House of Commons
Tuesday 20 December 2011
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
business before questions
London Local Authorities Bill [Lords] (By Order)
Further consideration of Bill, as amended, opposed and deferred until Tuesday 17 January (Standing Order No. 20).
London Local Authorities and Transport for London (No.2) Bill [Lords] (By Order)
Transport for London (Supplemental Toll Provisions) Bill [Lords] (By Order)
Second Readings opposed and deferred until Tuesday 17 January (Standing Order No. 20).
Oral Answers to Questions
Deputy Prime Minister
The Deputy Prime Minister was asked—
The hon. Gentleman will know that we plan to bring forward our proposals for consultation in the new year, and this will no doubt be one of the subjects on which we will seek and receive views.
That was a very contrived question. Our proposals on lobbying are very sound. On the European question, I think that the general public agree with what my right hon. Friend the Prime Minister did. There is no conflict between standing up for Britain and ensuring that we are involved in every meeting in Europe and fighting for British interests. We saw the outcome of that in yesterday’s excellent statement on the Fisheries Council.
Section 8.16 of the 2005 ministerial code required Ministers to record specific details of meetings with outside interest groups, including lobbyists. Does the Minister agree that reinstating that requirement would be a positive move for lobbying transparency, and that it was a mistake for the then Prime Minister to get rid of it in 2007?
I thank the hon. Lady for her question. She will know that we have made some changes to the ministerial code. For example, when Ministers in this Government leave office, they will not be allowed to lobby the Government for two full years afterwards. That is a new proposal that was not in place under the previous Government. If it had been, they might not have had some of the problems that they did.
I note what the Minister says about the Government’s plans to bring forward proposals for a register of lobbyists, but I want to ask the Government whether they work to the Buddhist calendar. On 2 November, he stated that the Government would publish their proposals before the end of November. Can we take his announcement today any more seriously than that one, or should we take all Government announcements with a large pinch of seasonal salt?
The hon. Gentleman and his party ought to be a little careful on this subject. We are not going to take any lessons from them, because they did absolutely nothing about this for 13 years. As my right hon. Friend the Prime Minister said last week, when we bring forward our proposals early in the new year, we will have done more on this in 18 months than the Labour Government did in 13 years.
No one would disagree that there should be no place in this building for improper access or influence; that is obviously the case. Does the Minister agree, however, that there is a problem of definition? Perfectly legitimate charities and other organisations are lobbyists, even though they are not paid to lobby and do so on their own behalf. Will he therefore be careful about defining precisely what a lobbyist is, and take care not to throw the baby out with the bathwater?
My hon. Friend makes a good point. Our constituents lobby us every day of the week about legitimate issues, for example. We must be careful to take these matters forward sensibly, which is why we are going to bring forward our proposals for consultation to ensure that we get this right and that we do not inadvertently stop our constituents and others raising important issues with us.
Electoral Registration (Armed Forces)
We are committed to helping service personnel to register and cast their votes. Service voters who are on the register before the move to individual electoral registration will remain registered until their service declaration expires, up to five years later. We also plan to extend the administrative timetable for UK parliamentary elections, which means that there will be a lot more time for service voters to return postal votes from overseas. We will also make it easier for them to apply for a proxy vote if they are deployed at very short notice before an election.
I thank the Deputy Prime Minister for that answer. The number of service personnel serving abroad who were registered to vote increased from about 36% in 2005 to 48% in 2008. At the last general election, in 2010, there were only 294 proxy votes and 240 postal votes from the 9,000 members of the armed forces based in Afghanistan. What is the Deputy Prime Minister going to do to ensure that the speed at which he is moving on this issue does not isolate our armed forces in Afghanistan?
First, let me pay tribute to the previous Government for the very good work done to help servicemen and women in Afghanistan to make sure that they can participate fully. There was a real step change there, and we have continued with that for the elections of May this year. Registration levels seem to be improving. A survey conducted last year by the Defence Analytical Services Agency indicates that 75% of service personnel are registered to vote, which is well up on the figures of a few years before. We are moving in the right direction, but we will, of course, continue—not least by taking the measures I mentioned—to improve it further.
What plans does the Deputy Prime Minister have to extend the time between the close of nominations and polling day to enable long-distance postal voters, such as our loyal servicemen and women in the armed forces, to cast their ballot?
We are indeed lengthening the timetable for UK parliamentary elections from 17 days to 25 days, which gives us just over an extra week to allow people overseas—whether they be in the armed services or elsewhere—to return their postal votes in good time.
3. What discussions he has had with the Secretary of State for the Home Department on the potential effects of an incomplete electoral register on tackling crime. (87253)
I have had no specific discussions with the Home Secretary on this issue. As the hon. Gentleman knows, the Government are doing everything they possibly can to ensure that the register is as accurate and complete as possible, which will continue to deliver benefits—not just for elections, but in helping to tackle crime.
We are not removing the civic duty, as I think the hon. Gentleman knows. It is not an offence at present not to register to vote. We are maintaining the offence that is on the statute book whereby there is an obligation for people to provide information about voters in their household. That is being kept intact. As to the hon. Gentleman’s first point about the link between the register and crime, the Credit Services Association recently supported the move towards individual electoral registration, saying:
“We believe that the proposed approach will lead to a reduction in financial crime, in particular fraud. In our view any proposal that will result in a reduction of financial crime is to be welcomed.”
As I mentioned, the Government have published draft legislative provisions to extend the timetable for UK parliamentary elections from 17 to 25 working days. As I said, that will have real benefits for overseas electors and service personnel stationed outside the United Kingdom. We are also looking specifically at the best way to make improvements to the current voting arrangements for service personnel serving overseas.
I am pleased that the Deputy Prime Minister recognises the efforts made by the previous Government to encourage servicemen and women to register to vote. What he should be looking at, however, is whether those people could vote by internet. Most have access to it—at Camp Bastion and other bases around the world—so this would increase participation.
It is always worth looking to see whether we could use or deploy e-voting. As the hon. Gentleman probably knows, it poses some serious security issues. It has been looked at in the past and we will continue to look at it. The hon. Gentleman shakes his head, but most people who have looked at internet voting feel that there is a real issue about whether it can be done in a secure and safe way. As I say, we will continue to look at it.
Gurkha soldiers have had their terms and conditions improved vastly in recent years, but while they fight and die for this country they do not have the opportunity to vote in our parliamentary elections. Will my right hon. Friend investigate whether this can be corrected?
I hope that the Deputy Prime Minister is not tempted to do away with proxy votes, given that he is lengthening the time between the close of nominations and elections. It is not just servicemen or overseas voters but my constituents who work offshore for whom postal voting is not an option, and they really do need a proxy vote.
I strongly agree. In fact, we are seeking to accelerate the provision of proxy votes for those who are deployed briefly just before a general election, so that servicemen and women who are deployed at short notice are not caught out by the rules and can use proxy votes.
