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Business of the House

12.30 pm

Ms Angela Eagle (Wallasey) (Lab): Will the Leader of the House give us the business for next week?

The Leader of the House of Commons (Sir George Young): The business for the week commencing 12 December will be:

Monday 12 December—General debate on immigration. In addition, my right hon. Friend the Prime Minister plans to make a statement on the EU Council.

Tuesday 13 December—Motion to approve the chairman of the Statistics Board, followed by proceedings on the Charities Bill [Lords], followed by motion to approve a statutory instrument relating to financial restrictions (Iran), followed by Opposition day [un-allotted day] [half-day]. There will be a debate relating to Europe. This debate will arise on a Democratic Unionist party motion.

Wednesday 14 December—Motions on Standing Orders relating to ways and means and supply, followed by motions relating to scrutiny of draft orders under the Public Bodies Bill [Lords], followed by Opposition day [un-allotted day] [half-day]. There will be a debate on an Opposition motion. Subject to be announced.

Thursday 15 December—Motion relating to the recommendations of the Members’ Expenses Committee report on the operation of the Parliamentary Standards Act 2009, followed by, motion relating to financial education. The subjects for these debates were nominated by the Backbench Business Committee.

The provisional business for the week commencing 19 December will include:

Monday 19 December—General debate on apprenticeships.

Tuesday 20 December—Pre-recess Adjournment debate. The format will be specified by the Backbench Business Committee.

Colleagues will also wish to be reminded that the House will meet at 11.30 am on 20 December.

I should also like to inform the House that the business in Westminster Hall for 15 December 2011 will be:

Thursday 15 December—Debate on Remploy.

Ms Eagle: We have all been captivated this week by the images of the arrival of two giant pandas at Edinburgh zoo. Is the Leader of the House alarmed to realise that there are now more giant pandas in Scotland than there are Conservative MPs? Before the Deputy Leader of the House gets too comfortable, let me say that, given his party’s poll ratings in Scotland, it looks like its MPs are going to be joining the endangered species list north of the border as well.

In 20 years in this place, I have never known business statements to contain so little legislative substance, especially so early in a Parliament. There has been little even resembling Government legislation in this place for weeks now. Will the Leader of the House explain why the Commons is twiddling its thumbs while the Lords teeters under the weight of badly drafted, highly controversial and ill-thought-out legislation? Was this part of the plan? Before he blames the Opposition, the snow or the royal wedding, analysis shows that thousands of Government amendments and endless Liberal Democrat

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speeches are causing the logjam in the Lords. Why is the Government’s legislative programme so out of balance and why can they not manage it better?

Talking about incompetence, on Tuesday the Government lost their first vote in the House of Commons amid chaotic scenes as panic-stricken Government Whips first dragged their MPs out of the Aye Lobby and then shoved them back in again. By the time the doors were locked, Hansard shows fewer than a quarter of Government MPs were actually in the Lobby with just three Cabinet Ministers for company. I have to say that neither the Leader of the House nor his Deputy were among them. Thankfully for the Leader of the House, neither was the Chief Whip.

I understand that when this defeat was announced, the cheers from the Carlton Club were even louder than those from Opposition Benches. What an ominous sign for the Prime Minister on his way to Brussels. Whether the Leader of the House likes it or not, this place has expressed a clear view by a majority of 134 that we require more time to debate this Government’s failing economic policy. Will the right hon. Gentleman now honour the clearly expressed wishes of this House, by scheduling further Government time for debate on the economy in the very near future?

This week, the Deputy Prime Minister vowed to go into the next election with a plan to means-test free bus passes and TV licences for millions of pensioners. Is that what his newly appointed “brand advisers” meant when they told him to act more like Oxfam? Some 9 million pensioners now want us to have a debate on whether this is Government policy. Will the Leader of the House oblige?

On Tuesday, a former Conservative Member of this House was caught on camera boasting of his access and influence at the heart of Downing street. This follows the still unanswered questions on the Werritty affair. In Opposition, the Prime Minister said that lobbying was the

“next big scandal waiting to happen.”

The Minister responsible gave a firm promise to the House that there would be a consultation document on the regulation of the lobbying industry by the end of November. Given that it is now December and next week is the last full parliamentary week before the recess, will the Leader of the House confirm that the promised consultation paper will be published next week?

Tory divisions on Europe have exploded into the open. The Prime Minister got a Euro-mauling from his own Back Benchers yesterday and the Eurosceptics are out on manoeuvres. Meanwhile, Cabinet Members are openly at war: the Work and Pensions Secretary is reportedly issuing threats over the phone; the Northern Ireland Secretary has taken to the airwaves demanding a referendum and the leader in waiting at City Hall is madly stirring the pot.

We have a Tory grass-roots rebellion, a Cabinet divided and a Prime Minister isolated. Will the Leader of the House inform us what is different from the last Tory Government that he served in?

Sir George Young: My party plans to overtake the population of pandas before the next election—[Interruption.] At the next election. In view of the fertility of pandas, that may not be a very high hurdle, but we do plan to do better than them.

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As for the House twiddling its thumbs, I think that the hon. Lady demeans the debates that I have announced in the forthcoming week. There is a debate on Europe. What can be more topical than that? There is the Opposition-day debate. Are they going to choose something that is of no consequence? I am amazed that she has repeated the accusation that we heard last week. The fact is we have managed the business in the House of Commons much better than the outgoing Government. We have managed to scrutinise the Government’s legislative programme with adequate time. That programme is now in another place and we will deal with the Lords amendments in due course.

I am amazed that the hon. Lady raised the issue of the debate and vote on Tuesday. We provided a debate in Government time after the autumn statement. That is something that the previous Labour Government did not always do. We had the pre-Budget report, and we did not always get a debate in Government time. Having provided a debate in Government time, the Labour party then brought it to a premature conclusion by moving that it should stop before we reached 10 o’clock. It then complained that we did not have enough time to debate the motion. A number of Labour MPs who took part in the debate then solemnly went through the Division Lobbies to assert that they had done no such thing; that they had not considered the economy. At a time when we are trying to reconnect the House of Commons with the public, I wonder whether the sort of antics that the Labour party got up to on Tuesday really advanced our cause.

On benefits for pensioners, if the hon. Lady looks at the coalition agreement, she will see clear commitments on benefits to pensioners on bus passes and other issues and that remains the policy of the coalition Government.

I am amazed that the hon. Lady chose to raise the subject of lobbying. For 13 years, the Labour Government did nothing about lobbying. They ignored the recommendations of the Public Administration Select Committee, which reported in 2009. By contrast, we are actually doing something about lobbying. We will produce our consultation paper within the next few weeks, proposing a statutory register of lobbyists, which is something that the Labour Government consistently failed to do. On the question of boasting, I have to say that in the previous Parliament, there were ex-Labour Ministers who were boasting, while they were still Members of Parliament, of the influence that they had on Government.

Finally, on Europe, I gently remind the hon. Lady that when we had the vote on the referendum, her party was split as were all three parties. On the Government Benches, we are delighted that the person representing this country in Europe today and tomorrow is the Prime Minister and not the Leader of the Opposition.

Anna Soubry (Broxtowe) (Con): I do not wish to fall out with Labour Members who represent Leicester constituencies but it is a long-standing fact that the queen of the east midlands is Nottingham.

There was good news today for the city of Nottingham, and that is good news for my constituency, which forms part of Greater Nottingham. Will the Leader of the House be so good as to find time for us to discuss cities and today’s good news for all the core cities?

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Sir George Young: I am grateful to my hon. Friend. Having listened to the exchange just now, I know that the announcement and the enfranchisement of local government were welcomed on both sides of the House. I cannot promise an early debate on the cities and I do not want to get drawn into the question of which is the principal city in the east midlands. There will be an opportunity to discuss this matter, however, on Tuesday week, during the pre-recess Adjournment debate, or she might like to apply for a debate in Westminster Hall. Furthermore, there will be the normal debate on the revenue support grant early in the new year.

Natascha Engel (North East Derbyshire) (Lab): I apologise in advance for not being able to stay for the whole of business questions today.

I would like to offer the Leader of the House the help of the Backbench Business Committee between now and such time as the Government’s legislation comes back from the House of Lords: we would be only too delighted to take responsibility for scheduling all debates on the Floor of the House between now and then. I hope that he will take us up on that generous offer. I also hope that he does not mind if I take this opportunity to make another public service announcement: hon. Members have until 6 pm on Monday to put in for the pre-recess Adjournment debate ballot.

Sir George Young: We are grateful for the public service announcement. On the hon. Lady’s generous offer to replace me as Leader of the House, I gently point out to her that I have announced six days’ business in the next two weeks, three of which are Opposition days or Backbench Business days. I do not think that she will find a more generous offer in the history of Parliament.

Mr Matthew Offord (Hendon) (Con): Will the Leader of the House consider having a debate on payday loans? It is an area of the financial sector that has not had that much coverage, but yesterday’s report showed that one in six people cannot afford to pay off the principal that they borrow. It seems that this area of the financial sector is acting in a fashion that is little more than loan sharking, particularly given that it preys on the financially vulnerable in our constituencies.

Sir George Young: I am grateful to my hon. Friend for reminding the House of the report published yesterday. The Government are concerned about the impact of these high interest rates on the day-to-day life of those on low incomes. He might know that this issue was raised during a debate on 1 December in Westminster Hall. The Government have just commissioned research from Bristol university to find out what the consequences would be of introducing a cap on the interest rates. I hope that that will be available and published in the summer and that it will inform the debate. In the meantime, I urge people to think twice before taking on high-interest loans and to contact the free money advice service, possibly through their citizens advice bureau, or to visit their local credit union, which might be able to help on better terms.

Sir Gerald Kaufman (Manchester, Gorton) (Lab): Has the right hon. Gentleman seen early-day motion 2506, which stands in my name and those of other hon.

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Members, and deals with the antisocial property speculation in my constituency of Mr R. Street of Woodhouses, Manchester and Associated British Foods, which for eight years have kept derelict a site among which large numbers of my constituents live.

[That this House expresses its disgust with Mr R. Street of Woodhouses, Manchester, landowner and Associated British Foods PLC, head lessee, whose avarice and lack of concern mean that land at the junction of Wellington Street and Cross Lane, Gorton, Manchester, remains a derelict eyesore, as it has been now for eight years, when community development is urgently required on this site; notes with anger and concern that large numbers of local residents in this heavily populated area have had to put up with this unacceptable situation for so long; calls on these greedy property-speculators to give up the land without delay so that it can be developed for community use; and further calls on the Secretary of State for Communities and Local Government and Manchester City Council to take all possible action to get these anti-social people to behave decently.]

It is a total disgrace that because of the greed and cupidity of these property speculators my constituents should have to put up with this. Will the Leader of the House refer the matter to the Secretary of State for Communities and Local Government so that these people can be told that they cannot go on like this anymore?

