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Ms Armstrong: I wonder whether my hon. Friend would like to ask the Minister whether he will publish the comments that were received from the six companies, so that we are able to judge precisely the effect that they have on the subsequent contract.
Mr. Milburn: My hon. Friend's idea is welcome, and extremely sensible. If the Minister were prepared to accept it, it would help to dispel some of the doubts. I hope that, if the Minister has an opportunity to catch your eye again, Mr. Deputy Speaker, he will answer the question asked by my hon. Friend.
However, I now reach the crucial issue. We have heard much about value for money for the taxpayer. We have heard that the people who currently run the agency, and who, the Minister acknowledges, do so successfully, have been denied the right to bid against the private sector for that work. How is it possible to compare like with like, when the people who currently run the scheme are not allowed to bid? The result of excluding the staff from bidding is that the taxpayer is denied a fair comparison between what the private and public sectors can deliver.
Finally, the TSS is a complex scheme, which relies for its success on the scale and expertise of the agency's staff, and the faith of its customers in their integrity and impartiality. Handing the scheme over to untried but commercially interested private sector organisations risks losing both. In my opinion, it is a risk not worth taking.
Mr. Don Foster (Bath):
Recent Government legislation in respect of pension schemes has attempted to increase the power that is given to pensioners and deferred pensioners. Therefore it is perfectly appropriate, in a debate such as this, that we, in deciding which way to vote, take special notice of the opinions of those people who are the customers of the Teachers Pensions Agency. I am sure that many hon. Members have received as much correspondence about that issue as I have. The overwhelming majority of the people who have written to me have expressed considerable anxiety about the proposals that we are debating.
I hold very much to the view, "If something ain't broke, don't fix it," yet the Government are attempting to meddle with something that definitely is not broken. Indeed, Sir Peter Levene, the Government's adviser on privatisation issues, recently said that if a private sector company achieved 85 per cent. of its objectives, it was performing excellently. As the hon. Member for Darlington (Mr. Milburn) said, the TPA is already achieving all its targets and is outstripping its objectives by more than 95 per cent. Indeed, the Teachers Pensions Agency, set up, as
Members will recall, as long ago as 1992, has met and/or exceeded all the efficiency targets set for it by Government.
Several hon. Members have mentioned the report produced by the consultants KPMG, and some have said that that report suggested that it might be possible to make savings of approximately 20 per cent. However, that report, as those who have read it will testify, gives no evidence to support that view except unsubstantiated claims made on behalf of the various private companies that have been consulted, many of which may be involved in the process of attempting to take over the administration of the scheme. Incidentally, it seems a little unwise to be considering administrative changes at the very time when the TPA will be dealing with numerous requests from part-time teachers for retrospective membership of the scheme.
I said at the beginning of my speech that we should take account of the users of the scheme. Indeed, as the hon. Member for Darlington said, we should take much more note than the Government are of all those-- including users of the scheme--who were consulted about the proposals. As we know, 131 organisations were consulted, 128 of which refused to support the privatisation; more than 100 directly opposed it. Only three organisations supported it, one of which--as has been pointed out--was a potential bidder for the contract. Moreover, teachers' organisations are unanimous in their opposition to the move. They do not want the scheme to be run for profit by a private contractor. It is also opposed by employers, teachers, civil service trade unions and-- importantly--the staff of the TPA.
As we know, in 1990, the Department rejected the notion of letting a contract for the administration of the scheme--no doubt sharing the view that the TPA could make all the improvements that a private sector contractor could make. The whole consultation has been a sham. I noted that, from a sedentary position, the Minister denied a suggestion that he is to meet teachers' representatives in three days' time to consult on the plan; perhaps he would like to confirm that.
Mr. Robin Squire:
Let me tell the House--for purposes of clarification alone--that we are discussing an enabling order. I have already made it clear that any decision is still months away, and during that time I want to continue to meet staff members. In that context, I look forward to the meeting to which the hon. Gentleman has referred.
Mr. Foster:
Surely that illustrates the concern that many of us feel. Yet again, the Minister has openly admitted that this is enabling legislation--when the Government have not the foggiest idea what the details of their proposals will be. The Minister is seeking the House's permission to go ahead and develop the scheme with a blank cheque, and--as he admits--he still has not engaged in detailed consultation even with the representatives of teachers, who are those most likely to be affected.
The Government's White Paper "The Civil Service: Taking Forward Continuity and Change" stated categorically that there should be a five-year period between reviews after the creation of an agency. As hon. Members will recall, the agency was created in 1992, only three years ago. That is yet another example of rapid changes in Government thinking.
Many who have expressed concern about the proposal have done so because they believe that management in the private sector will create a number of risks. Many are anxious about, for example, the possible loss of an independent and impartial role. The Minister may wish to confirm, or otherwise, that the TPA currently has powers to determine whether members of the scheme should receive benefits in certain defined circumstances, such as ill health, and how much they should receive in those circumstances. If the agency indeed has those discretionary powers, there is a danger that a contractor may decide to say no simply because an increase in the amount of work would result, reducing the profit.
It is also feared that the work involved in letting the contract would be expensive, and that transferring administration of the scheme to the private sector would lead to a loss of continuity and experience. Many people are concerned about their ability to seek redress in the event of poor service or maladministration. The Minister has said that it will be possible to appeal to the Secretary of State or to go to the pensions ombudsman. I hope that the Minister will respond to an earlier query about whether inquiries made to the pensions ombudsman and the handling of such inquiries will be made public.
People are also concerned about the possible mis-selling of personal pensions. I acknowledge that, in his letter to all hon. Members, the Minister gives an assurance that the Government will not let that happen. However, I hope that the Minister will give greater comfort to those who are worried by explaining how he would prevent mis-selling and what action he would take if the firm, its agents or subcontractors attempted to use the database of TPA members as the basis for selling on various personal services, including personal pension plans.
Other hon. Members have questioned whether the 20 per cent. saving that the consultants allege may be possible in a five to seven-year period will be delivered. There is no clear evidence in the KPMG report that it will. Perhaps the House should recall that the TPA has plans to cut its own costs by 7.5 per cent. each year for the next three years. In three years--not five or seven years--that would result in the savings that the KPMG report envisages.
Mr. Squire:
There is no argument between the hon. Gentleman and me on that point. He has my assurance that we are anticipating savings over and above those that are built in.
Mr. Foster:
I am very glad to hear it, because we can then go a step further. Those working for the TPA have made it absolutely clear that, if the Department were to give them the financial support to enable them to introduce the level of information technology equipment that undoubtedly will be used by the private contractors, they, too, could make or better the savings that are envisaged by the private sector.
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