6. What discussions he has had on the definition of lobbying. (87256)
I refer the hon. Gentleman to my answer to question 1.
If I remember rightly, that was proposed by my Liberal Democrat colleagues when they were in opposition, and the entire parliamentary Labour party voted against it, including, I suspect, the hon. Gentleman. If he will be a little patient and wait for our proposals in the new year, he will be able to satiate his curiosity.
I hope that, in defining lobbying, the Minister will recognise that it is a perfectly traditional means of trying to ensure that a good Bill is passed. Some of the worst Bills have been passed when both the main parties have agreed. Will the Minister also ensure that any lobbying by a particular trade union will fall within the definition?
I am yet to present a Bill that has had the support of both the Government parties and the Opposition, and I look forward to the opportunity to do so. However, my hon. Friend has made an important point. Lobbying—in other words, the setting out of concerns by businesses, charities, and our constituents—is a perfectly sensible activity. Indeed, legislation is worse when we do not listen to the outside world, and we do not want to damage that position. I hope that when we present our consultation paper, my hon. Friend will find it acceptable. We look forward to what she, and other Members in all parts of the House, have to say about it.
Individual Electoral Registration
I do not expect our proposals for individual registration to have any effects. As I have said from the Dispatch Box on many occasions, we are as focused as ever on accuracy and completeness, and I therefore do not expect the new arrangement to cause any problems for the boundary review. We are working incredibly hard to ensure that the 2015 register will be in good shape.
That study was, of course, paid for by the Government, because we wanted to find out what state the electoral register was in before introducing individual electoral registration. It suggests that those who complacently thought that the register was already in good shape may need to think about that a little more, and also that our proposals, which include data matching and improving registration, are urgently required and will make the register better.
House of Lords Reform
A Joint Committee of both Houses is currently scrutinising the Government’s White Paper and draft Bill, which we published last May. The Committee is making good progress, and today the other place is debating a motion proposing an extension enabling it to report by 27 March next year.
Does the Deputy Prime Minister agree that if we have an unreformed and larger House of Lords and a smaller House of Commons in 2015, with the payroll vote constituting a larger percentage, it will be a huge step backwards for democracy in this country? We cannot take an à la carte attitude to constitutional reform.
I do not think that there is anything à la carte about the White Paper and the draft Bill and the scrutiny to which they are being subjected by a Joint Committee. Indeed, I do not think that there is anything à la carte or arbitrary left in a debate that has been raging for more than 100 years. I think that it would be a big step forward for democracy if we were finally to secure elections to a Chamber which, let us remember, makes the laws of this land, but is as yet not directly legitimate and accountable, through the ballot box, to the people of this country.
May I ask the Deputy Prime Minister for some clarity on his party’s views on House of Lords reform? If he is able in this Parliament to get his proposals through for a second Chamber that is 80% elected with peers serving one term of 15 years, will his party still want in a future Parliament to remove the remaining 20% of appointed peers and bishops so that we have a fully elected second Chamber?
The Deputy Prime Minister will be aware that the greatest barrier to reform of the other place exists in the other place. Will he be prepared to use the Parliament Act, if necessary, to drive through this very important reform and to bring greater democratic accountability to the democratic process?
As the Prime Minister himself has said, the Government will support this Bill as they support any Bill. That is in the coalition agreement: there is an unambiguous commitment that we will pursue this Bill as forcefully as we can. That means that the Parliament Act would be invoked in the normal way, if it were to come to that, but I hope that it will not. I hope we will be able to build consensus across all parts of the House in favour of meaningful reform. That is precisely why the work of the Joint Committee, which will report by the end of March next year, is so important.
Is not the Deputy Prime Minister just rushing in again, rather than waiting for the House of Lords Joint Committee to report? He is already giving us his opinions on what he is going to be doing. Why does he not wait for the Joint Committee to publish its report before giving us his opinions on it?
I cannot hide my opinions about reform of the House of Lords. It has been debated for well over 100 years. We have been perfectly open about this. We have published a White Paper, which was generated in part by discussions involving input from all major parties in the House. We have left a number of options open in that White Paper, including whether we should have 100% or 80% directly elected and the precise method of election. I hope the Joint Committee will be able to shed some light on those issues when it reports at the end of March next year.
My own view is reflected in the coalition agreement, where this issue is among a number of others on which the coalition parties make an explicit agreement to disagree. That is because of a philosophical difference. I believe the state should be cautious about seeking to use the tax system to encourage people to take what, at the end of the day, are very private and emotional decisions about whether or not they should get married.
“we must do everything we can to avoid a great big split in the European Union…That’s bad for jobs and growth in this country.”
That is what the Deputy Prime Minister said before the European summit. We now have a great split. Does he think the Prime Minister was right to put party interest before national interest?
I am not going to rake over the results of the summit. The crucial thing is what we do now as a country, and on that issue there is absolutely no difference between the Prime Minister and myself or the two coalition parties. We are totally committed to full engagement in the European Union. Why? Because, as some business leaders set out very clearly in a letter this morning in The Daily Telegraph, 3 million people’s jobs directly depend on our place in what remains the world’s largest borderless single market, in our European backyard.
The Deputy Prime Minister cannot answer a simple, straightforward question. I will give him a chance again: does he think the Prime Minister was right?
The Deputy Prime Minister has also said that the Prime Minister’s actions at the EU summit have left the UK in an “isolated position”. As you will be aware, Mr Speaker, the justification the Liberal Democrats give for propping up this Conservative-led Government is to act as a restraining influence. Well, they have failed on tuition fees, they have failed on legal aid, they have failed on the NHS, and now they have failed on Europe. Does the Deputy Prime Minister believe that the Prime Minister should re-enter negotiations and get a better deal for Britain? If he does, what is he doing about it?
The right hon. Gentleman refers to the reasons why this coalition Government were created—it was to clear up the mess that his party left behind. It is not easy, what we are doing, but it is right. At the beginning of this year, his party had nothing to say about the economy—[Interruption.]
T2. Members on both sides of the House are very concerned about the implications for local communities and community cohesion of the initial proposals from the Boundary Commission. Although I recognise the importance of getting the numbers between constituencies relatively similar, community cohesion is also really important. Will the Deputy Prime Minister reserve the right not to support the Boundary Commission proposals if they are considered against community— (87267)
As the hon. Gentleman knows, the whole system has been devised so that it is not in the gift of politicians, still less the Government, to draw lines on the map to decide where these new boundaries are set; that is for the independent boundary commissions. There is a process of consultation and appeal, which is now ongoing. But I am glad he recognises that the principle is a perfectly valid one: that people’s votes should be worth the same weight and esteem, wherever they live in this country.