Sir George Young: I am grateful to the right hon. Gentleman. I have now seen early-day motion 2506, and I understand why he and his constituents feel strongly about the site. I note that at the end of the motion he calls on Manchester city council, as well as my right hon. Friend, to take all possible action, and presumably compulsory purchase order powers are available if desired. However, I shall do as he has suggested and bring the matter to the attention of my right hon. Friend.

Simon Hart (Carmarthen West and South Pembrokeshire) (Con): May we have a debate on the Freedom of Information Act? In my area, public bodies have been asked a range of questions, including on witches, werewolves, wizards, ghosts, vampires, zombies and demons. Even the star signs of local car thieves and the chief constable’s lottery choices have been asked for. It is a waste of time and money, and may we review it?

Sir George Young: I understand my hon. Friend’s concern. The Government announced in January that they would review the FOI legislation. We are about to submit our evidence to the Justice Committee as part of the post-legislative scrutiny, and that scrutiny will touch on the issues that he has just mentioned—the costs imposed on those who have to respond to these requests. I hope very much that the Committee, once it has received our review of the FOI Act, can take the matter forward. Of course, we will be interested in any recommendations that it might make on changes to the legislation.

Gloria De Piero (Ashfield) (Lab): May we have a debate in Government time on the national lottery provider, Camelot, with a view to securing a constituency breakdown of where tickets are purchased, not just where lottery money is spent?

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Sir George Young: I understand that there will be an opportunity to ask that question of Ministers in the Department for Culture, Media and Sport on 15 December. I also understand that the hon. Lady represents her party on the Front Bench so she is well placed to ask that question. I shall convey the question to my right hon. Friend the Secretary of State and see whether we can get the information—I am pretty sure that it has been asked for before—on the relationship between the areas that buy the tickets and those that get the lottery investment. I shall do what I can to secure that information.

Philip Davies (Shipley) (Con): May we have a debate on penalties for swearing at police officers? The excellent new Metropolitan Police Commissioner, Bernard Hogan-Howe, has said that people should be properly punished for swearing at police officers, whereas the rather ridiculous Mr Justice Bean has recently quashed the conviction against somebody who swore at a police officer, saying that it was the kind of thing that they should expect. Given the widespread concern about the lack of respect in society, surely people should not be able to swear at police officers without punishment. A debate in the House could decide the will of the House.

Sir George Young: I understand my hon. Friend’s concern. Having been on the police parliamentary scheme, which I am sure that many other hon. Members have been on, I understand the frustration that policemen experience when they are subject to abuse. My recollection is that it is not an offence, as such, to swear at a policeman, but that if, after someone has been warned, they carry on, they are liable to be arrested. However, I am not a lawyer and I shall get an authoritative response from the Lord Chancellor, which will be conveyed to my hon. Friend.

Mrs Anne McGuire (Stirling) (Lab): A couple of days ago, the renewables obligation banding review impact assessment was published by the Department of Energy and Climate Change. Unfortunately, in spite of meetings with officials and at ministerial level, the impact assessment has failed to address some of the issues relating to the wood and forestry industry in the United Kingdom, not least the impact on 150,000 jobs across some of the most rural parts of the UK. Given that the Leader of the House has so much time to be generous with, will he allow a debate in Government time on this important industry?

Sir George Young: I understand the right hon. Lady’s concern, and I understand that the issue was raised—although perhaps not in precisely the form in which she expressed it—at DECC questions recently. I will share her concern with my right hon. Friend the Energy Secretary and see whether we can get a response on the impact assessment.

Andrew Selous (South West Bedfordshire) (Con): Many Government Members are passionate about the NHS, so may we please have a general debate on it, particularly given the recent problems at the Care Quality Commission and the variability in certain orthopaedic services?

Sir George Young: I am grateful to my hon. Friend. The Government would welcome a debate on the NHS, during which we could explain the reforms that we are

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introducing to improve it and the extra resources that we are investing. I cannot promise a debate, but at some point the Health and Social Care Bill, which is in another place, will return to this place, and then there might be an opportunity for the sort of exchange to which he refers.

Diana Johnson (Kingston upon Hull North) (Lab): Given that the Government are in disarray over their legislative programme, do we not have an opportunity to have some pre-legislative scrutiny so that we do not end up in the position we found ourselves in with the Health and Social Care Bill, when it had to be paused?

Sir George Young: I do not know whether the hon. Lady remembers the previous Parliament, but in contrast to it the legislative programme in this Parliament is a model of order. She made a serious point about more legislation being introduced in draft. We will do that. I think that we plan to introduce nine draft Bills this Session, which is double the number at the beginning of the previous Session. It is the objective of the coalition Government to have more pre-legislative scrutiny and more Bills introduced in draft. We think that that leads to a better scrutiny process in the House of Commons.

Robert Halfon (Harlow) (Con): May we have a debate on the rights of children to proper and equal access to their grandparents? In a few moments, I and a number of other MPs will join the Grandparents Association—a charity based in Harlow—to take a petition to No. 10 Downing street calling for children to be given that right in law?

Sir George Young: I applaud the work of the Grandparents Association to achieve positive outcomes for grandchildren, and I hope that my hon. Friend will get a positive response to the petition that he is about to present. In the context of what the coalition Government are doing to strengthen the family, we of course want to see what more we can do to strengthen the rights of grandparents, particularly where there is family breakdown.

Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): I wonder whether the Leader of the House is aware of the growing concerns about the potential implications of changes to tax credits for couples who work only 16 hours in the week. Last week’s Westminster Hall debate on the issue was well attended, and it was clear that many more Members wished to speak than could do so in the time available. Will the Leader of the House therefore consider allocating some time during Government business to consider the issue and allow the Economic Secretary to the Treasury to give fuller responses than she was able to give in that debate?

Sir George Young: I understand the hon. Lady’s concern. She will know that the Welfare Reform Bill is in another place. It may be appropriate to raise such issues when the Bill returns to this House. However, I would point out that by next April the child tax credit will have risen by £390, so against a difficult background we have tried to help the sorts of families to whom she has referred.

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Tessa Munt (Wells) (LD): The Leader of the House will have noticed that the number of questions submitted by MPs to the Secretary of State for Environment, Food and Rural Affairs and the Secretary of State for Transport has risen to about the equivalent of those submitted to the main Departments, which give an hour’s worth of responses from Ministers, rather than three quarters of an hour. I wonder whether the Leader of the House will consider raising the time to an hour, to ensure that the farmers and everyone with transport problems in my constituency, including young people, will have a chance to hear some answers.

Sir George Young: I understand the point that my hon. Friend makes. I wonder whether she has been able to identify which Department might have less time, in order to accommodate the extra time for the Departments that she mentions.

Nick Smith (Blaenau Gwent) (Lab): Excel, a new car park operator in my constituency, has gridlocked my office with complaints. Shoppers, local traders and taxi drivers think that they have been unfairly hit by hefty penalty charges. We should consider a licensing system and an independent appeals service to improve car parking management. May we have a debate on driving up standards for car parking operators?

Sir George Young: I understand the hon. Gentleman’s concern. I think that legislation banning the clamping of cars on private property has gone through the House and will come into effect next year. I hope that that is a step in the direction that he wants, but I will raise his broader concerns with my right hon. Friend the Secretary of State for Transport.

Chris Heaton-Harris (Daventry) (Con): A total of 17 babies die every day in Great Britain, with 11 stillborn and the others dying within four weeks of birth. SANDS, the campaigning charity in this area, is currently holding an exhibition at the Oxo gallery to highlight the care available for parents who suffer this tragedy. I had a Westminster Hall debate on stillbirth about six months ago, and I have been trying hard to get a debate, in Westminster Hall or otherwise, on the certification of a stillbirth, which is a Home Office matter. May we have some Government time to discuss the issue?

Sir George Young: The Government are anxious to improve the perinatal mortality rates to which my hon. Friend has referred. I hope that the investment in midwives will help to bring that figure down. I will pursue his specific question about statistics with the Home Office, if that is the right Department, and see what can be done on that front. As he will have heard, there will also be an opportunity to debate the matter further in the pre-recess Christmas Adjournment debate.

Valerie Vaz (Walsall South) (Lab): May we have an urgent statement about why the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns) is privately telling the Care Quality Commission to press ahead with the takeover of the Human Fertilisation and Embryology Authority, while publicly saying that he is still consulting and considering options? Surely that is unreasonable, in a judicial review sense, and bad government.

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Sir George Young: It might be unreasonable if it were true. I would like to make some inquiries, but I assume that what my right hon. Friend says in public is what is the case.

Guto Bebb (Aberconwy) (Con): Many local authorities in Wales have accepted demands from trade unions not to dock the pay of striking workers until January or February. May we have a statement to ascertain the Government’s position on using taxpayers’ funds to provide unions with a “strike now, pay later” option?

Sir George Young: I understand my hon. Friend’s concern. So far as the Government are concerned, we have had no approach from the civil service trade unions to do what he describes, and we are not aware of a general approach from the public sector trade unions. However, I very much agree with what he has said, and if we were approached, we would say that it is not appropriate to pay people for work that they have not done at this or any other time of year.

Jim Sheridan (Paisley and Renfrewshire North) (Lab): May we have a debate on the double whammy that the music industry is imposing on small and medium-sized enterprises? Currently, both Phonographic Performance Ltd and the Performing Right Society are demanding significant amounts of money from small and medium-sized enterprises simply for playing the radio on premises that are accessible to the public. Will the Leader of the House raise the matter with the appropriate Minister, so that we can have some clarity about what powers such organisations have to demand such amounts from small and medium-sized enterprises?

Sir George Young: The Government are sympathetic. We want to deregulate, and the regime that the hon. Gentleman has described is the one that we inherited. There will be Department for Culture, Media and Sport questions in a week’s time, but if this is a Department for Business, Innovation and Skills issue—which it may well be—I will raise it with my right hon. Friend the Business Secretary. The hon. Gentleman might like to be here in a week, and I will ensure that whichever Minister answers his question is well primed.

Karen Bradley (Staffordshire Moorlands) (Con): Leek further education college in my constituency has been providing excellent skills-based training to young people for over 100 years. It is now in negotiations to become part of the university of Derby, so that, for the first time ever, both further and higher education will be available to young people in Staffordshire Moorlands. Will the Leader of the House find time for a debate on how we can help all young people with educational aspiration, including those in Leek?

Sir George Young: I welcome that initiative, which is to have on one campus the two institutions to which my hon. Friend has referred. We are trying to reform vocational education to ensure that there are high-quality alternatives to academic subjects, such as the ones that she has mentioned, and to remove all the perverse incentives to push pupils into lower-level qualifications that might not improve their employment prospects. I am delighted to hear of the initiative to which she has referred.

