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9.22 pm
Dr. Robert Spink (Castle Point): While we have heard some interesting speeches by Opposition Members, I believe that they have represented the vested interest rather than the public interest in this matter. Their accounts of the Government's proposals have been tendentious and I do not think that they have reflected properly the Government's actions and proposals, which make a lot of sense to me.
Something must be said in support of the teachers, who work very hard with great dedication and care. By and large, they are motivated by vocation rather than by money. Therefore, they deserve a good, well-administered pension scheme, and in that regard, they have nothing to fear from the Government's proposals.
Labour Members have not yet recognised the great benefits that privatisation has brought to this country in the past two decades. Many industries that used to cost the taxpayer many millions of pounds--£50 million per week is an often-quoted figure--now deliver great benefits. They pay corporation tax and they deliver better services to their customers.
Mr. Kilfoyle:
Has the hon. Gentleman read the KPMG report, and if he has, what did he think of its detailed conclusions?
Dr. Spink:
I am grateful to the hon. Gentleman for bringing me back to my speech. I shall demonstrate to him that I know what the KPMG report revealed.
The Government invited six private sector companies to tender for a contract to administer the teachers superannuation scheme in England and Wales. Those tenders were invited because the Government considered that letting a contract would provide better value for money than retaining the administration of the scheme within the public sector. The Government have tried and tested that philosophy and it has been proved for almost two decades.
All six companies have declared that they would seek a fee for administering the scheme that is lower than the expected costs of the Teachers Pensions Agency, which currently administers the scheme, so there are real benefits for the taxpayers. Last year, the TPA's running costs were more than £15 million--not an insignificant sum. We owe it to the taxpayer to find out whether we can make savings and if we can, we should do so, but we must be satisfied that a private sector company will deliver better value for money than the TPA. I am happy with the comfort that the Minister has given the House on that point.
Any contract would concern only the administration of the scheme; the scheme itself would remain in the public sector on its current statutory basis. The Secretary of State would remain responsible to Parliament for the scheme and would continue to be advised by his civil servants. Letting a contract would not affect the size or safety of the teachers pension in any way. As we have heard from the Minister tonight, the scheme does not have a real pension fund. Instead, payments are made to and from the Exchequer.
When he replies to the debate, can my hon. Friend confirm that any contract would require a standard of service and performance at least as high as that currently provided by the TPA? Will he undertake to monitor the contractor's performance to ensure that?
Will my hon. Friend also confirm that he is absolutely committed to ensuring that the scheme continues to operate smoothly without interruption and that the contractor would not be allowed to advise teachers whether to join or to leave the scheme, so that the problems that arose with the mis-selling of personal pensions could not occur? We heard the misgivings of the hon. Member for Bath (Mr. Foster) on that matter and I am sure that my hon. Friend will want to give us some comfort.
Will my hon. Friend give us some guarantees about the use and protection of data within the scheme? I am pleased that all six companies have declared that they will keep data confidential and I am sure that that will be the case, but we still require some guarantees. I seek some assurances that a contractor must have effective arrangements in place to deal with any complaints about the administration of the scheme. We know that there are no plans to allow a contractor to impose new charges on members of the scheme or employees and I am grateful to my hon. Friend for that.
Mr. Edward O'Hara (Knowsley, South):
The debate shows the enormity of the power that a Minister can take unto himself under the Deregulation and Contracting Out Act 1994. It is shown in the sheer scale of the function that the Government propose to privatise--and I use that word deliberately.
The teachers superannuation fund is one of the biggest such funds, with 1.25 million participants. The public will note that the Government are contracting out that enormous scheme without primary legislation and with inadequate consultation and review. Not least, that will be noted by the 1.25 million teachers and retired teachers who have a direct interest in the matter. I declare my interest as a lifelong member of the Association of Teachers and Lecturers. I have a pension under the teachers superannuation scheme.
The issue was first raised in February and there was some correspondence at the time, but it has become more prominent recently because people have begun to realise that the Government have come to the end of their charade of consultation. I visited schools in my constituency and canvassed teachers--the people most affected by the proposal. The reaction was one of anger at the principle of the proposal and at the lack of consultation.
I received a letter from a teacher in a school in the constituency of Knowsley, North. The school will be coming into my constituency under the boundary review
and at one time I was chairman of the board of governors. I know the teacher, Marjorie Sumner, well. She teaches at the Prescot county primary school and is one of the unsung heroines of the teaching profession--a dedicated and good teacher who has spent 30 years in her locality.
Mrs. Sumner wrote to me today saying:
I have some questions for the Minister, some of which have already been raised by my hon. Friends. Cost-effectiveness does not equal efficiency, as has been proved with compulsory competitive tendering in local authorities. What about the cost savings that could be available to the present Teachers Pensions Agency through the introduction of information technology? What about the costs of contracting out in relation to redundancy payments? We can be sure that there will be redundancies and they come at a heavy cost. What about the costs of the scheme in future years?
Once the scheme is contracted out and the facilities taken over, the position will be similar to that in local councils when the refuse collection service was taken over. If the Government are not satisfied with the service at any time in the future, they will not have the core facility available to enable them to take it back. As we have seen with other privatisations, once the tender is let, the negotiating hand is with those who hold the tenders because they have the resources to carry out the function.
What we have here is a short-term ledger benefit. It is probably an illusory benefit when we take into account the start-up costs of the scheme in terms of redundancies, write-downs and, if the facilities at Darlington are not taken over, the drag on resources to maintain the facilities. There are long-term costs in terms of efficiency and in the loss of jobs to the Darlington area.
"I am writing to you, as you are my Member of Parliament"--
she lives in my constituency--
"to express my opposition to The Governments proposed Privatisation of the Teachers' Pension Scheme.
I have taught for my local L.E.A. for over thirty years, paying into a Superannuation Scheme, without option, on the understanding that my teachers retirement pension would be secure.
Having devoted myself to the teaching profession for all my working life I have implemented the National Curriculum with enthusiasm and expertise spending many hours discussing, preparing and presenting resources for colleagues.
As the Government did not think things"--
the national curriculum--
"through, a great deal of time, work, effort and money have been totally wasted and I now feel very let down by The Government once again by them proposing a drastic change in the administration of the Teachers' Superannuation.
I feel I must voice my objection to the lack of consultation and liaison with Teachers."
Marjorie Sumner is by no means a political activist; she is not militant in any way. She is a rank-and-file teacher, moved to anger and disgust by the Government's proposal.
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