T4. Wiltshire schools have long felt short-changed by funding allocations for education, so they will welcome the doubling of pupil premium moneys for our schools in Wiltshire to more than £5 million next year. Now that Labour councillors in Manchester have voted for the pupil premium to be scrapped, will the Deputy Prime Minister consider giving our schools next year some of the more than £80 million of pupil premium that their council has rejected? (87269)
The pupil premium, which by the end of this Parliament will be £2.5 billion of extra money to help schools that are educating children from the most challenging backgrounds, is a very powerful, progressive policy, and I am very proud that we have delivered it, as a coalition Government. We have been searching in vain for months to find out what the Labour party would actually cut in public expenditure. Now, we have the answer: Labour councillors want to cut the pupil premium that benefits some of the most deprived children in this country. That is progressive politics for you!
T3. Eighteen months ago, the Deputy Prime Minister and the Foreign Secretary went together to Germany, and they were met by the right-wing Liberal Foreign Minister of Germany, Guido Westerwelle, who was quoted as saying that he was pleased to meet his “closest friends” and “fabulous partners”. The German Foreign Minister was in Britain this week. Did he meet the Deputy Prime Minister and the Foreign Secretary together here, and did they discuss whether they are still the closest friends and partners? (87268)
The hon. Gentleman wants to know whether we met in the same room or not. Okay, we did not; we met separately. Hold the headlines, “Foreign Secretary and Deputy Prime Minister have separate meetings”. Honestly, he is really scraping the barrel. We all agreed, as I explained earlier to the over-excitable right hon. Member for Tooting (Sadiq Khan), that it was very important that Germany and Britain should work together on deepening and widening the single market, and on promoting competitiveness and growth, upon which the jobs of millions of people depend in this country and elsewhere in Europe.
This is not something that has been looked at as closely as my hon. Friend would perhaps wish. We have set out our ideas in the White Paper. As I said earlier, they are now being subject to scrutiny by the Joint Committee, and the Government will make their final views known shortly thereafter.
T5. Does the Deputy Prime Minister agree that any future referendum held in the United Kingdom or in any part of it should be carried out under the supervision of the Electoral Commission? If so, what is he going to do to ensure that? (87270)
T11. Will the Deputy Prime Minister join me in welcoming the agreement between the Government and the trade unions on public sector pensions? It shows that the Government have been prepared to listen and negotiate successfully with trade unions to get a deal that is fair for everyone? (87278)
My right hon. Friend the Chief Secretary to the Treasury will be giving a statement on this matter immediately after Question Time. I am very pleased that a heads of agreement has been reached between the Government and trade unions under all four schemes, not only because it ensures the Government’s objective of putting public sector pensions on to a financially sustainable footing, but, much more importantly, because it means that millions of people working in the public services, whether in our schools, in our hospitals or in local government, will now be assured, at a time of great uncertainty, that they will have among the very best pensions in this country for years and years to come.
T6. I want to ask the Deputy Prime Minister about his new year’s resolutions. The Leader of the House has reminded all Ministers of the following:“When Parliament is in session the most important announcements of Government policy should be made, in the first instance, to Parliament.”—[Official Report, 5 December 2011; Vol. 537, c. 73.]Given that, and given that the Deputy Prime Minister is one of the worst offenders, will he make it his new year’s resolution to behave himself in future? (87271)
T12. Will the Deputy Prime Minister confirm that if charities are to be covered by the register of lobbyists, their donors will be properly protected, because many give anonymously for very good reason? (87279)
As the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper) explained earlier, the consultation will be published in the new year. I hope that my hon. Friend the Member for Carmarthen West and South Pembrokeshire (Simon Hart) will find satisfactory answers to his questions in the course of that consultation.
T8. Returning to the issue of electoral registration, does the Deputy Prime Minister believe that the proportion of the population registered to vote will be as high or higher at the end of the individual registration process as it is now? (87274)
Of course we will work very hard to make sure that that is the case. The hon. Lady will know—this is a source of concern for everybody—that, because of research that the Government commissioned from the Electoral Commission, the latest statistics show that about 85% to 87% of people were registered on the electoral register as of last December, which compares with about 93% to 95% 10 years earlier, in 2000. So something went dramatically wrong in the last decade when her party was in government; more and more people fell off the register. Our register is now roughly at the same level of completeness as that in Northern Ireland, which is why we must all work together to make sure that we get the details on individual electoral registration right.
I wish the Deputy Prime Minister a merry Christmas, but if the Prime Minister was killed in a terrorist attack, who would take charge of the Government? Will the Deputy Prime Minister confirm that it would not be him, as he leads a party that has less support than the UK Independence party?
I receive the hon. Gentleman’s season’s greetings in the spirit in which they were intended. As he knows, appropriate arrangements would be made in that very unfortunate event. I must say, however, that his morbid fascination with the premature death of his own party leader is a subject not for me, but for the Chief Whip.
T9. Senior high school pupils have just three and a half weeks remaining to submit their applications for university. Does the Deputy Prime Minister think that applications will rise or decrease, given his broken promise on introducing £9,000 tuition fees? What impact does he think that will have on social mobility? (87276)
What I, of course, hope is that as people focus on the reality and substance of the new system rather than the misleading polemic about it, they will come to appreciate that at the moment thousands of students on part-time courses, under the system introduced by the hon. Gentleman’s Government, pay fees as students whereas under the new system no student will pay a penny of fees at all while they are studying at university. The method of repayment, which is in effect a form of time-limited graduate tax, is more progressive, not less, than the more regressive system that it seeks to replace.
According to The Mail on Sunday, MPs are on day five of our holiday. Does the Deputy Prime Minister agree that the statutory register of lobbyists ought to include a strict overview of a very shadowy organisation that puts itself forward as the TaxPayers Alliance?
My experience is that one should not believe much that one reads in the Daily Mail and The Mail on Sunday. The key point is that the consultation on the register of lobbyists will be issued in the new year, and will seek to define what we mean by lobbyists and the rules that will then be applied evenly to all kinds of lobbyists.
T10. We understand that the Deputy Prime Minister has been given responsibility by the Prime Minister for rebuilding bridges with our European partners. Will he tell the House how he intends to go about fulfilling that responsibility? (87277)
I can tell the hon. Gentleman one way in which I think it is incredibly important that we as a country should show leadership. On 27 January, there will be a European Union summit of all European Union countries aimed precisely at, in my view, the most important issue of all, which is how we boost competitiveness and growth within the eurozone and across the European continent. We, as a coalition Government, will come to that summit with some bold ideas about how we can increase growth, increase competitiveness and increase employment across the European Union and—yes—we will stay until the end.
In September last year, the right hon. Gentleman told the House:
“We promised a new politics. Today is the day we must begin to deliver on that promise…We must put people back in charge.”—[Official Report, 6 September 2010; Vol. 515, c. 44.]
Why was that true for the doomed referendum on the alternative vote but not for the public’s view on Britain’s relationship with the EU?