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Paul Flynn (Newport West) (Lab): A total of 179 gallant British soldiers died in Iraq as a result of a decision of this House that was based on a deception. Some 383 died in Helmand as a result of a decision that was based on the hope that not a shot would be fired. When can we debate early-day motion 2515, in order to discuss the dreadful threat of a potential war in Iran actually happening?

[That this House is alarmed that the UK is stumbling towards a war in Iran that would have dreadful, unforeseeable consequences; recalls that in the past the momentum of preparations for war has frequently led to major wars; and urges the Government to seek to reduce tension, pursue conflict resolution and cease war preparations.]

The current war of words might become a war of weapons.

Sir George Young: I understand the hon. Gentleman’s concern about those who lost their lives in conflict. We had a debate in Government time relatively recently on a range of countries that included Iran—I am not sure whether he was able to take part in that debate—so I cannot promise another early debate on the middle east and related areas. As I said earlier in response to another question, he may want to put in for the pre-Christmas recess Adjournment debate or apply for a debate in Westminster Hall.

Harriett Baldwin (West Worcestershire) (Con): May we have a debate in Government time about the state pension? In addition to the record cash increase announced this week, which I know pensioners have welcomed, the Government are proposing two other alternatives in their White Paper for reform of the state pension age, as the state pension is the foundation of the retirement income of 100% of our constituents.

Sir George Young: I would welcome such a debate. In the debate on Tuesday, a number of my hon. Friends drew the House’s attention to the generous pension increase next spring and reminded the House of the triple guarantee that we have introduced. My hon. Friend also trails the next development in pension policy, which I think will be warmly welcomed by pensioners in this country. My right hon. Friend the Secretary of State for Work and Pensions is taking that policy forward.

Jonathan Ashworth (Leicester South) (Lab): I could never fall out with the hon. Member for Broxtowe (Anna Soubry), even if she will not accept that Leicester is the superior city. May I ask the Leader of the House about the scheduling of economic debates? He knows, of course, that the Government lost a vote. When we have a Budget, we have four or five days of debate immediately afterwards, as well as on the day of the statement. May we have a similar arrangement for autumn statements, so that we have debate on the day and perhaps for the following one or two days?

Sir George Young: I do not know whether the hon. Gentleman has had time to read the recommendations of the Wright committee, but we have done exactly what it recommended—namely, to provide in Government time a debate after the autumn statement. I drew to the attention of the shadow Leader of the House the fact

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that that was not a practice that had been adopted by a previous Government when we had a debate on the pre-Budget report only in response to a Standing Order request from my right hon. Friend the Member for Tatton (Mr Osborne), now the Chancellor of the Exchequer.

Glyn Davies (Montgomeryshire) (Con): Yesterday an important report on atrial fibrillation was published. AF is a condition that, through lack of awareness, leads to a huge number of deaths and disability as a result of the much increased risk of strokes. Will the Leader of the House ensure that we have an opportunity to raise awareness of atrial fibrillation by having a debate on the Floor of the House?

Sir George Young: The Government are anxious to improve the diagnosis, detection and treatment of atrial fibrillation. Some work is going on at the moment to identify those at risk so that they can be helped at an earlier stage. We work closely with the Atrial Fibrillation Association and the Stroke Association on this issue. I will draw to the attention of the Secretary of State for Health my hon. Friend’s interest in this subject.

Christopher Pincher (Tamworth) (Con): Despite improvements, many 11-year-olds in Tamworth go into secondary school with a reading age of eight, which severely limits their learning opportunities. May we have a debate on innovations in education, particularly on vertical integration between primary and secondary schools, which is being examined in Tamworth and can help to identify the problems and encourage the aspirations of many young people?

Sir George Young: I am interested in what my hon. Friend says, and I assume his local education authority would be the appropriate body to approach about merging those two types of schools. I hope that my hon. Friend will take comfort from what we are doing with the academies programme, driving up standards and putting parents and teachers in power, and what we are doing with free schools, which I hope will improve the education of those children to whom he referred, who are leaving school without the qualifications they need.

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Alun Cairns (Vale of Glamorgan) (Con): The Government are investing heavily in improving broadband capacity, which can bring about some great innovations such as home working and flexible working that can enhance the work-life balance. May we have a debate on such issues to encourage as many private sector employers as possible, following on from Government initiatives, to enhance the work-life balance?

Sir George Young: I am grateful to my hon. Friend. The roll-out of broadband is a priority for this Government, and I know that BT is doing a lot of work in this area. I will share with my right hon. Friend the Secretary of State the particular point that my hon. Friend has made and will ask him to write to him.

Julian Smith (Skipton and Ripon) (Con): Local and regional newspapers are gutted that they cannot get accreditation for the Olympics. May we have a debate about how we open up the vast media centre at the Olympic site to newspapers from across our country?

Sir George Young: I understand my hon. Friend’s concern. There will be an opportunity to raise that issue at Culture, Media and Sport questions in a week’s time, and I will forewarn my right hon. Friend the Secretary of State that my hon. Friend is on the warpath on this issue.

Martin Vickers (Cleethorpes) (Con): Just as religious fundamentalism can be damaging to social cohesion, so can anti-religious fundamentalism as exhibited by the National Secular Society in its attempt to stop prayers before council meetings. Will the Leader of the House find time for a Government statement to ensure that councils remain free to have prayers where they so wish?

Sir George Young: I strongly believe in local democracy, and I think that the decision to which my hon. Friend refers—on how to conduct council meetings and whether there should be a prayer before them—is very much one that should be taken by local councils. I hope that they will follow the example of this House, which has a short moment of prayer before we re-engage in normal hostilities.

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Opposition Day

[Un-allotted Half Day]

Public Sector Pensions

Mr Speaker: I inform the House that I have not selected the amendment in the name of the Leader of the Opposition.

1.4 pm

Hywel Williams (Arfon) (PC): I beg to move,

That this House recognises and appreciates the valuable work done by public sector workers; believes that they should receive pensions which are affordable, sustainable and fair; further believes that the changes announced since June 2010 by the Government are primarily for the purposes of deficit reduction rather than a move to secure the long-term sustainability of public sector pensions; notes that these changes are unfair on public sector workers who will have to work longer, pay more and receive less in their pension when they retire; further notes the findings of the National Audit Office that the 2007-08 pensions re-negotiation changes will generate estimated savings of 14 per cent. by 2059-60 and the conclusions of the House of Commons Committee of Public Accounts’ Thirty-eighth Report of this Session on the Impact of the 2007-08 changes to public sector pensions (HC 833), that the cost of public service pensions has reduced substantially because of these changes; agrees with criticism in both reports of the failure to develop a long-term strategy for the role of pensions in recruitment and retention to the public sector; condemns the Government’s threat to cut devolved administrations’ budgets if they do not implement the Government’s immediate levy on pensions contributions; and calls on the Government to reverse its unfair changes to public sector pensions.

The motion stands in the names of my right hon. and hon. Friends from the Scottish National party and Plaid Cymru, and of Members from the Labour party and, I understand, from the Social Democratic and Labour party.

Last week, a day of action saw more than 2 million people across the UK join in protests against changes that will make those affected—mainly women—work longer, pay more and receive less when they retire. This year alone, bankers walked away with £7 billion in bonuses. As one constituent said to me last week:

“This is just a way of getting extra cash from public workers. And it is just not fair.”

We are proud to hold this debate on behalf of all those people across the UK who are directly or indirectly affected by the Government’s changes, and we note that despite having 36 Opposition day debates since the changes were announced in June 2010, the official Opposition have not seen fit to devote even one of those opportunities to debate the public sector pensions proposals. Whatever the evasions, the nods and the winks, and the ducking and diving of others, we are glad of the opportunity to show clearly where we stand.

The Parliamentary Under-Secretary of State for Scotland (David Mundell): This is characterised as a joint debate between Plaid Cymru and the Scottish National party, yet last week we saw SNP Members of the Scottish Parliament cross the picket lines to ensure that the Scottish Parliament functioned, while Plaid Cymru Members of the Welsh Assembly refused to cross picket lines and the Welsh Assembly did not function. Where is the coherent position in that?

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Hywel Williams: It has clearly escaped the right hon. Gentleman’s attention that the SNP are in government in Scotland, while in Wales—alas—we are not.

David Mundell: I am afraid that I do not find that a tenable explanation. All SNP Members of the Scottish Parliament are not in the Government, although they may act like it. Those people crossed the picket lines and spoke in a debate on this very subject.

Hywel Williams: Honestly, I think we need to move on to the subject of the debate. I am sure that the right hon. Gentleman will have time later to make those and other fatuous points.

Alun Cairns (Vale of Glamorgan) (Con): I would like to take the hon. Gentleman back to what he said a few moments ago and remind him that when Plaid Cymru was part of the coalition in the Welsh Assembly Government, its members refused to cross the picket lines at that time, too.

Hywel Williams: Well, honestly, I am sure that you would not want me to be diverted down this particular route, Madam Deputy Speaker.

Madam Deputy Speaker (Dawn Primarolo): Much as this topic might interest some Members, I think the hon. Gentleman should return to the subject of this afternoon’s debate.

Hywel Williams: Thank you, Madam Deputy Speaker.

To summarise our motion, we appreciate the valuable work done by public sector workers and believe that they should receive pensions that are affordable, sustainable and fair. I think that we can have agreement across the House on that. We believe that the Government’s changes are primarily for the purposes of deficit reduction—I do not think we are going to have agreement on that—rather than to secure the long-term sustainability of public sector pensions. These changes are, to our minds, unfair on public sector workers.

We also note that the findings of the National Audit Office for the 2007-08 period show that pensions re-negotiated at that time will generate estimated savings of 14% by 2059-60. The conclusions of the 38th report of the Public Accounts Committee reveal that the cost of public service pensions has reduced substantially because of those changes. We agree with the criticism in both reports of the failure to develop a long-term strategy for the role of pensions in recruitment and retention in the public sector, and we condemn the Government’s threat to cut the devolved Administrations’ budgets if they do not implement the Government’s immediate levy.

Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC): I am following my hon. Friend’s argument closely and I agree entirely with what he says. Does he agree that there is a link between this drive to the bottom on public sector pay and the Chancellor’s view that we should be looking at regional pay? This flexibility is all about a drive to the bottom, and it is unacceptable out there; people will not have it.

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Hywel Williams: My right hon. Friend makes an excellent point, to which I shall return later. The Prime Minister’s numerous assurances that he is not in favour of driving down public sector pensions, and that it is not a race to the bottom as far as he is concerned, are strange in view of the actions of his Government.

Finally, our motion calls explicitly on the Government

“to reverse its unfair changes to public sector pensions.”

