Local Government Pension Scheme
Debate between Tristram Hunt and Ian BlackfordWestminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Ian Blackford
Absolutely. The hon. Gentleman makes an important point that should be seen in the wider context of information that should be given to plan holders, including those in the state pension scheme. All potential pensioners should be given an A4 sheet detailing their entitlements, backed up by transparency about the charges for all the schemes invested in. There is more work to be done.
I ask a simple question: is it really the Government’s intention to be in a position in which they can be challenged regarding seeking to direct local authority pension schemes? The Pensions and Lifetime Savings Association states that the Government ought to pause and reflect on their obligations and on the importance of local democracy and accountability. In their consultation document, the Government state:
“However, given the very large sums of public money at stake, we believe that it is entirely appropriate for the Secretary of State to be able to intervene where concerns have raised, having taken account of all available evidence.”
That is illuminating. As a number of us have said, we are talking about plan holders’ money. Yes, there must be regulation and oversight, but the Government are hardly a neutral participant in the process and they must think again and learn from best practice elsewhere.
Earlier this year, new legislation came into force in Quebec, which has been framed as a measure that potentially ensures that costly defined-benefit plans are sustainable in the long run. We should consider having that here. Under the legislation, the province no longer requires defined-benefit plans to fund themselves based on short-term assumptions about their own finances and market volatility. Instead, they need to fund themselves based only on long-term, less conservative assumptions. The law, which aims to reduce contribution volatility for employers and thus make defined-benefit plans more sustainable, is the first of its kind in Canada. The changes will be particularly supportive when it comes to longer-term infrastructure investment. That is the kind of debate that we ought to have in this country.
The e-petition motion, and the changes to the governance of pension schemes, relate solely to England and Wales, but it is worth reflecting on the fact that there is active engagement on the topic of local authority investment in infrastructure in Scotland, where responsibility is devolved to the Scottish Parliament. The SNP-led Scottish Government are committed to changing pension scheme regulations to ensure that they are not a barrier to local government pension schemes investing in infrastructure, and they are working with the scheme advisory board to achieve that. We in Scotland realise that there needs to be more of a balance between encouraging that approach and paying due regard to the responsibility of scheme managers to invest pension fund moneys in accordance with the scheme managers’ fiduciary duty. The Scottish Government are committed to achieving that delicate balance.
The discussion of pension scheme investment takes place in a wider context, which includes activities centred on the cities and a major programme of infrastructure investment. Cities and their regions are key drivers of our economy and the Scottish Government are committed to working with all our cities to unlock investment, whether individually, collectively through a city deal, through one of the Scottish Government’s devolved initiatives to stimulate growth and deliver infrastructure investment, or through a combination of all those measures.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
It seems to me that it is not only about the democratic right of local authorities to pursue their choices, but also, exactly as the hon. Gentleman is saying, about giving them the kind of fiscal skills that can only help in the furtherance of their city deals. For the Government to try to quash both those objectives seems wholly perverse.
Ian Blackford
I again find myself wholly in agreement with a Member. I am not trying to lecture the Chamber on the things we are getting right in Scotland, but the Government in London could benefit from the kind of collaborative thinking we have developed, which is very much in line with what the hon. Gentleman said.
The fiduciary duty placed on local government pension schemes to act in the interests of the beneficiaries of the funds has to be the underlying principle of investment strategies and has to govern investment decisions. The responsible investment of pension funds must always be prioritised over unstable and risky investment. It is up to local authorities to ensure that they invest the funds to achieve the best outcomes for employees, trustees and sustainable growth. I stress that it is for the local authorities to determine that, and not for central Government to determine for them.
There have been some excellent examples in Scotland of sustainable investment in local housing projects delivering much needed long-term infrastructure that benefits ordinary people. For example, the Falkirk local government pension scheme fund awarded fund manager Hearthstone Investments £30 million to invest in social and affordable housing in Scotland. More than 300 affordable homes are expected to be delivered, with the Scottish Government providing an initial investment of more than £6 million towards 126 social homes in Falkirk and Clackmannanshire. That is the kind of collaborative work that we need across the United Kingdom.
Rather than droning on, I will wind up at this point. On the basis of the consultation that the Government have seen and on the basis of what I expect the Minister will hear this afternoon, I ask that they go back and think again. They need to try to get back to a position of consensus and collaboration with local authority pension schemes in England and Wales.
Defending Public Services
Debate between Tristram Hunt and Ian Blackford(8 years, 6 months ago)
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Ian Blackford
In many cases, we are talking about the Government wanting to charge people who have come here to work and who are already paying their taxes. What a disgraceful way for any Government to behave! That measure is the latest indication that the Tories represent a real and present danger to the NHS.