As he knows, we have legislated to make it quite clear—the Foreign Secretary has pioneered and led on this legislation—that if there were to be a major transfer of power from this House to Brussels and from the UK to the EU, there should absolutely be a referendum. We are the first Government to have guaranteed to the British people that if we give up more power to the EU, they will have their say. I do not think we could be more crystal clear than that.
The Deputy Prime Minister said earlier that there was no criminal sanction on individuals if they failed to register to vote. The only reason that is so is that the obligation rests on the householder, on whom there is a criminal sanction. Does the Deputy Prime Minister accept that as we move towards individual registration, Ministers must reconsider the proposal to allow opting out without any criminal sanction whatsoever?
I made it clear to the House on a previous occasion that we accept the arguments against providing an opt-out, and we will reflect that in the final legislation. On the quite tangled issue of what is, and what is not, an offence, the right hon. Gentleman is quite right that at the moment the offence applies not to registration, but to the provision of information on behalf of a household—in other words, to the obligation to provide information about other people in the household. It is not an offence at the moment not to register. He makes a valid point that is a valid subject for debate, and it was raised by the Political and Constitutional Reform Committee: under individual electoral registration, the obligation clearly falls more squarely on the individual, rather than on the so-called head of the household. We think that we need to proceed very carefully when it comes to creating new offences in this area, but we are, of course, prepared to listen, and will continue to do so.
Will the Deputy Prime Minister welcome the remarks made by our fellow member of the European Liberal Democrats, Herr Westerwelle, who said that Britain would still be welcome at the very heart of European economic decision making, and that some of the concerns that we raised at the Brussels summit could still be addressed?
I strongly agree that the decisions taken at last week’s summit were, at the end of the day, all about the fiscal and budgetary rules that accompany a country’s membership of a currency union, but that does not, and will not, exclude our country from having the ability to continue not only to participate in, but to play a leading role in shaping policy and debates on the wider economic reform of the European Union as a whole. That is what we intend to show in the weeks and months ahead.
What will the Deputy Prime Minister say over the Christmas period—I hope that he has a very good Christmas—about the many people in our country who are unemployed? A million young people, and many thousands of young graduates, are unemployed. What new thing can he whisper into the Prime Minister’s ear so that we get this sorted?
First, I hope that people will be increasingly informed about the details of the youth contract, which will start in April next year—a new billion-pound programme that will provide 250,000 work experience places to any 18 to 24-year-olds who want to take part in a work placement scheme. It will also provide a new subsidy, worth about half the basic wage, to thousands of young people who are seeking employment. The key thing is that from April next year, under the youth contract, every single 18 to 24-year-old who cannot find work will have the opportunity to earn or learn.
May I return the Deputy Prime Minister to the issue of Lords reform? Like him, I support a 100% elected House. Often, when I read the deliberations of the Joint Committee on House of Lords Reform, I am concerned that there is a very negative view coming forward from a variety of Members. Does he have any view on the fact that a consensus is perhaps emerging, which might speed the passage of legislation?
I cannot find my notes on the latest social attitudes survey, which was published recently, but in it, public opinion was very clear: only 6% of the members of the British public surveyed supported the status quo—an unelected House of Lords. The vast majority wanted the House of Lords to be fully elected, partially elected, or even abolished. As for those who say that the issue is a minority distraction, I totally accept that there are many more important things weighing on people’s minds at the moment—not least jobs, unemployment, and growth in our economy, which remains our absolute priority—but the vast majority of people, when they stop and think about it, want a reformed House of Lords.
The Attorney-General was asked—
European Court of Human Rights
Does the Attorney-General agree that the European Court of Human Rights and the European convention on human rights are very important safeguards of the rights and liberties of people all over the Council of Europe area, and that any diminution of British participation or support, or acceptance of the Court’s rulings, would be damaging to the human rights of people in this country and would, of course, diminish the value of the Court, which is one of the great achievements of post-war Europe?
I entirely agree with the hon. Gentleman that both the Court and the convention are of great importance to the United Kingdom, and I also agree that it is important that the United Kingdom should play a full part in the work of the convention and the work of the Court. As the hon. Gentleman will be aware, we currently have the chairmanship of the Council of Europe, and during that time we are seeking to take forward and implement a reform programme for the Court which will enhance its efficiency and effectiveness and particularly enable it to address the vast backlog of cases that it is facing.
Will Ministers seek to make allowances for Council of Europe members with strong legal traditions to ensure that the Court is an effective functioning court in which gross abuses of human rights do not wait in long queues behind cases that do not raise such important general principles?
Yes, the right hon. Gentleman is absolutely right about what we should be seeking to achieve. I can assure him that in trying to achieve our aims in the course of our chairmanship, we are looking very much to diplomatic initiatives which will bring us together with other partner states in carrying this agenda forward. We certainly cannot do it on our own, and the success of our initiative is entirely dependent on taking the other member states with us. I entirely agree with the right hon. Gentleman that the backlog of the Court is a serious issue. It means that people are waiting years simply to receive a five-line letter saying that their claim is non-admissible. That is deeply unsatisfactory, and at the same time admissible claims are taking a very long time to be heard.
I wish Ministers well in their work in trying to reform the Court, but is it not a fact that more than 100,000 of the backlog cases come from one country, Russia, because there is no rule of law and no confidence in courts there at all? So has the time come to consider seriously whether we should ask Russia to leave the Council of Europe until such time as its domestic legislation meets some of the minimal obligations of membership?
Membership of the Council of Europe and whether a country is excluded is not a matter for the United Kingdom on its own. The object of the convention is to improve standards throughout member states which are signatories. In fairness, the right hon. Gentleman may well accept that despite difficulties in many areas and with certain countries, standards are progressively being raised. Whether the backlog coming from Russia is quite as high as the right hon. Gentleman says I am not sure, but I think we can say that Russia makes a substantial contribution to the number of pending cases.
The current backlog stands at something of the order of 165,000 cases, and 127,000 of those, as I understand it, come from Russia. Given the proposals from the right hon. and learned Gentleman and the Justice Secretary for dealing with the reforms to the European Court, can he give the House some idea of how long that backlog will take to deal with?
Much depends on the outcome of the reform package that we might be able to implement. There are a number of things that need to be done. First, a very large number of those cases among the total of 165,000 are non-admissible. It is a question of processing them so that the individuals concerned can be told that their cases cannot be heard and the reasons for that. When it comes to the admissible caseload, the issue for the future—clearly, we have to clear the backlog—centres on subsidiarity and the extent to which the Court relies on national courts which are correctly implementing the convention to provide the solutions. This is one of the challenges, and in doing that we also have to recognise that for many countries the right of individual petition is very important.
Corporate Deferred Prosecution Arrangements
I have had a number of discussions with the director of the Serious Fraud Office about the potential benefits of introducing corporate deferred prosecution agreements. A great deal of very positive progress on this ongoing work has occurred in the past few months among the Law Officers Department and also the Ministry of Justice.
