here, but if not, I present my apologies in advance.

This is an important debate, and I am grateful for the opportunity to contribute. One of the disappointments so far has been the fact that many Opposition Members have implied that coalition Members, whether they are Liberals or Conservatives, despise the public sector in some way. That is simply not the case, and I reject the suggestion completely. As a coalition Member, I find such comments offensive. I depend on state schools for the education of my children, I am the son of teachers and I am married to a public sector worker, so I find such comments completely unfair. Opposition Members should consider the matter carefully before making them.

We are aware of the importance of the public sector, so much so that we are proposing changes that Lord Hutton, the Labour peer who produced the report on the matter, said were possibly not affordable.

[Susan Elan Jones]

Can the hon. Gentleman confirm that he is not in fact the son of Conservatives?

[Guto Bebb]

That is an interesting question, and I am not sure. My father certainly ended up voting Conservative, but I cannot comment on my mother, because I think that how somebody votes at the ballot box is their choice entirely.

We are quite often accused of attacking the public sector or introducing unfair policies, yet the coalition Government are trying to deal on a long-term basis with issues that the previous Labour Government did not deal with. When we talk about fairness, which is important in this debate, I wonder where the comments of Labour Members were on the raid on private sector pensions. Where were their comments in defence of people with poor rates of pension provision who were saving with their own money—working people saving for their retirement? Where was the Labour party when it came to defending those people when the previous Labour Government raided pensions to the tune of £5 billion a year? That was a scandal. It was not fair, but we heard nothing from Labour Members.

Even worse, the raid on private pensions was made with the justification of helping young people back into work. In 2010, the rate of unemployment among young people was higher than in 1997. The raid was unjustified, not effective and unfair.