The Conservatives have mismanaged the junior doctors’ contracts in England and shamefully filibustered the recent debate on a Bill introduced by the hon. Member for Brighton, Pavilion (Caroline Lucas) that would have restated the principle of the NHS being public and free. In the Scottish election, the Scottish Tory leader, Ruth Davidson, stood on a platform of reintroducing prescription charges. Such a measure would be a regressive tax on the ill. It is estimated that the SNP’s abolition of prescription charges has benefited around 600,000 adults living in families with an annual income of less than £16,000.
In England, the Health Secretary—who is no longer in his place—seems to favour confrontation with the health service, but we in Scotland favour a more consensual approach that delivers results. The SNP Scottish Government have delivered record funding for Scotland’s NHS despite Westminster cutting the Scottish budget. They will ensure that the NHS revenue budget rises by £500 million more than inflation by the end of this Parliament, meaning that it will have increased by some £2 billion in total. Health spending in Scotland is already at a record level of £12.4 billion. Under the SNP, the number of employees in the Scottish NHS is at a record high—up by nearly 9% since 2006.
Patient satisfaction with the NHS in Scotland is high, with 86% of people being fairly or very satisfied with local health services, which is up five percentage points under the SNP. That is the result of a popular SNP Government working together with our health professionals to deliver results. Unlike the UK Government, the SNP values and respects the work of all our medical professionals. Were we to move towards a new contract for junior doctors in Scotland, it would only ever be done on the basis of an agreed negotiated settlement. Thank goodness that we are still wedded to the principles of Beveridge in Scotland and will protect the ethos of the health service as a public asset for the common good.
Turning to further and higher education, one of our driving principles is that access should be based on ability, not ability to pay. Tuition fees of £9,000 and potentially more remain a heavy burden on the working families and students of England, and the UK Government must rule out the Higher Education and Research Bill raising the cap. The SNP has guaranteed free university education for all in Scotland, but Ruth Davidson and the Tories would have tuition fees north of the border if they ever got near Bute House.
Tristram Hunt (Stoke-on-Trent Central) (Lab)
Will the hon. Gentleman confirm that the SNP secured free higher education by butchering the further education budget, affecting some of the poorest in the community and those who need FE’s assistance most?
Ian Blackford
No, I will not, because that is not true. Full-time places at Scottish colleges have increased, and I will return to that point.
Ruth Davidson would want to introduce tuition fees in Scotland by the back door. Down here, the Tories are all for front-door fees. In Scotland, the Tories are all about back-door fees. The doors are locked to many who want to participate in education unless they can pay the price. Front door or back door, with the Tories there is always a price to pay. Young people from the most deprived areas in Scotland are now more likely to participate in higher education by the age of 30 since the SNP came to power—up from 35% of young people in 2007-08 to 41% in 2014-15—which is the result of the SNP’s successful education programme. The number of qualifiers from the most deprived areas increased by over 2,300 from 8,035 in 2007-08 to 10,395 in 2014-15.
Overall, since the SNP came to power in Scotland, the number of Scottish-domiciled, first-degree students going to university has risen by 11%. Last year saw a record number of Scots accepted to universities across the UK. That is a record to be proud of. Rather than carping from the sidelines, the Labour party should perhaps get behind what the SNP has delivered in Scotland for the people of our country.
The Scottish Funding Council has invested more than £76 million in additional widening access and articulation places over the past three years and continues to fund a wide range of other initiatives to support access. We will ensure that those who have a care experience and who meet minimum entry requirements will be guaranteed the offer of a university place and a non-repayable bursary of £7,625. In Scotland, we recognise that access based on ability, investing in our human capital, is the right thing to do. That is a non-negotiable principle. It is price worth paying for our children and our future. As my right hon. Friend the Member for Gordon (Alex Salmond) said some time ago:
“The rocks will melt with the sun before”
the SNP imposes tuition fees on Scotland’s students.
There is little good news for young people. Whether someone is young and looking to start a journey towards eventual retirement or is nearing retirement, there is much to fear from this Government. Given the injustices for many women, the UK residents living in many overseas countries suffering from frozen pensions, or the constant tinkering with pensions that undermines saving, there is little for which to commend this Government. The Government are playing a risky game on pensions; the new lifetime ISA muddies the waters in an already complex area. ISA savings from taxed income undercut the pension saving from pre-tax income—in other words, the Chancellor has found a convenient tool to increase tax receipts today, but that is not necessarily good news for individual savers. According to the Association of British Insurers, presented with a choice, no employee will be better off saving into a lifetime ISA than a workplace pension because of the loss of employer contributions. ABI calculations indicate that the long-term cost of forgoing employer contributions would be substantial—for a basic-rate taxpayer, the impact would be savings of roughly one third less by the age of 60.