| Previous Section | Index | Home Page |
Mr. Robin Squire: The hon. Gentleman will find that the answer to his question will be published in either today's or the next day's Hansard. The answer is too complex for me to give him chapter and verse now, although it is not germane to his central issue, which seems to be that, if there has been any private sector involvement and it has gone wrong or has not performed, that of itself eliminates any possibility of considering private sector partnerships anywhere else.
Mr. Kilfoyle: Far from it. I do not suggest that the one naturally follows from the other. What I am saying is that the experience of the agency with the private sector leaves a lot to be desired. It is not merely a question of what happened with Hoskyn's, which subcontracted to an organisation known as UPSI the attempts to update information technology at the TPA. There have been similar, well-documented problems involving the Prudential insurance company, which was contracted to administer the additional voluntary contributions scheme on behalf of the teachers superannuation scheme. That too has been a failure. I am trying to point out that there is no room for confidence in the Minister's assertions that the introduction of IT in itself will necessarily benefit the scheme envisaged.
I also want the Minister to consider the fact that there are nine miles of manual files in the Darlington headquarters. What analysis has he made of the cost of computerising that hoard of information, and how does it accord with his view of increased efficiency and the savings envisaged and, incidentally, the promise in the letter of 10 November, which he read out in lieu of a speech and which was sent to hon. Members on both sides of the House? He said that he is
Will the Minister guarantee that those firms will be able to deliver what KPMG promises? Somehow, I doubt it. Both the KPMG report and the now famous letter to Members of Parliament of 10 November suggest that the promise is a combination of vague assumptions and terminological inexactitude, which give a totally misleading impression of what is possible in terms of computerising the system overnight without any disruption to the TPA.
In fairness--the consultants were given a very limited brief within which to operate--KPMG listed a series of obstacles to the privatisation proposals. From the Government's perspective, the statutory constraints are the easiest to deal with. That is why they have produced these proposals, using the Deregulation and Contracting Out Act 1994 to supersede the Superannuation Act 1972. However, the House will need to be convinced about the other four areas of concern that KPMG pinpointed. The first was the
KPMG and, presumably, the Government are convinced that there is not
Mr. Squire:
I do not need to comment on the hon. Gentleman's last rhetorical question, but would he claim that every public sector action, local government or national, has invariably been carried out without any fraud or misfeasance?
Mr. Kilfoyle:
The question at issue is whether the proposal before the House will do anything to enhance the teachers superannuation scheme. The fact is that it will not. That is the considered view of the 128 organisations out of 131 that refused to endorse the original proposal.
The KPMG report puts across strongly the idea that the proper use of the database of teachers' records is sacrosanct under the Data Protection Act 1984 and the Financial Services Act 1986. Like the Minister in his view on private sector companies coming into the public arena, I have my own area of naivety, and I must confess that this is it. I would love the Minister to enlighten me as to whether those nine miles of manual records are covered under the Data Protection Act 1984. I understand that manual records are not covered; only material kept on computer is covered.
The third concern, even to KPMG, is the potential risk of failure. One option postulated in the report is that there might, in such circumstances, be a smooth transfer to a new operator. The other option is to revert to the control of the Department for Education and Employment. From that, KPMG tautologically declares that such a provision would do nothing to deter prospective bidders, as they would bid only on the expectation of succeeding.
That is absolutely true. Presumably that is why the confidential pre-tendering discussions took place with the anointed six companies. They cannot lose. They set out their terms in private, set the parameters for tendering with the Government and know that if all else fails, the legislation will ensure that someone else--presumably the Government, or rather, the taxpayer--will pick up the tab if they get it wrong. That will all be at the expense of members of the scheme.
Mr. Kilfoyle:
I am willing to allow the Minister to intervene to explain why it will not. If the scheme fails, who picks up the tab? That question must be answered.