Let me make it clear from the outset that no one I have spoken to wanted to go on strike. Everyone wants a reasonable settlement. My nationalist party colleagues and I hope that the talks between the unions and the Government will continue, and will reach a successful conclusion in the terms that I have outlined. We understand that the unions have accepted the continued need for negotiation and further change. Perhaps the Minister who winds up the debate will tell us when the two sides met most recently in the last month, who was involved—there have been questions about who was speaking for whom—and when they intend to meet again.

Julian Smith (Skipton and Ripon) (Con): As the hon. Gentleman develops his argument, will he be comparing the positions of employees in the public sector with those in the private sector, who for many years have been having to increase their contributions in order to receive decent pensions?

Hywel Williams: Government Members have deployed such arguments time and again, which is strange given that in other contexts, such as that of education, they always deny that they are lowering standards. It is not about levelling down, they say, but about levelling up—yet when it suits them, it is the other way around. The hon. Gentleman clearly was not listening when I made that point earlier.

Stewart Hosie (Dundee East) (SNP): The hon. Member for Skipton and Ripon (Julian Smith) has advanced a spurious argument. There are some very good private sector schemes and some very good public sector schemes. Some private sector schemes have gone bust, and some public sector schemes require an in-year top-up. This is not about “private good, public bad”, or the other way around. It is about having good schemes, full stop. It is about fairness, and about not levelling down in either the private or the public sector.

Hywel Williams: My hon. Friend has made a good point. If Government Members are concerned about the private sector, they should be concerned about the large number of people who have no pensions at all. That is what concerns me, and concerns my colleagues.

Mr Mike Weir (Angus) (SNP): Certain members of the Government are suggesting, as one of their “public against private” arguments, that public sector schemes are gold-plated. In fact, the average public sector pension is about £5,000 a year, and local government pensions can be as low as £3,000 a year, or £80 a week.

Hywel Williams: My hon. Friend has anticipated a point that I was going to make, which will doubtless be made again by other nationalist party members. Anyone reading the popular press would imagine that public sector workers were driving around in this year’s model

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of car and enjoying two or three foreign holidays a year, but that is not, of course, the case.

We say “Let us have negotiations”, but is the 3.2% imposition itself negotiable? What the Government have announced today will merely shift the burden from one group of workers to another. They are trying to squeeze out some sort of deal, but we utterly reject that way of going about things.

David Mundell: I think it important for the hon. Gentleman to clarify whom he means by “we”. The Scottish National party is in government in Scotland, and a number of choices are available to it. For instance, there are funds that it could allocate to reduce pension contributions, but it has chosen not to do so.

Hywel Williams: Again, I do not want to go down that particular avenue—[Interruption.] I have some things to say that the Minister might like to listen to. My hon. Friends will be responding to his point later, but let me say now that the possibilitiesto which he alludes constitute a broad spectrum of theoretical options for consideration, and that the Scottish Government have expressed no preference. I am sure that others will say more about that later.

Stewart Hosie: The Minister said that a number of choices were available to the Scottish Government. As he will know, the choices are rather limited by the UK Government’s threat to withdraw £8 million a month— £100 million a year—from the Scottish budget if we do not stick to their timetable. I am sure he agrees that that rather limits the choice of manoeuvre for a Government who do not want to go down that path.

Hywel Williams: I am sure that the £100 million cut that the UK Government are dangling before them is proving very persuasive for the Scottish Government, given the difficult position that they are in. I am sure that more will be said later about that as well.

Mr Alan Reid (Argyll and Bute) (LD): Because of the council tax freeze in England, the Barnett consequentials provided an extra £66 million for the Scottish Government, and they received hundreds of millions extra as a result of the autumn statement. Does the hon. Gentleman not agree that the Scottish Government can choose whether or not to use that money to prevent an increase in pension contributions?

Hywel Williams: The hon. Gentleman is a keen student of Scottish affairs, and possibly of Welsh affairs as well. He will know that the block grant has been falling, and that the choices available are limited.

Mr Brian H. Donohoe (Central Ayrshire) (Lab): Does the hon. Gentleman not accept that the Labour-run Scottish Executive also had to make choices? When they undertook to introduce free travel for the elderly, they had to do so on the basis of the block grant, and the SNP would have to take a similar hit if they did what the motion suggests.

Stewart Hosie: The budget was going up at that time.

Hywel Williams: As my Scottish colleague says, the budget was going up then.

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Mr Weir: Does my hon. Friend agree that what was said by the hon. Member for Argyll and Bute (Mr Reid) was completely wrong? The Chief Secretary to the Treasury has specifically said that if the Scottish Government do not implement the UK Government’s proposals, their budget will be cut. Barnett consequentials emanating from elsewhere are irrelevant, and besides, the Liberals in Scotland have already called for the money to be spent on numerous things.

Hywel Williams: My hon. Friend has put it much better than I could have done. It is not surprising that the Liberals are, as usual, trying to spend other people’s money.

Mr Reid: Will the hon. Gentleman give way?

Hywel Williams: No, I must try to make some progress. No doubt the hon. Gentleman will have an opportunity to speak later.

Whatever the Government say, the 3.2% is seen by workers and by the general population as an additional and carefully targeted tax, aimed largely at those who have the least means to pay. As for the negotiations, they must be based on proper evidence rather than on the cases that the Prime Minister quoted selectively during last week’s Question Time, which were so effectively debunked in Radio 4’s “'More or Less” programme and in Channel 4’s “FactCheck”.

Jonathan Edwards (Carmarthen East and Dinefwr) (PC): I congratulate my hon. Friend on the excellent speech that he is making. Is he aware of a study by the Fire Brigades Union, which found that 27% of its members were likely, or very likely, to leave their pension schemes if employee contributions were raised? What effect does he think that would have on the sustainability of schemes if it were translated across the public sector?

Hywel Williams: There is clearly a danger that some schemes will become unviable, which would mean that in the longer term those who no longer had pension schemes would become even more dependent on the state. I am sure that Government Members would not want that to happen.

Guto Bebb (Aberconwy) (Con): I am sure I heard the hon. Gentleman say that the 3% increase in pension contributions would target those least able to pay. I believe that the average public sector wage in Wales is about £26,400, compared with £21,700 in the private sector. Furthermore, do not the Government’s proposals protect those earning less than £15,000 a year?

Hywel Williams: That argument fails to take several factors into account, such as the 710,000 people who will lose their jobs and the 1% pay freeze that looms before us at a time when inflation is eating into the real value of wages.

Our constituents have gone on strike with the greatest reluctance. They are not the wild-eyed extremists so beloved of those on the Government Benches. Members of the National Association of Head Teachers—scarcely a hotbed of left-wing insurrection—went on strike last week for the first time in 140 years. Anna Brychan, director of the NAHT in Wales, summarised the arguments

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advanced by many public service workers who felt that they had no choice but to go on strike. I shall paraphrase what she said, because it was very lengthy. She said that the NAHT was not persuaded by the unsustainable and unaffordable argument. The pension changes in 2007-08, according to the figures from the National Audit Office, showed savings of 14%, but no re-evaluation has been made since the previous apparently permanent settlement. May I draw the attention of the House to my early-day motion 2198, which makes that point?

Guto Bebb: Will the hon. Gentleman give way?

Hywel Williams: I must press on, as I have rather a lot to say. Time is pressing, and it is a short debate. Of course, the hon. Gentleman can make his own speech, unless he has to leave the Chamber, but I give way.

Guto Bebb: Was not the individual whom the hon. Gentleman has just mentioned—Anna Brychan—once a member of Plaid Cymru who worked for the party in Cardiff?

Hywel Williams: So did the hon. Gentleman, before he jumped. I know him very well. He is a very nice man and is trying hard to be a nasty curmudgeon, but he is failing entirely.

Jacob Rees-Mogg (North East Somerset) (Con): Does that not prove the general point that there is more rejoicing in heaven over one sinner who repenteth than over the 99 who remain unrepentant?

Hywel Williams: It depends on whether they are going up or down.

Returning to the comments made by the NAHT, I refer to the written question tabled by my hon. Friend the Member for Carmarthen East and Dinefwr (Jonathan Edwards) on 21 November. In his response, the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), said:

“The latest valuation of the teachers’ pension scheme was published in November 2006. This was the actuarial review of the scheme as at 31 March 2004.”—[Official Report, 21 November 2011; Vol. 536, c. 87W.]

In other words, there has been no formal published valuation since the 2007 changes were introduced, so how can the Government claim that the scheme is unaffordable?

The NAHT also says that contribution increases are all about plugging the deficit, not about making pensions affordable. Teachers are already doing their bit: they have a pay freeze, and below-inflation pay increases to look forward to. In respect of the higher pension age, they recognise the implications of the population living longer, as we all do. That must be debated, but we need to be sensible. Teaching, the NAHT says, is physically and emotionally demanding, and expecting people to do it at 68 is “an ask too far”. That is also the view of other unions that I have consulted. Shane Price, my local Fire Brigades Union representative, asked me:

“Would you want, or expect, to be carried out, coughing and spluttering from a blazing building by a 68 year old fireman?”

Clearly not. In any event, says the NAHT, the changes will distort the age profile of the profession. There is a need to ensure a throughput of young people, and that

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will be jeopardised. Younger teachers will be affected most by the proposed pension scheme, and they may opt out altogether, as we have discussed.

The NAHT says that this is an attack on education. It wants to attract the brightest and the best—that is what pupils deserve—and while the salaries are not great given the demands of the job, the professional rewards are enormous. We cannot afford for people to discount those professional rewards because their conditions of service are dramatically reduced. These are serious, responsible points. They are made, it is true, by people who are looking after their own interest, but uppermost in their mind is the future of our children, the future of education and of the teaching profession in general.

Jim Sheridan (Paisley and Renfrewshire North) (Lab): I thank the hon. Gentleman for giving way—he has been extremely generous in accepting interventions. Having read the motion, I agree with almost all of it, particularly the part in which he identifies who is responsible for the attack on public sector pension schemes. May I therefore assume that he will continue his criticism of the enemy within—the coalition Government—and not be tempted to criticise anyone else?

Hywel Williams: The bulk of my speech, as one would expect, is about the Government’s proposals, but the hon. Gentleman will have to wait and see.

Lleu Williams from University and College Union Wales told me:

“We are pleased that MPs will debate public sector pensions a week after tens of thousands of people in Wales took industrial action to show how angry they are…The action last week, alongside the debate on public sector pensions, is testament to the strength of feeling on these issues”

in Wales. He continued:

“We hope today’s debate sends a clear message from the people of Wales to Westminster that we will not go quietly into the night over these proposed changes.”

I have heard from the other side that union members did not support the strike—they have deserted the cause, as it were. UCU general secretary, Sally Hunt, confirms that it saw record recruitment levels both before and after the strike. That gives the lie to that one. Finally, the National Union of Teachers welcomes today’s debate and says that rather than creating an unnecessary and damaging divide between the public and private sectors, Ministers would do well to focus their attention on securing fair pensions for all if future Governments are to avoid pensioner poverty on an unaffordable scale, which is the point that I made earlier regarding future dependence on state benefits.