I hold regular meetings with the director of the Serious Fraud Office where we discuss all aspects of the SFO’s work, including the need for further legislation to address economic crime, such as on deferred prosecution agreements.
I wonder whether the Attorney-General has read the speech given by the director of the Serious Fraud Office, Richard Alderman, to University college London? In that speech he said:
“One suggestion that I have is whether the time has come for us to recognise that recklessly running a financial institution may be a ground for criminal liability.”?
Does the Attorney-General agree with him?
As the hon. Lady will be aware, under the Bribery Act 2010, for example, the reckless running of a financial institution can already constitute a criminal offence. Whether that should be extended further in respect of corporations is a matter that the Government would have to consider carefully, as would the House.
The Attorney-General might be aware that one of the areas of economic crime where legislation might be lacking relates to the financial crisis. Will he advise the House on whether his conversations have included or will include the potential for investigation of the tax affairs of chief executives and directors of failed financial institutions?
That would normally be a matter for Her Majesty’s Revenue and Customs, not the Serious Fraud Office. However, the position of any prosecutorial authority is clear: if there is evidence of criminal conduct, it is in the public interest that it should be stopped and that those engaged in it should be punished if found guilty.
If the Attorney-General has not already done so, will he discuss with the Serious Fraud Office the possibility of bringing prosecutions arising out of the collapse of Farepak five years ago, when 120,000 people lost £38 million? If that is not possible, will he see whether it is possible to make legislative change to ensure that it does not happen again?
Such legislative change is a matter for another Government Department. On the question of prosecutions, I am not in a position to comment on an individual case. If the hon. Lady wishes to bring further details to my attention, I will certainly ensure that they are passed to the director of the Serious Fraud Office.
If a matter that requires investigation is brought to my attention and to the attention of the Serious Fraud Office, the Serious Fraud Office or other prosecutorial authorities will investigate it. The fact that there may have been a financial collapse does not necessarily mean that criminal offences have been committed.
Tax evasion and tax fraud cost the Exchequer billions every year. If the Government are serious about reducing the deficit, would they not do better by chasing the tax evaders and tax fraudsters, rather than sacking public service workers and cutting public services?
Undercover Police Operations
I have no plans to conduct such a review. The Director of Public Prosecutions is taking action to improve how the Crown Prosecution Service deals with cases of this kind following the recent independent inquiry by the right hon. Sir Christopher Rose into the Radcliffe-on-Soar power station protest cases.
The Director of Public Prosecutions has agreed to adopt the recommendations made following the recent independent inquiry by Sir Christopher Rose, which state that explicit guidance should be included in a prosecution team disclosure manual. The DPP has also confirmed that specific training on the proper handling of cases involving undercover officers will be given to all senior lawyers in the Crown Prosecution Service’s central casework division and complex casework units and to the chief Crown prosecutors and any CPS staff who chair case management panels. Relevant guidance is already available to CPS lawyers on their obligations under the Criminal Procedure and Investigations Act 1996 and joint working will take place with the police to ensure that everyone understands where their responsibilities lie in the matter.
On the issue of disclosure, will my right hon. and learned Friend ensure that he or the CPS thoroughly look into the circumstances in which a major and costly criminal trial involving allegations of police corruption collapsed recently in the Crown court at Swansea in order to ensure that lessons can be learned so that such mistakes relating to disclosure are not made again?
I can assure my hon. Friend that the Director of Public Prosecutions takes the collapse of that case very seriously indeed, and there will be internal inquiries and, I am sure, inquiries by the police into why it took place and the lessons that need to be learned from it. It is of course worth bearing in mind that, in terms of its history, it is very much a historic case, but that is no reason for any complacency about the lessons that we might be able to learn for the future.
I should really like to understand what happened to the evidence in the Babar Ahmad case and, specifically, why the CPS apparently gave it directly to the United States without considering it first. Ministers have refused my written question on the matter, saying that it would “prejudice…proceedings”, so will the Attorney-General explain why and tell us what bilateral agreements are in place to allow evidence gathered by UK police about crimes alleged to have been committed in the UK to be provided to the US authorities in cases considered for trial in the US, such as that of Babar Ahmad?
As the hon. Lady will appreciate, the case is live, and that is the reason—I have no doubt—why the CPS has been guarded about any response that it can give to her. She has raised a number of very specific questions, however, and I respectfully suggest that the best thing to do is for me to write to her and to try to answer the specific matters that she raised at the end of her question.
I have to try to work out where the right hon. Gentleman’s question is coming from, but the main complaint about the Babar Ahmad case is the length of time that it is taking. As he will be aware, proceedings started on 5 August 2004, and in this country proceedings, including the refusal of leave to appeal to the House of Lords, were completed on 6 June 2007. The problems and delays since then are in fact due to the European Court of Human Rights, and that ties in with my answers to earlier questions about the inordinate length of time that it takes to bring such cases to the European Court of Human Rights—with consequences, in the case of Babar Ahmad, that are plainly undesirable.
The Attorney-General may have read on 11 December in The Sunday Times, as I did with some interest, that the Government will be
“asking British magistrates to examine detailed evidence involved in each case”
and bringing forward plans to allow judges
“to order a trial in Britain if they considered it would serve justice better.”
Given that the House is committed to reforming extradition, are those the sort of changes that we are to expect, and when are we going to hear about them officially?
As the hon. Lady appreciates, the Home Office leads on the question of extradition. I indicated when I last took questions that the Government take the view that, first, they need to study the Scott Baker report, which they are doing, and then they will come to the House with proposals. I hope that that will be as soon as possible. In the meantime, I suggest to her that speculation in The Sunday Times is not always the best indication of Government policy.
Domestic Violence (Legal Aid)
Does the Attorney-General agree with the Under-Secretary of State for Justice, the hon. Member for Huntingdon (Mr Djanogly) that a woman who has reliable eye witnesses, police and medical evidence, photos of injuries, has fled to a refuge and has a partner on a perpetrator programme should not receive civil legal aid to help bring her abuser to justice? If not, what will the Attorney-General do about it?
Will my right hon. and learned Friend confirm that the Government intend to waive the financial eligibility limits in cases whereby a person applies for an order for protection against domestic violence, such as a non-molestation or occupation order?
In view of the anxiety that there will be fewer prosecutions of people responsible for domestic violence as a result of these changes, will the Attorney-General agree to report to the House, a year after the changes have come in, on the number of prosecutions before and after the changes?
I appreciate the hon. Lady’s point, which is an important one. It is the view, and certainly the policy, of the Crown Prosecution Service that it will continue to prosecute cases of domestic violence and to give them a high priority, as I have said in this House on several occasions before. I would be very concerned if any of the other changes taking place in civil legal aid were to have an impact on that, but I have no reason to suppose from my discussions with the Director of Public Prosecutions that that is the case. The emphasis on prosecuting domestic violence remains a top priority for the Crown Prosecution Service.