KPMG discounts the chances of large numbers of members opting out of the teachers superannuation scheme. Indeed, in the magic letter of 10 November, the Minister said:
What about the experience of many teachers who have gone into personal pension plans? As the Minister will know, some 8,000 have opted to go back into the scheme because it is so successful. How will the Government guarantee that such second parties will not be able to circumvent the Government's intentions? I do not believe that they can.
We oppose the proposal on the following grounds. It has not been subject to a comprehensive review. Only one option, that of privatisation, has been considered. Both preservation of the status quo and reversion to the DFEE have been ignored. I do not say that they are preferred options, but to have a comprehensive review, all the options must be examined--not just one.
Secondly, the proposal will lead to job losses in Darlington. The people of Darlington and my hon. Friend the Member for Darlington (Mr. Milburn) are in no doubt about that, because only through the shedding of jobs can the putative savings be made. There is no other way in
which it can be done. The proposal ignores the cost-effectiveness of the scheme as it now operates, even given the Government's own criteria for successful appraisal. By their standards, the scheme is successful, yet they still want to dismantle parts of it.
The Government's proposal would put a huge and successful scheme on the slippery slope to total privatisation, far beyond that of its administration alone. I do not believe that this is the end game; it is the start of opening up the scheme as a whole to privatisation. I accept that the Minister has said differently. I shall wait and see what eventuates if the Government have their way. The one fortunate thing is that we expect to be in government before that day comes.
Mr. Alan Milburn (Darlington):
As the House will be aware, the teachers superannuation scheme is run from Darlington by the Teachers Pensions Agency. Therefore, much that I have to say will reflect concerns not only of agency staff but of the whole community in the town.
The Minister is well aware of my concerns, as I have met him and his officials on a number of occasions to voice them. I am grateful to him for the time and trouble that he has always taken. I am also grateful for the support that I have had from my hon. Friends the Members for Liverpool, Walton (Mr. Kilfoyle) and for North-West Durham (Ms Armstrong), and my right hon. Friend the Member for Bishop Auckland (Mr. Foster).
As the Minister is aware, the 375 civil servants who work at the agency in Darlington have faced months of what I can describe only as demoralising uncertainty as they contemplate the potential impact of the handing over of their work to the private sector. It is right at the outset that we should dispose of one issue immediately. What the Minister politely calls contractorisation is in fact privatisation. That is so for a simple reason: virtually all the work of the Teachers Pensions Agency is to do with the administration of the teachers superannuation scheme. Let us not beat about the bush: we are debating privatisation this evening. That is what is before us.
Staff in Darlington are concerned that their jobs will go the way of countless thousands of other jobs, most notably in the privatised utilities, whose workers know what privatisation means for employment; 160,000 workers have lost their jobs since the former public utilities were privatised. If that were to happen to the Teachers Pensions Agency in Darlington, the effects would be serious indeed.
"absolutely committed to ensuring that the Scheme continues to operate smoothly and without interruption".
Despite the Hoskyn's failure, according to KPMG--the Government's consultants--
"all of the firms interviewed saw substantial scope to introduce improved IT systems".
"quasi-monopoly position of the TPA"--
a certain red rag to this bull of a Government, I am sure, unless the monopoly is a privatised one. KPMG argued that the contributors
"need protection against unacceptably low standards of service".
We have heard from the Minister and other hon. Members that the service is of a very high quality. Where are those low standards of service? If the thing is not broken, why do we need to mend it? The Minister must answer that.
"any category of private sector contractor which would be obviously unacceptable".
That is a naive view. Frankly, such a claim from the Government is risible. Are we to believe that the private sector is jam-packed only with models of probity and fair play? Have the Government learnt nothing from past experience of what happens when some of these sharks from the City involve themselves?
"We would not allow the contractor to advise teachers whether to join or leave the scheme."
I accept his word on that, but what of the contractor's agents or the position of consultants who perhaps deal with a contractor who does deal in personal pension plans?
| Next Section
| Index | Home Page |