I shall refer briefly to that bunch of hard, crazed revolutionaries, the British Medical Association, which strongly opposes the plans set out by the Government to reform the NHS pension scheme, including increased contributions from doctors; raising the standard pensionable age for staff; and devaluing many pension settlements. It queries whether the NHS pension scheme is in need of reform, given that it underwent a major overhaul only three years ago. It says that the scheme is in very good financial health, and generates a surplus for the Treasury. Indeed, over the seven years from 2009-10 to

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2014-15, the NHS pension scheme is expected to provide a surplus of £10.7 billion for the Treasury.

The BMA is engaged with the Governments in Westminster and in the devolved nations on the proposed reforms to pensions, but it has not ruled out balloting members on industrial action over the matter. It is thinking of moving towards action, and its decision will be informed by a ballot at the beginning of the year. That is just a sample of the views and arguments that we have heard—there are plenty more.

One of my constituents, a small business person—such people are often cited by the Government as those who would suffer as a result of the strike—said to me on the day of the strike:


the Government here in London—

“think that people like me don’t support the strike. They’re wrong. A lot of my business comes from county council workers. How will I keep going if they don’t have the money to spend?”

That shows the interaction and co-dependence of the public and private sectors in areas such as mine.

Alun Cairns: If that argument is to be sustained, is it not logical that the way to resolve the economic problem is simply to make the public sector as big as possible, and the private sector can then profit?

Hywel Williams: I am surprised to hear the hon. Gentleman arguing for that. I thought he took the contrary view, but perhaps my sense of irony is underdeveloped.

The Office for Budget Responsibility estimated in March 2011 that 400,000 people in the public sector would lose their jobs. In its response to the autumn statement, that rose by nearly 80% to a disastrous 710,000. One further, crucial reason as to why we in Plaid Cymru and the Scottish National party have called this debate is that public sector jobs are disproportionately important to countries and regions outside London and the south-east. Paying an extra 3% out of their wages is bad for individuals wherever they live, and I have particular sympathy for those in inner-city areas with high costs such as public service workers in central London. Looking across the UK, the 3% imposition and the job losses will have a particularly strong impact on Scotland, Wales and the north of England, especially as the private sector is generally weaker in those areas.

That will be even more the case if the Government follow Labour’s lead in 2008 and introduce regional rates of pay, as my hon. Friends have said. The figures on the size of the public sector are clear, sad and revealing. Briefly, in Scotland the public sector accounts for 28.6% of jobs; in the east the figure is 23.7%; in the north-east it is 29.4%; in the south- east it is 22.8%; in Wales, unfortunately the figure is highest at 31.2%; and in London it is 22%. There is a clear north-south divide. The people we represent will be hit particularly hard, as will our local economies because of the grotesquely distorted, south-east-weighted economic development of the UK and the obsession with the City of London.

This morning I received an e-mail from Mr Mark Rowe, a PCS member from the Devon area. I do not know Mr Rowe; I have never met him, and I do not know what his politics are, but he said this in his e-mail:

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“Dear Mr Williams, Thank you for supporting hard working public servants in their struggle over pensions. It is good to know that someone is. We had a huge rally through Torquay on the 30th, hardly a ‘damp squib’”—

as it was described by the Government. He added that there had been “much public support” and asked why Labour are not “fighting our corner”. Public sector pensions have not been the subject of a single full Opposition day debate in the House for the past 18 months, despite the fact that Labour has had 36 Opposition day debates since the public sector pension changes were first introduced in 2010.

Pete Wishart (Perth and North Perthshire) (SNP): Is the situation not worse than that? Not only has Labour never bothered debating this subject in the House of Commons despite having had so many opportunities to do so, but the Leader of the Opposition described these strikes as wrong.

Hywel Williams rose—

Madam Deputy Speaker (Dawn Primarolo): Order. I will be grateful if the hon. Gentleman returns to the topic of his motion, which is the Government’s plans on pensions.

Hywel Williams: I will obey your injunction, Madam Deputy Speaker.

As I have said, I have had a great deal of correspondence with the unions, and I have given their point of view, which concurs with ours. We are happy to fight the workers’ corner in this dispute. We are happy to press for a proper pensions settlement, which is why we will press our motion to a Division.

1.31 pm

The Parliamentary Under-Secretary of State for Scotland (David Mundell): The weather in Scotland today is very stormy, and our thoughts are with those who are having to endure the consequences of that. I do not know whether this debate will be equally stormy.

Sheila Gilmore (Edinburgh East) (Lab): I hope the Minister will not think just about the people enduring travel disruptions, but will realise that the majority of those who will be working hard to resolve any problems that arise will be public sector workers.

David Mundell: I do realise that—and that may be the only point on which I agree with the hon. Lady.

I thank the hon. Member for Arfon (Hywel Williams) for opening the debate. He spoke for about 20 minutes, and in that time he at least said exactly the same about Scottish National party policy on this issue as was revealed in a two-and-a-half-hour debate in the Scottish Parliament last week, which was precisely nothing. I will return to that subject.

As the hon. Member for Edinburgh East (Sheila Gilmore) has already mentioned, no Member would disagree with the following sentiments in the motion:

“That this House recognises and appreciates the valuable work done by public sector workers”


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“believes that they should receive pensions which are affordable, sustainable and fair”.

Indeed, those sentiments form the foundations of our reform of public service pensions. Our objective is to put in place new schemes that are affordable, sustainable and fair both to taxpayers and public service workers. Let us be clear: public service pension reform is needed. The costs have increased by a third in the last 10 years, to £32 billion, and the Office for Budget Responsibility forecasts that, without reform, spending on pensions will rise by almost £7 billion over the next five years.

Understandably, this is a contentious issue, but fairness remains the cornerstone of our approach. We believe that public service workers deserve a good pension in retirement, as a fair reward for a lifetime spent serving the public. We recognise the vital contributions made by teachers, nurses, council employees and civil servants to the well-being of our society now and in the future.

That is why in June 2010 my right hon. Friend the Chancellor commissioned Lord Hutton, a Work and Pensions Secretary in the previous Government, to take an unbiased and clear-headed look at public service pensions and make proposals for reform. His landmark report has set the parameters of the debate, and it has been rightly lauded for its depth and vision.

Lord Hutton set out an overwhelming case for reform. He said that

“the status quo is not tenable”,


“future costs are inherently uncertain”,

and that at present the public

“cannot be sure that schemes will remain sustainable in the future.”

In his interim report, he found that there was a clear justification, based on the past cost increases borne by the taxpayer, to increase contributions in the short term to ensure a fairer distribution of costs between taxpayers and members. We accepted that recommendation, and increases in member contributions will take place, starting next year. However, next year’s increase merely reflects the increase already planned by the previous Government. We remain committed to securing in full the overall savings of £2.3 billion in 2013-14 and £2.8 billion in 2014-15 that we announced at the 2010 spending review.

In his final report, Lord Hutton produced a blueprint for a new landscape of public service pensions. It is based on retaining defined-benefit schemes but moving to a fairer career-average basis, and increasing the retirement age in line with the state pension age to protect the taxpayer against future increases in life expectancy.

Jim McGovern (Dundee West) (Lab): Presumably the Minister is talking about UK public sector pension schemes, whereas the motion seems to be specifically about devolved pension schemes. Does he agree that if there is a solution, it will be that the separatists in Edinburgh just say, “We won’t apply any changes”? Does he also agree that their excuse of continually saying, “The big bad boy in London did it” and then running away is wearing thin?

David Mundell: On that point, I can agree with the hon. Gentleman. The Scottish Government have considerable flexibility to make their own choices, but they have chosen not to do so.

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Mr Weir: Will the Minister confirm that the Chief Secretary specifically said that if the Scottish Government did not accept these changes, he would fine them £8 million per month, which amounts to £100 million a year and half a billion pounds over the spending period? How are the Scottish Government supposed, effectively, to pay for this twice, and thereby pay £1 billion?

David Mundell: What I can make clear to the House is that as a result of last week’s autumn statement the Scottish Government will receive approximately £69 million extra in resource departmental expenditure limit funds, that as a result of the Budget they received an extra £112 million, and that between the Budget and the autumn statement they received an extra £90 million, which they had not budgeted for.

Mr Weir: However, will the Minister please explain what difference that makes, as we are still going to lose half a billion pounds over this spending period? There is still going to be a massive cut if the Scottish Government do not follow what this Government are imposing upon them.

David Mundell: The difference it makes is that the SNP will have the option to back up its words with deeds, but instead it fails to do so. Its argument is entirely based on blaming the Westminster Government. It has funds available to make these choices, yet it prefers to deceive public service workers in Scotland by suggesting that everything is entirely at the behest of the Westminster Government.

Mr Weir: Will the Minister therefore go to the Chief Secretary and say, “Take away this threat and allow the Scottish Government to do what they want to do for Scottish public sector workers”? Is the Minister happy that there will be this cut of half a billion pounds over the spending period?

David Mundell: I know the hon. Gentleman does not want Scotland to remain in the United Kingdom—that is his policy—but he and his Government have the ability to make this choice, as the hon. Member for Dundee West (Jim McGovern) set out, yet they have chosen not to do so.

Katy Clark (North Ayrshire and Arran) (Lab): We should look at what the SNP has actually done in this respect. It has responsibility for the Scottish Public Pensions Agency, whose submissions to the Hutton review were far worse than what the coalition Government propose.

David Mundell: I will not presume that the hon. Lady was complimenting the Government, but she is correct in that all four of the suggestions the Scottish Government made to the Hutton inquiry would certainly leave Scottish public sector workers no better off than under the UK Government proposals, and a number of those suggestions would leave them distinctly worse off.

Pete Wishart: As an Under-Secretary, the Minister surely recognises the difference between a Government agency and a Government spokesperson.

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David Mundell: I recognise the full ambit of the First Minister’s many responsibilities and I do not believe that such a submission would have been made without consultation with the Scottish Government.

Ian Murray (Edinburgh South) (Lab): I think we are getting to the crux of some of the issues. I would never agree with what the coalition Government are doing to public sector pensions in Scotland, but the Scottish National party did put in a report to the Hutton review that was far more draconian than what the Government are proposing. The SNP may be trying to say to the House that this was done by an agency, but why did the Scottish Government not contribute a proposal to the review?

David Mundell: The hon. Gentleman makes a valid point. It reinforces what all of us who are aware of day-to-day Scottish politics know, which is that the SNP Government in Scotland speak with one word but their deeds are quite different.