In so far as somebody may be a victim, they do not need legal aid. My hon. Friend will be aware that for victims of human trafficking who, in the course of human trafficking, may have technically committed offences, there is a protocol in place to ensure that they should not be prosecuted without very good reason. From that point of view, I do not see, in terms of my responsibilities for criminal justice, that their needing legal aid as victims comes into it.
Specialist Domestic Violence Courts
Evaluations of specialist domestic violence courts in 2005 and in 2008 clearly demonstrated that SDVCs involving specialist domestic violence support services have contributed to improving prosecution rates as well as safety for domestic violence victims. There have been no further assessments since 2008.
County Durham achieved specialist domestic violence court status in 2006, since when there has been a huge increase in the number of successful prosecutions for domestic violence. These courts have not only brought more perpetrators to justice but have achieved more appropriate sentencing. What guarantee can the Attorney-General give that those very positive outcomes will not be put at risk by cuts to the court services?
First, I entirely agree with everything the hon. Lady said. I pay tribute to the previous Government for the emphasis that was placed on this area when the SDVC system was set up. Although there is a court rationalisation programme that will impact on SDVC provision in 21 court houses in 22 systems, all courts affected have received guidance and support to ensure a smooth transition so that the revised courts will be able to provide the same quality of service. That is a commitment that the DPP and the CPS take extremely seriously. I very much hope that although some courts will have to close, the quality of service that is available at the courts that are open and to which transfers of the work are made remains of the highest quality.
Police Charging Responsibilities
The transfer of charges from the Crown Prosecution Service to the police under the fourth edition of the DPP’s guidance on charging was completed in June 2011. The following charging responsibilities have now been transferred to the police from the Crown Prosecution Service: summary-only matters where a not guilty plea is anticipated; criminal damage offences under £5,000 where a not guilty plea is anticipated and can be tried summarily; and Fraud Act 2006 and handling offences where a guilty plea is anticipated. There are certain exceptions that must continue to be referred to the CPS, which is currently undertaking an evaluation of the transfer that is expected to be completed early in 2012.
No, it is not to save money. It was a question of whether the system could be operated more efficiently. Some anxiety was expressed when the pilots were commenced, but the evidence from the Crown Prosecution Service has overwhelmingly been that the system is working well. For that reason, we are happy to consider, on a pragmatic basis, rolling it out further. Ultimately, whatever charging decision is made, decisions on prosecution will remain with the CPS.
Before I ask my question, I should declare that I was employed by the Crown Prosecution Service many years ago, that I have been instructed by the CPS as an independent barrister and that I have a family member who works for the CPS. In my area, Greater Manchester police are closing their files management unit, which prepares files for the CPS, so that the officers can be put on the beat. Coupled with the devolved powers to police officers, that has led to a deterioration in the quality of the files that are sent by the police to the CPS. Because of this money saving by the police, the CPS has ended up spending more resources and personnel on sorting out these cases, which should have been dealt with properly by the police.
If what the hon. Lady says is correct, it should not be happening. If she would like to give me the details of the particular office where this is occurring, the best thing that I can do is to have it looked into and write to her. I accept that all transitions can cause problems, but the CPS is clear that the basis for allowing these changes to go forward is that they will improve efficiency.
Public Service Pensions
With permission, Mr Speaker, I would like to make a statement on the reform of public service pensions.
Seven weeks ago I reported to the House that in an effort to secure agreement, the Government were making a new offer to public service workers. Despite some unnecessary interruptions, scheme negotiators have been working hard to reach detailed heads of agreement by the end of the year deadline that we set. It has not been an easy task, but the Government have demonstrated that they will not shy away from taking difficult long-term decisions in the nation’s long-term interest.
We wish to see pensions for public service workers that are fair and sustainable, that provide dignity in retirement, and that are affordable for the workers and for taxpayers. That is why we committed in the coalition agreement to establish an independent commission to bring forward proposals for reform. Lord Hutton’s magisterial report did just that. We have stuck closely to the recommendations of the former Labour Secretary of State for Work and Pensions.
The case for reform is self-evident. The average 60-year-old lives longer now than in the 1970s. That means that people are living in retirement for longer. The life expectancy of a 60-year-old was 18 years in the 1970s; that has risen to 28 years today. As a result, the cost of public service pensions has risen to £32 billion a year—an increase of one third over the last 10 years.
We have already made some changes that deal with short-term pressures, including changing the basis of pension uprating to the consumer prices index and increasing member contributions by 3.2 percentage points, phased over three years. Those proposals are unchanged. Next year’s contributions increase is almost identical to that planned by the previous Government. The precise details of next year’s increase have been set out by Departments. All increases are tiered by income to protect the lower-paid. The Government will review the impact of next year’s increases, including on opt-outs and equality, before taking final decisions on how future increases will be delivered. Interested parties will have the opportunity to provide evidence and views to the Government.
I know that many Members of the House will be concerned about the pay and conditions of our armed forces. Let me be clear that members of the armed forces will continue to make no contributions towards their pensions and will be exempt from the increases announced at the spending review.
From the beginning of this process, we have committed to ensuring that public service pension schemes continue to offer a defined benefit pension that is based on the size of the worker’s salary and is not dependent on the market performance of a fund. That is not available to most people in the private sector. From the beginning, we have been clear that all accrued rights will be protected in full, and that the taxpayer needs to be properly protected from the risks associated with further increases in life expectancy by linking the scheme normal pension age to the state pension age. In November, we improved the offer to a 1/60th accrual rate, which is an increase of 8%. That is available only in the event of agreement being reached. We also agreed to protection for those who are 10 years from retirement.
I would like to pay tribute to the Minister for the Cabinet Office, the TUC and the scheme negotiators on both sides for their efforts to reach agreement. I am pleased to report that heads of agreement have now been established with most unions in the local government, health, civil service and teachers’ schemes. It will of course now be for union executives and memberships to decide their response.
The heads of agreement deliver the Government’s key objectives in full, and do so with no new money since our November offer. In future, scheme pension ages will match the state pension age and schemes will be on a career average basis; all the agreements are within the cost ceiling that I set in November, and will save the taxpayer tens of billions of pounds over the decades to come.
Because heads of agreement have been reached, the better offer that I made in November has been secured by trade unions for their members, including the “no change” guarantee for workers 10 years from retirement. The heads of agreement also deliver a number of the key objectives set out by the trade unions during the talks. Negotiations on them are now concluded, and we and the unions agree that this is the best outcome that can be achieved by negotiation. It is the Government’s final position, and we will bring forward legislation to the House in due course.
The full details of the heads of agreement in each scheme are today being set out in written statements by each Department. The key changes made are as follows. In the civil service, we have agreed to revalue each year’s contributions by the consumer prices index rather than earnings, allowing an accrual rate of 1/44th to be offered. That will cost the same as our original offer, but with a configuration preferred by the trade unions. As a consequence, the new scheme will be very similar to the Nuvos scheme that is already available in the civil service, except that in future the normal pension age will be linked to the state pension age as it rises. It is therefore deeply disappointing that the Public and Commercial Services Union has rejected the heads of agreement and walked away from the talks.