I return to what I was discussing before the interventions. The Government accepted Lord Hutton’s recommendations in full and can reassure the House that the reformed public—

Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op): The Minister has made much of Hutton’s report and fairness, but does he not agree it seems odd that the Government jumped the gun by announcing the 3% increase before Hutton’s final report? How does that demonstrate fairness?

David Mundell: I know that the hon. Lady was not in the House at the time, but the 3% figure is broadly equivalent to the sum that her Government had identified in the pre-Budget report in 2009.

Sandra Osborne (Ayr, Carrick and Cumnock) (Lab) rose—

David Mundell: I will give way in a moment, but I want to make some progress.

The Government continue to engage actively with the trade unions to agree what the new pension schemes will look like. Discussions began in February and the Government remain fully committed to meaningful engagement. Scheme-level discussions are continuing with the trade unions, with meetings yesterday, today and tomorrow, which deals with a question asked by the hon. Member for Arfon. Significant progress has been achieved and the trade unions have welcomed many of the commitments that we made at the start of this process, including the one that public sector schemes will remain defined-benefit schemes, with a guaranteed amount provided in retirement. That, of course, was one of the options not put forward by the Scottish Public Pensions Agency.

Several hon. Members rose

David Mundell: I am going to take an intervention from the hon. Member for Ayr, Carrick and Cumnock (Sandra Osborne) once I have completed this section of my speech.

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The unions also welcomed the commitment that all accrued rights will be protected. Everything that public servants have earned until the point of change they will keep, and it will be paid out in the terms expected, at the retirement age expected. Final salary means just that: that someone’s accrued rights will be based on their final salary, not at the point of change but whenever their career ends or they choose to leave the scheme. No public service worker need worry about the entitlements they have already built up.

Sandra Osborne: The Minister talks about public sector reform, so why is the 3% rise going straight to the Treasury? That has nothing to do with the sustainability of public sector pensions.

David Mundell: As the hon. Lady knows, the Treasury underwrites the scheme. The Treasury requires to be paid out whatever is required to be paid out in relation to the scheme. The scheme does not operate on a basis of contributions and pay-outs, because the Treasury is underwriting the scheme so that everybody is paid in full as is their entitlement.

Mr Donohoe rose—

Hywel Williams rose—

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

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course, if agreement cannot be reached, the Government may be required to revisit our proposals and consider whether those enhancements remain appropriate.

Hywel Williams: Some time ago, the Minister referred to a meeting held yesterday, but will he clarify who was involved? Was a Minister involved in the discussions?

David Mundell: My right hon. Friend the Minister for the Cabinet Office and Paymaster General and my right hon. Friend the Chief Secretary to the Treasury have made it clear that the meetings are ongoing on a regular basis in respect of the specific schemes. I am sure that I will be able to give the hon. Gentleman the information he requires.

Our objective remains to agree reforms of the main schemes—those for teachers, health and the NHS, the civil service and firefighters—by the end of the year, and my right hon. Friend the Chief Secretary will update the House in due course. The Government’s preferred scheme would produce better pensions for those on low and middle incomes who have devoted a lifetime to public service. At the same time, public service pensions will remain considerably better than those available in the private sector, as my hon. Friends have suggested. A primary school teacher earning £32,000 per year could receive a pension of £20,000 under our proposals. To earn the equivalent pension in the private sector, an employee would have to pay in more than one third of their salary.

Bob Stewart (Beckenham) (Con): Several of my constituents who work in the private sector have told me that they totally agree that public sector workers should get sustainable, affordable and fair pensions, but they are concerned that for them to have a similar pension they would have to increase their contributions by a factor of three or four. They do not think that that is fair in the current circumstances.

David Mundell: My hon. Friend makes a good point and I empathise with it as the MP for a constituency that has some of the lowest private sector wages in the UK.

Only 10% of private sector workers have access to the type of scheme that I was describing, which is at a guaranteed level and is inflation proofed, while only one third of private sector employees currently get any contributions from their employers.

Jonathan Edwards: I come back to the issue of the divide-and-rule strategy of playing the public sector off against the private sector. Is the Minister aware that the average pension of a retiring teacher is £9,000 per annum, and that the figures for NHS workers, for civil servants and for members of the armed forces are £7,000 per annum, £6,000 per annum and £7,500 per annum respectively? Do those figures seem unfair to him?

David Mundell: It is a question not of playing the public sector off against the private sector but of setting out a fair scheme for public sector workers, and that is what this Government are seeking to do.

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The motion mentions two reports, one by the National Audit Office and the other by the Public Accounts Committee, which do not provide us with sustainable and lasting models for the future. Pensions, as they stand, are not affordable. As Lord Hutton says,

“the status quo is not tenable.”

The Office for Budget Responsibility’s latest forecast demonstrates that long-term costs have continued to increase since March, so reform is now essential because the costs of public service pensions have risen dramatically over the past few decades. The fact is that we are all living longer; the average 60-year-old is living 10 years longer than was the case in the 1970s.

David T. C. Davies (Monmouth) (Con): I thank my hon. Friend for the points he is making. Does he agree that unless these reforms go ahead public sector workers will not be able to rely on anything, because there might not be any money to pay them anything? That is why it is so important that these reforms go ahead.

David Mundell: I absolutely agree. The speech from the hon. Member for Arfon seemed to me, particularly on Wales, to be very much an argument for the status quo.

Katy Clark: We already know that public sector pensions are, on average, less than £5,600 a year, so if they are going to be even lower what will people live on—state benefits?

David Mundell: There is no suggestion that those on the lowest pay will receive lower state pensions. The Labour party has been very keen to engage in such scaremongering, but the Government’s proposals specifically protect those on the lowest earnings of below £15,000.

Before I finish, I want to turn to some of the specifics about Scotland.

Dr Eilidh Whiteford (Banff and Buchan) (SNP) rose

David Mundell: Perhaps the hon. Lady will agree with me on them.

Dr Whiteford: I hope that when the Minister comes to explain the protection for low-paid workers he will be able to clarify something about which many people in trade unions have been asking. Will part-time workers’ earnings and the increase in their contributions be calculated on the basis of full-time equivalent wages?

David Mundell: They will be based on full-time equivalent wages. That point is clear. The difference on pensions between this Government and the Scottish Government is that we are clear on the points that people might not want to hear rather than pretending to people that they can have everything when that is not sustainable.

Dr Whiteford: The contributions of a woman who works part-time in a professional job—for example, as a nurse or a teacher—but takes home less than £15,000 a year will be increased not at the lower rate but at the higher rate of a full-time equivalent.

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David Mundell: The hon. Lady knows that in all aspects of employment, the full-time equivalent applies. That is what will apply to pensions.

Mr Reid: Will my hon. Friend confirm that that decision in relation to a nurse in Scotland is entirely one for the Scottish Government to take?

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—

Mr Weir rose—

David Mundell: And perhaps the hon. Gentleman will answer us.

Mr Weir: The Minister is talking absolute nonsense. Will he not accept that if the Scottish Government did that, they would lose £1 billion from a budget that is already being cut by making the payment then losing money through a clawback from the Treasury?

David Mundell: I have already set out all the additional money that the Scottish Government have received since the budget settlement last year from which they could have made these choices. Sometimes, choices are

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difficult, but the Scottish Government prefer to pretend to people that they are on their side while not being willing to take difficult decisions.

Ian Murray: You are talking about choices that the SNP Scottish Government will make and one of the big choices they made was to cut capital spending far faster and far further than your own Government.

Madam Deputy Speaker (Dawn Primarolo): Order. The hon. Gentleman is referring to the Minister and should refer to him as the Minister or “he”. “You” means the occupant of the Chair, and this is nothing to do with me, fortunately.

David Mundell: That is a phrase often used in Scotland, Madam Deputy Speaker, by one of the—

Madam Deputy Speaker: Order. I say to the Minister that I am absolutely aware of the use of “you”, but I think that in parliamentary debates we should stick to the convention here, as I am sure he agrees.

David Mundell: I will indeed do that, Madam Deputy Speaker.

The SNP Scottish Government have played fast and loose with Scotland on pensions. Rather than making responsible suggestions, they resort to scare tactics. In this motion, the SNP and Plaid Cymru are frightening people by saying that they will receive less pension. The SNP’s submission to Lord Hutton, as we have heard, offered at best no better and in some cases a much worse deal. The Scottish Public Pensions Agency, an agency of the Scottish Government, headed by the Cabinet Secretary for Finance and Sustainable Growth, John Swinney, made a number of interesting suggestions when it illustrated options for further change. It suggested reducing current employer contribution cap levels with members meeting all costs above that cap. Alongside that, it proposed to reduce the levels of benefits available without necessarily reducing the levels of contributions.

Pete Wishart: I am listening very carefully to the hon. Gentleman. I suppose it should not come as a surprise to anybody in this House that there are now more giant pandas in Scotland than there are Tory MPs; listening to the Minister, we can see why. Will the Minister concede that there was no submission from the Scottish Government to the Hutton report, but there was a submission from an agency of the Scottish Government?

David Mundell: I do not accept that analysis. The hon. Gentleman might have got a laugh if he had thought that up himself rather than stealing it from the Twittersphere.

The Scottish Government’s proposals were a toxic cocktail topped up by suggestions to introduce later retirement ages, change accrual rates, apply changes to all members, not just new scheme members, and move to a defined contribution scheme, which places the risk of uncertainty over the value of the final pension on the member. All those proposals would mean a worse deal for public service employees than the coalition’s proposals.

David Mowat (Warrington South) (Con): Will the Minister give way?

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David Mundell: One last time.

David Mowat: I am listening very carefully to the Minister’s comments on the interaction between the Scottish Government and himself. Does he agree that one of the interesting features of the motion is the last part, which appears to concede the point that the Barnett consequentials should be reviewed and that certain types of expenditure should be taken out of them? If that is a principle that the SNP wishes to adopt, we should consider the Barnett formula more generally and the whole settlement and block grant for Scotland.

David Mundell: My hon. Friend makes an interesting point, because that is one issue on which there is an absolute divide between Plaid Cymru and the SNP. Plaid Cymru wants significant change to the Barnett formula and, as I understand it, the SNP does not. That is part of the inherent illogicality that is at the heart of their argument.

I am surprised that we hear nothing these days about independence, which is relevant. Perhaps that is because Plaid Cymru does not promote independence. I look forward to hearing SNP Members set out exactly how an independent Scotland would be able to fund not only existing pensions, but provide enhanced pensions, without consequences for pensioners in Scotland. I am sure that we will hear calls for the break-up of the United Kingdom.

I also look forward to hearing from Labour Members. I understand that Labour MSPs chose not to take part in the debate in the Scottish Parliament because they were working in their constituencies that day. I know that the Labour party has not been an effective Opposition in Holyrood, particularly since the hon. Member for Glasgow East (Margaret Curran) left, but not to turn up at all is taking that to an extreme. I look forward to hearing their contributions today.

2.1 pm

Mr William Bain (Glasgow North East) (Lab): I apologise to the hon. Member for Arfon (Hywel Williams) for missing the first few moments of his opening remarks. Let me begin by paying tribute to the contribution made by those who work in our public services, including 595,000 in Scotland, such as those who care for the sick and elderly in hospitals and care homes, those who provide inspiration to children through the gift of teaching and those who clean up our communities. They are the backbone of our society. They had no part in causing the great recession or the slump in tax revenues and demand in 2008-09. They deserve better treatment from the Government, whose economic policy is based on a further 310,000 of them being made redundant by the end of this Parliament, and their families suffering an uncertain future, and all because of the Chancellor’s adherence to a deflationary economic theory that is not working and is sapping hope and potential from communities across our country.

Mr Graham Stuart (Beverley and Holderness) (Con): I agree with the hon. Gentleman’s sentiments towards public sector workers and the excellent work they do, but they were a part of unsustainable Government spending, even in years of boom revenues. Does he accept that they deserve an apology for the role that he

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and his party played in giving us unsustainable public funding, which has now led to hard decisions having to be made by the Government?

Mr Bain: The current Chancellor agreed with every penny piece of spending from 2005 to 2008. He decided to change course on public spending only when the recession was beginning to hit. We can see from the economic illiteracy of the previous Budget and the autumn statement that to have adopted a deflationary policy at that time would have seen unemployment and public sector redundancies soar even higher. That is not the approach that would have safeguarded a recovery, and it is one that we were right to reject.

Mr Stuart: Will the hon. Gentleman give way?

Mr Bain: I will give way to the hon. Gentleman later.

Today’s concessions by the Secretary of State for Health on NHS pension contributions show that the Government’s plans are already unravelling under the weight of their own contradictions and injustices. Is it not disgraceful that the Chief Secretary to the Treasury did not come to the House today to make a statement on the details of this partial climbdown, instead of the Government briefing the press?

At first sight, the concessions stand up to no more scrutiny than the Government’s previous partial climbdown, which would have required a near 50% increase in annual contributions from affected workers, for up to eight years longer, with the claimed increased pensions paid for as much as eight years fewer, losing real terms value each year due to uprating in line with the consumer prices index rather than the retail prices index. Unison has already said in response to today’s announcements that a one-year delay before low-paid workers will pay higher contributions is cold comfort.

This is the Government who refuse to impose a tax on bank bonuses, but believe that nurses, teachers and catering staff should face additional tax rises instead. This is the Government who in the autumn statement sought to slash £1.2 billion a year from the tax credits of these same workers, hurting women and children four times more heavily than the balance sheets of the banks. We need a negotiated solution in which both sides give ground. The Opposition accept many of Lord Hutton’s points, but the Government pre-empted this with the hike in contributions, which must be subject to negotiations.

Let me set out the reasons why we find the Government’s current proposals unacceptable and urge them to produce plans for the future of public sector pensions that genuinely do not penalise those who are least able to shoulder the burden. First, the Chancellor’s proposals are not about fairness or long-term stability. They are motivated by a reckless plan of spending reductions that are made worse by his failure to grow the economy in the last year and the slump in growth that the Office for Budget Responsibility predicts for this year, next year and the year after. The Chief Secretary to the Treasury set out in the comprehensive spending review last October cuts in the public sector pension bill from next April of more than £1 billion, rising to £2.8 billion by 2014-15, coming from the 3.2% hike in contributions paid by 750,000 public sector workers, all as part of the

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Government’s plan to take £81 billion out of the economy by 2015 through public spending cuts. However, given that the lack of demand and growth is the biggest problem facing the country today, how will reducing the living standards of hundreds of thousands of public sector workers on top of the two-year pay freeze increase consumer confidence or strengthen the retail and service sectors, which will be harmed by this tax on public sector workers?

David T. C. Davies: How much will this plan B that the hon. Gentleman is outlining add to the national debt, and what will be the increase in interest payments each year as a result of the money he wants us to borrow from the banks that he despises?

Mr Bain: The hon. Gentleman has once again revealed that the Government simply have a plan for cuts and no plan for growth or jobs. A five-point plan for growth and jobs would cut VAT, reduce national insurance and create jobs, which would help pay down the debt and the deficit.

Gordon Banks (Ochil and South Perthshire) (Lab): Does my hon. Friend agree that it is all about priorities and that the Conservative party has the wrong priorities and we have the right ones?

Mr Bain: My hon. Friend, who has been involved in setting up and running a business, knows what is needed for job creation in these difficult times.

Mel Stride (Central Devon) (Con): Will the hon. Gentleman give way?

Mr Bain: I want to make some progress and will give way again in a moment.

The Government are attempting to create the politics of division between low-paid workers in the private and public sectors and to engage in a race to the bottom on public sector pensions instead of focusing on increasing provision among employees in the private sector, but the public will not be fooled. Cutting a dinner lady’s pension will do nothing to increase the pension of a call centre worker or end unfairness in private pension provision. Two in three private sector workers are not in a workplace pension scheme. Two in three public sector staff earning between £100 and £200 a week are in a pension scheme, but only one in seven private sector workers in the same wage band are in a pension. Only 11% of private sector employees are in defined benefit pension schemes. The Government simply fail to grasp or take action on the unfairness in the pension packages of top directors in the private sector, who have pensions worth nearly £4 million on average.

Mr Graham Stuart: Will the hon. Gentleman give way?

Mr Bain: I will give way to the hon. Gentleman a little later, because I want to make more progress with my argument.

The average public sector pension in local government is £3,000 a year, and half of female public sector pensioners receive less than £4,000 a year, or £80 a week. As Lord Hutton’s report makes clear, the notion that current

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public sector pensions are gold-plated is entirely wrong. The Government’s plans mean that a part-time 45-year-old school dinner lady with five years’ service, who is in the local government pension scheme and on a salary of £8,000 per year, would receive £400 a year less in her pension by the age of 65, or £672 a year less if she took it at 68, while she would pay £5,500 more in contributions by her retirement.

In April, the Government altered the indexation of public sector pensions from the retail prices index measure of inflation to the consumer prices index measure. The TUC estimates that the change has reduced the average value of public sector pensions by 15%, and the OBR has assessed the reduction to be 8.7% by 2017.

Dr Whiteford: If the hon. Gentleman is so concerned about the switch from RPI to CPI, why did he not vote against it on 17 February?

Mr Bain: Sadly, this Government will have had another three Budgets and, perhaps, another three autumn statements by the next general election, so we will make our spending plans clear at that general election—[Hon. Members: “Ah!”] We will, and those plans will not involve the massive cuts in capital spending that have put construction workers on the dole in Scotland—which the Scottish National party has made over the past two years.

Mr Reid: The hon. Member for Banff and Buchan (Dr Whiteford) asked a straightforward question. If the hon. Gentleman is now criticising the RPI-CPI switch, why did he not vote against it in February?

Mr Bain: I accept that Liberal Democrat Members might be prisoners of a coalition agreement that they have signed up to for five years, but the hon. Gentleman has to explain to the Scottish people why the Chief Secretary to the Treasury now proposes further austerity, with £23 billion more in cuts in the first two years of the next Parliament, and to explain its effect on the lives of the Scottish people. The switch is a permanent change that will still hurt ordinary families even after the public finances have been restored to stability. The Government’s proposals harm those who are within 10 years of retirement and would have to pay the 3.2% increase in contributions for a pension that would be 15% smaller due to the Government’s changes to contributions and indexation.

The Government’s plans are a further attack on the living standards of women, as 90% of those affected are women, and they add to the effect of the Chancellor’s other cuts in spending, which hurt women twice as hard as men.

Mel Stride: Will the hon. Gentleman give way?

Mr Bain: I will in a second. I just want to make further progress on this point.

The Government’s plans measure income with reference not to gross pay, but to full-time equivalent earnings, treating a part-time employee on a salary of £14,000 a year as if they were a full-time employee on a salary of £28,000 a year. The Office for National Statistics’ own figures from last year show that 806,000 public sector workers who work part-time earn less than £15,000 but

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have full-time equivalent earnings above that amount. Of that number, 91% are women. Only 16% of public sector workers have full-time equivalent earnings of less than £15,000 a year and would escape the rise in contributions. The 3% hike in contributions means that some women would pay almost 50% more in pension contributions.

Secondly, the OBR’s fiscal sustainability report, published this July, makes it clear that, even without implementing the recommendations in the Hutton report but taking into account the likely rise in the elderly population, the cost of providing public sector pensions as a proportion of GDP will fall from 2% to 1.8% by 2030, and to 1.6% by 2060. Lord Hutton has not disagreed that, even without those changes, the costs of providing public sector pensions in the long term are sustainable.

The previous Government signed an agreement with civil service unions, ensuring that new civil servants entered a career-average scheme with a pension age of 65 years old, thereby benefiting low-paid workers whose pay rises are generally less than inflation and who are unlikely to benefit from regular promotions. The agreement helped in particular women, black and ethnic minority workers and people with disabilities. The National Audit Office, in December 2010, evaluated that 2007 deal and concluded that it

“reduces costs to taxpayers by 14 per cent”,

saving £67 billion over the lifetime of existing schemes.

Thirdly, a 3.2% increase in contributions by public sector workers in return for a lower pension would fail the test of fairness at a time when people on low and middle incomes face the biggest squeeze in living standards since the 1920s. For a public sector worker on average pay, the effect of this further attack on living standards is to the tune of a £3,000 cut in gross pay. A worker on a salary of £18,000 per year could lose more than £1,500 over the years from next April.

Fourthly, average incomes are set to fall by 7.4% by the end of this Parliament—the largest slump on record, and all because of this Government’s economic failure; and disposable incomes are set to fall by 4%, according to the Institute for Fiscal Studies in data published last Wednesday. Imposing a higher tax on public sector workers at such a time, with those trends in falling disposable income, is grossly inequitable. The hike in pension contributions, together with the current pay freeze and the future 1% pay cap, will lead to an average 16% cut in living standards by 2014 for public sector workers.

Mr Graham Stuart: Will the hon. Gentleman share with the House his party’s views? I know that he is putting off an awful lot until near the next general election, but, given his level of criticism, will he explain why he did not vote against the RPI-CPI change, as he has singularly failed to do, and whether he thinks that the system of public sector pensions which this Government inherited was entirely fit for purpose and in need of no reform whatever?

Mr Bain: The responsibility for the hike in pension contributions, and for the loss in pensions that public sector workers are going to suffer, is the responsibility of this Government, and I will not be deflected from ensuring that they take full account of it.

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The Scottish National party should also—

David Mowat: Will the hon. Gentleman give way?

Mr Bain: I have been generous enough in giving way. With respect, I encourage the hon. Gentleman to catch Madam Deputy Speaker’s eye if he wants to make further points.