I have previously made the point that the local government scheme must be treated differently because it is a funded scheme. The Local Government Association and the trade unions have agreed that the pension age in the new scheme will be linked to the state pension age, and their preference is to deliver a career average scheme. Further discussions will take place over the next three months to agree the details.
In the health scheme, we have agreed to a revised revaluation factor of CPI plus 1.5%, which will allow the accrual rate to be improved to 1/54th. In education, we have agreed to a revised revaluation factor of CPI plus 1.6%, allowing for the accrual rate to be improved to 1/57th, along with modest improvements to early retirement factors. All those heads of agreement are within the cost ceiling that I set out in November, but in a configuration preferred by the unions.
Discussions on police, armed forces, judiciary and fire service schemes have been a separate process from the start, and proposals will be brought forward in due course.
Let me turn to some other aspects of the deals. All the agreements include a cap on taxpayer costs at two percentage points above or below the scheme valuation. That cap is symmetrical, so employees will benefit if costs fall. As Lord Hutton made clear, with the other aspects of reform now agreed there is no reason to believe that, under normal circumstances, that cap will need to be used. It is there as protection for taxpayers and for workers if extraordinary unpredictable events occur.
In the course of the talks, unions have stressed the importance of ensuring that their members will continue to be able to receive the benefits of their scheme if it is outsourced. That is the purpose of the fair deal policy, the future of which we have been consulting on. Because we have agreed to establish new schemes on a career average basis, I can tell the House that we have agreed to retain the fair deal provision and extend access for transferring staff. The new pensions will be substantially more affordable to alternative providers, and it is right that we offer workers continued access to them.
In addition, the Government will consider what practical options might be available to reform the terms of access to the NHS pension scheme, in particular for NHS staff who move to a non-NHS “any qualified provider” delivering NHS services. [Interruption.] That is something that the trade unions have suggested, so hon. Members should keep quiet and listen. [Interruption.]
Opposition Members never have any answers, so they chunter from the sidelines instead.
At the same time, by offering transferred staff the right to remain members of the public service scheme, we are no longer requiring private, voluntary and social enterprise providers to take on the risks of defined benefit that deter many from bidding for contracts in the first place. Replacing so-called bulk transfers of pensions with continued access to public sector schemes means that we continue to protect public service workers’ pensions, manage the risk to the taxpayer and forge ahead with our ambitious plans for public service reform.
I have made the commitment that these reforms will be sustained for at least 25 years. The Government intend to include provisions on the face of the forthcoming public service pensions Bill to ensure that a high bar is set for future Governments to change the design of the schemes.
What does this deal really mean? For our work force, it means that they will continue to receive the best-quality pensions available in this country—and rightly so. In the private sector, these pensions could be bought only at a cost of one third of salary. This is a proper reward for a lifetime’s commitment to serving the public. The new scheme is fairer to women too. By moving to career average, we will give a better pension in future to those, mainly women, who have low or steady salaries throughout their careers.
The Government have been clear that because we are living longer, public service workers must work a bit longer and pay a little more for their pensions. But in return we have also made an important commitment—that at retirement, those on low and middle incomes will get at least as good a pension as they do now. I can confirm today that we have met that commitment. For people who depend on our public services, it means that most unions will be asking their executives to lift the threat of further strike action while work is done to conclude the final agreement, and I hope that the remaining unions will do the same. For the taxpayer, it means that tens of billions of pounds extra that would have been spent on unreformed pensions over the next 30 years is now available for other pressing demands. These are reforms that significantly improve the long-term fiscal sustainability of this country, and reinforce the credibility of our fiscal stance.
The Office for Budget Responsibility will provide a forecast of the savings in its next fiscal sustainability report. For industrial relations, I believe this shows that it is possible to reach agreement through negotiation in good faith, based on clear objectives. That is the right way to approach relations between government and the trade unions. Sometimes the talks have been difficult, but it has been right to stay at the table. In these difficult times, it is important to show that people can come together to achieve genuine reform, preserving the best of the past, but recognising the realities of the future. This is a fair deal for public service workers, an affordable deal for the taxpayer, and a good deal for the country. I commend this statement to the House.
I thank the Chief Secretary for his statement. Families and businesses who rely on public services, as well as the millions of public service workers worried about their finances and their future, will be relieved to see that real progress is finally being made in these talks. Labour has been clear from the beginning that the Government and public service employees would need to find ways of adjusting to the welcome fact that people are living longer. We said in response to the Chief Secretary’s previous statement on 2 November that any resolution to the dispute needed to be fair to taxpayers, fair to public service employees and genuinely sustainable for the long term, and that that would be endangered by a search for quick cash savings or the playing of party political games.
The vast majority of public sector workers, including dinner ladies, community nurses and police community support officers, retire on very modest pensions; moreover, they are already being hit hard by a pay freeze and worried about mounting redundancies. It was clear to us that tearing up decent public service pension schemes or imposing punitive and unaffordable contribution increases would be entirely counter-productive if it resulted in lower savings and inadequate retirement incomes that only left more people retiring into poverty, dependent on state benefits in their old age.
We will be looking at the detail of these proposals on the basis of the tests that we have set out. In particular, can the Chief Secretary offer clarification on the following points? Can he set out the timetable for further consultations and negotiations for each of the four schemes discussed today? When will he come forward with details for the police, armed forces, judiciary and fire service pension schemes? For each scheme, can he give us the new schedules for contribution increases across the schemes, the timetable according to which they will be introduced and how he will ensure fairness and affordability for lower-paid employees, especially those who work part time?
For each scheme, can the Chief Secretary give us the new accrual rates and methodologies for uprating pensions, and say what the timetables for introducing them will be? What assessment has he made of the impact of the changes on the number of public sector employees opting out of the schemes, and the implications of that for future scheme income and viability, as well as future pensioner poverty and the demands on state benefits?
How will the Government ensure that older workers, especially those in physically demanding jobs, are not forced to work beyond a point that would be detrimental to their health, or their ability to do their job? What will the Government do to maintain the morale and engagement of public service employees doing vital work for our country at a time of falling real pay, heightened job insecurity and significant changes to their pensions? Although we are pleased that there is agreement on a fair deal, there is a genuine fear across the public sector that the Government intend to use that deal more as they privatise parts of our NHS and schools, as well as other parts of our public sector. Crucially, how will the Government make good on their promise to deliver a deal that is secure and sustainable for the next 25 years, so that in future we do not face the uncertainty, anxiety and disruption that we have seen over the past year?