The Scottish National party should thoroughly disown the proposals submitted by the Scottish Public Pensions Agency, which is accountable to Scottish Ministers, as its recommendations would be even more unfair for tens of thousands of Scottish public sector workers. The Scottish Government have power over the NHS, teachers, local government, police and firefighters pension schemes, with the exception of the local government pension scheme. They have not yet declared what they intend do in relation to local government workers, who face the possibility of paying additional contributions to their pensions, so they should end that uncertainty and make their position clear now.

The Government need to change course, to sustain and not destroy the living standards of public sector workers and to recognise that the crushing austerity that they seek to entrench for years to come will leave a legacy of higher child and family poverty. This country deserves better than a Government who are out of touch, out of growth and out of ideas for the future.

Several hon. Members rose

Madam Deputy Speaker (Dawn Primarolo): Order. A large number of Members wish to take part in this time-restricted debate. I am going to impose a time limit from the next speaker of seven minutes, because I have now been informed of how long the winding-up speeches will take. I cannot take account of how many interventions there will be, however, so the time limit may have to be reviewed downwards in order to get everybody in at a later stage.

2.19 pm

Jackie Doyle-Price (Thurrock) (Con): I had hoped, when I saw the text of the motion, that there would be some maturity in this debate about public pensions, which have become unaffordable and unsustainable in the long term, but I should have known better. The speech by the hon. Member for Glasgow North East (Mr Bain) was disappointingly partisan and failed to address the long-term sustainability problems that we face.

It is a truism that every Member of this House appreciates the valuable work done by our public sector workers, and it is not very helpful for any Opposition Member to try to paint Government Members as anti-public sector. I speak as someone who spent almost the entirety of my career working in the public sector, having worked for the police service, in local government, and as a regulator. Among my hon. Friends, we have NHS doctors, ex-servicemen and ex-teachers, so we have as much interest in supporting our public sector workers as any party in this House. However, we also recognise the need for long-term fiscal responsibility and acknowledge that in delivering to public sector

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workers pensions that are affordable, sustainable and fair, that fairness has to apply to those workers and to the taxpayer. As currently constituted, our pensions are not affordable in the long term, for the simple reason that we are all living longer.

The motion suggests—the hon. Member for Arfon (Hywel Williams) referred to this—that these public sector pension reforms are about deficit reduction. Given the time frame in which the Government are implementing the changes and the intention to implement them on a phased basis, I am satisfied that that criticism does not bear examination. These changes are about fiscal responsibility and about not saddling future generations of taxpayers with huge tax liabilities. This is not a short-term fix; it is about getting an appropriate balance between the contributions of workers and the contribution of the taxpayer.

The motion notes that the changes

“are unfair on public sector workers”

because they

“will have to work longer, pay more and receive less in their pension when they retire”.

I have to say to the House that that is the reality for all pension holders. In my last job, I paid into a private pension, and I have just had a look at how much it is worth. In the space of just two months, the value of that pension pot has eroded by some 25%. I suspect that many workers are having to revise their intentions with regard to retirement when they look at how their pension is performing, not least because of the annual raid on pension funds perpetrated by the previous Government.

Mr Graham Stuart: My hon. Friend’s point about support for public sector workers is absolutely correct. The fundamental question is about fairness. Opposition Members are saying that people on lower earnings in the private sector should work longer hours and pay more tax in order to guarantee the pension being provided to public sector workers, while those lower-earning private sector workers often have no provision at all. It is about fairness, and that means that this Government have to take the tough decisions, however unpopular, to put the situation right.

Jackie Doyle-Price: My hon. Friend makes my point much more powerfully than I do.

Hywel Williams: On 30 November, the Prime Minister said:

“We rejected the idea that we should level down public sector pensions.”—[Official Report, 30 November 2011; Vol. 536, c. 931.]

Does the hon. Lady agree with that?

Jackie Doyle-Price: I totally agree with that comment. I do not recognise any criticism that we are levelling down public sector pensions. We are trying to take this forward in a consensual way.

I welcome the fact that in our proposed reforms we are sticking with defined benefit systems. Many private sector schemes have had to migrate to defined contribution schemes because of the unaffordability of their existing schemes. We recognise that public sector workers are going to have to make a much bigger contribution, but

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they are doing so to achieve benefits that would be much more expensive if offered to workers in the private sector.

Sheila Gilmore (Edinburgh East) (Lab): One of the things that might have brought more money in and created some fairness in the pensions system would have been to limit the tax relief on payments into private pensions to the basic rate of tax. Would the hon. Lady agree with that proposal?

Jackie Doyle-Price: I am trying to set out a case for wider structural reform. We have a massive structural challenge across the board in pensions for public sector workers and private sector workers. As regards tax relief for pension contributions, I will not take any lectures from Labour Members given what was done under the previous Government.

It used to be the case that the generous pension provision for public sector workers was a quid pro quo for working in the public sector, as higher salaries were traditionally enjoyed more regularly in the private sector. That is no longer the case. I refer to the comments by my hon. Friend the Member for Aberconwy (Guto Bebb) about average salaries in Wales, which show that public sector workers there often enjoy much higher levels of reward than private sector workers. This will reduce dynamism in the labour market and make us less competitive. Our economy benefits greatly from having people moving from the public sector into the private sector so that we all enjoy their expertise, but when there are such significant levels of differential between salaries, that is not going to happen. If we then add in the benefits that come from the generous pension provision, it becomes impossible for people to move from one job to another.

Let me give an example. In my last job, I worked for the Financial Services Authority, where I had a very senior colleague who had worked for the Bank of England and the FSA for some 28 years. She was offered a very highly paid job with a bank, as one would expect—we all expect bankers to be offered higher salaries than public sector workers. When she worked out the cost implications of moving from her job, with 28 years of a final salary pension, compared with what she would have to be paid by the bank to come anywhere close, she was somewhat crest-fallen to realise that in the longer term she would be taking a pay cut. That illustrates the competitiveness issues raised by how much we have in our pension schemes.

Mr Graham Stuart: In areas such as Wales and the north of England, where the discrepancy is particularly notable, small businesses and enterprises need people but they are struggling to recruit because of the level of salaries in the public sector. If we are to rebalance the economy, we need to make sure that our dynamic small businesses have equal and fair access to the labour market.

Jackie Doyle-Price: That is absolutely true. It is not very good for growth and competitiveness if we are pricing growing businesses out of the market simply because they cannot afford to recruit staff at sustainable levels.

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The motion refers to the reports by the National Audit Office and the Public Accounts Committee. I am a member of the Public Accounts Committee. While it is true that we were pleased that the reforms introduced by the previous Government were moving in the right direction, we were not satisfied that they were sustainable in the long term. The NAO would not be drawn on that specific issue, because it recognised that it was a political decision. The PAC said that the Hutton commission provided the opportunity for the Government to develop a clear strategic direction for public service pensions and that we looked forward to those detailed proposals. The Public Accounts Committee report was therefore much more sympathetic to the Government’s approach than is indicated in the motion.

That said, the Committee did express concerns about pension reform. We expressed concern over its impact on staff morale. It would be helpful if employers and trade unions worked more collaboratively to address that. Sadly, that has not been the case to date. We also expressed the opinion that many employees did not understand the value of their pensions as part of their reward. If the colleague I mentioned earlier, who worked in financial services, did not understand the true value of her pension pot, God help any other public sector worker.

We must ensure that we do not discourage people from saving for retirement. I therefore welcome the Government’s decision to exclude the lower-paid from any increases. Obviously, 15% of salary is a lot—

Madam Deputy Speaker (Dawn Primarolo): Order.

2.29 pm

Mr Brian H. Donohoe (Central Ayrshire) (Lab): I thank Plaid Cymru and the Scottish National party for securing this debate and for ensuring that the damaging pension plans continue to be at the top of the political agenda.

As the Minister said, the SNP had choices. In relation to the final part of the motion, the SNP gave away its choices in refusing the opportunity that it had in the Scottish Parliament to vary taxes by 3p. If it had accepted the need to continue with that, it could have used it towards the contributions that are required. There has been a lot of talk and nonsense about that from Members who have now left the Chamber. They know full well that that is the case.

Dr Whiteford: It sounds as though the hon. Gentleman is proposing that we increase taxes in Scotland to pay for pension increases. Is that really what he means?

Mr Donohoe: We live, at this stage, in the United Kingdom. If the SNP is suggesting that Scotland has a different set of circumstances for pensions than England or Wales, there is something wrong with the system. We live in the United Kingdom and SNP Members have to accept that. I have more in common with a joiner in Newcastle than with the director of the Royal Bank of Scotland. That is the way that SNP Members should think as well. They had choices and they denied themselves the opportunity to make them.

This matter affects many of my constituents. My constituency has 4% more public sector workers than the United Kingdom average. Some 39,300 of my constituents work in the public sector, about two thirds

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of whom are women. The pension proposals will affect women more than men, because they are the lower-paid in society.

Mel Stride: As Christmas approaches, could the hon. Gentleman find it in his heart to congratulate the Government on taking more than 1 million low-paid workers out of tax altogether, many of whom are exactly the women he describes?

Mr Donohoe: I do not accept that at all. This Government have put up VAT, which is affecting all the low-paid people across the country more than it is the likes of the hon. Gentleman. He should not delude himself that the situation is different.

My mind has been taken away from this subject over the past week, because young Jack Samuel Donohoe, my second grandchild, was brought into this world at five past 12 on Monday. Jack, his mother Pauline and his father Craig are all doing very well. I mention that only because when my first grandchild was born about three weeks ago, I mentioned it in a debate and I felt that it was only right to mention the second.

Madam Deputy Speaker (Dawn Primarolo): Order. I am sure that the hon. Gentleman will use that point to talk about how long we are all living and return to the motion.

Mr Donohoe: I am grateful to you, Madam Deputy Speaker, for that guidance. I am sure that that is what I was about to say. In about 70 years, my grandchildren will collect their first pension. I want it to be a decent pension, regardless of whether they are in the public sector or the private sector.

At the age of 22, I first became involved in pensions as a trustee of the pension scheme at the Ailsa shipyard where I worked. I have always had an interest in pensions as a result. Many people do not have a clue about pensions. I have always accepted that a pension is deferred income. My pension is part of my income, and pensions are the income of every person who contributes. It is income that this Government are taking from individuals. I know that and other hon. Members should know it.

Guto Bebb: I find the hon. Gentleman’s arguments very interesting. If pension contributions are deferred income, is not the disparity between pay in the public sector and the private sector in Wales even more scandalous?

Mr Donohoe: The hon. Gentleman obviously does not understand what I have just said. It is clear that most people do not understand that pension contributions by an employer are deferred income. They are part of a person’s income and should be treated as such regardless of whether they are in the private or public sector. That should be known to everybody.