The Chief Secretary has made much of Lord Hutton’s review of public sector pensions. We have always said that Lord Hutton’s report provided an important starting point for negotiations, and we have always recognised that change is needed. However, Lord Hutton has also stressed the need to approach these issues in a careful and balanced way, with particular care for the affordability of any additional contributions for lower-paid public service workers, and to avoid fuelling a race to the bottom on pension provision. However, the Government have made it much harder to make progress on many of Lord Hutton’s sensible long-term recommendations by seeking to impose, prior to any negotiations, a steep 3.2% rise in contributions and a permanent switch in the way in which pensions are uprated—from the retail prices index to the consumer prices index—neither of which formed part of Lord Hutton’s recommendations.
However, it is good to see that the Chief Secretary recognises that he needed to do more to address the genuine concerns about his plans over the last 10 months—concerns about the need to do more to protect lower-paid public service employees from unaffordable increases in contributions; about the need to reassure older employees worried about how long they will have to work; and about the need to ensure that people who dedicate their working lives to our public services can expect a decent income in retirement. However, it must be a matter of regret for everyone in this House that it took 10 months of stalemated negotiations and strike action that resulted in closed schools, cancelled operations and disrupted lives for families and businesses around the country, for us to reach this point, just five days before Christmas.
The last Government agreed and established a framework to negotiate reform and manage long-term costs; this Government chose to tear that up and take an aggressive and provocative approach to this serious and sensitive issue. For months the Government have refused to engage in constructive talks to address the issues concerning public service employees, engaging instead in unhelpful megaphone diplomacy. Major changes to public service employees’ current contributions and future security have been announced without warning and imposed without negotiation. Last month’s strikes could and should have been avoided. In short, the Government have displayed negotiating skills similar to those that we saw at the European summit, being more interested in going for the cheap headline than putting in the hard graft necessary to get an agreement that works for everybody.
Clearly the Government still have a lot of work to do over the next few weeks. Ministers and employers will need to clarify the details of their latest proposals, and trade unions will rightly want to inform and consult their members. Reaching a final agreement will be a difficult and delicate process, and we must hope that it is not jeopardised by provocative tactics or inflammatory rhetoric, as we have seen in previous months. We hope that further progress will be made and that early in the new year the Chief Secretary will be able to return to the House and report that a fair and sustainable agreement has been reached, and that we will not see further industrial action. That is what the Opposition want to see, and it is what the country wants to see as well.
I am not sure that the hon. Lady was listening to anything that I said in my statement, because I have already answered almost all the points that she raised. She certainly seems to have forgotten that this is the season of good will. She said that the Opposition’s position was clear, but she did not say what it was. As she and her party have opposed most of the reforms, perhaps they should have the good grace to admit that they got it wrong. It is no doubt uncomfortable for the Labour party that many of its union paymasters have been willing to come to an agreement in the interests of their members—and, indeed, in the national interest.
Lord Hutton’s contribution was significant; indeed, he is the only Labour Member—or former Labour Member—who has made a contribution. It is worth telling the hon. Lady that he welcomes the deals that we have announced today. She asked a question about the agreement put in place by the previous Government, so let me tell her what Lord Hutton said about that cap and share deal:
“Cap and share cannot take account of the increases in cost of pensions over recent decades because people have been living longer. Also, untested, complex cap and share arrangements cannot of themselves, address the underlying issue of structural reforms, nor significantly reduce current costs to taxpayers.”
That is why we could not rest with the position agreed with the previous Government.
The hon. Lady asked a few questions about the timetable. As I said in my statement, the timetable for reaching heads of agreement is finished. Negotiations on the heads of terms have finished, and as I said in my statement, those heads of terms are agreed by most unions in all schemes. That is a good result, which I hope she would welcome. The other schemes—for the judiciary, armed forces, police and so on—will be agreed in due course. For the firefighters the deadline is 20 January; for the police service the second round of the Winsor report, due at the end of January, will take forward that process.
I think that the hon. Lady still opposes the increase in member pension contributions, but I have to tell her that, as a consequence of today’s announcements, that is continuing. She asked a question about the relationship between accrual rates and revaluation factors. I listed the precise accrual rates and precise revaluation factors for each scheme in my statement; I do not propose to repeat them now, but they will certainly be available in Hansard later. As for older workers, one of the reasons why the trade unions favoured the relationship in question between accrual rates and revaluation is precisely that it works more strongly to the advantage of older workers. We will bring forward legislation, I hope in the next Session, that will include the changes that we want to make to ensure the 25-year guarantee.
The truth about this exchange, as with so many others, is that there are two parties on this side of the House acting in the national interest and one party on the other side that seems to find it increasingly hard to see even its own self-interest. While we on this side of the House are working together to build confidence in the future of the British economy, Labour Members are fighting with each other, as they lose confidence in their own leader. As a result of this statement, at least the hon. Lady can assure the Leader of the Opposition that if he falls on his sword there will be a good pension available to him. All that the British people will see is a party that has not a shred of economic credibility left.
By far the most important point in this statement—the one that the Chief Secretary touched on only briefly—is that it demonstrates to the markets that the Government will remain committed to sound public finance. Does that not stand in contrast to a number of eurozone countries, not least France, which are finding such measures extremely difficult to implement, and are paying the price in much higher debt service costs?
I hesitate to enter into any specific diplomatic disagreements of recent weeks, but my hon. Friend makes an essential point. The ability to negotiate such changes strengthens our fiscal credibility as a country, as well as the long-term sustainability of our public finances. To those who want to see that this Government are capable of making changes that reassure the markets and build confidence—not just in the short term, but in the medium term—this agreement is an essential building block. It is one that other European countries have not always been able to achieve—and again, it goes to show that this Government are making the right decisions in the national interest.
Is not the truth of the matter that even with this settlement, public sector workers will pay more, work longer and receive less, that the Government have bullied into submission a number of trade unions, and that those that refused to submit have not walked away from the talks but have been refused access to them? Does the Chief Secretary not accept that his role in all this is to destroy the industrial relations climate in this country, possibly for a generation?
The hon. Gentleman is wrong in everything he says. The fact that a coalition Government of Liberal Democrats and Conservatives have been willing, through a process of painstaking negotiation, to reach agreement with the unions on difficult decisions actually strengthens the industrial relations climate in this country. We now have a good, fair foundation for the relations between the trade unions and the Government; it is a relationship not between paymaster and servant but between two organisations working together to secure the best interests of their members.
Will my right hon. Friend confirm the number of trade unions that have reached agreement, and tell us what will happen to those public sector workers who are in unions that have not reached agreement? Their pensions are clearly under threat.
I think that there are 28 unions altogether, of which 26 have signed up to the agreement in principle, although it is fair to report that they now need to take the issues back to their members and executives. Unite has reserved its position in a number of areas, and the PCS has refused to sign up, which is deeply disappointing. In the teachers’ scheme, all the unions were present at the discussions and have agreed in principle, although four unions have asked to reserve their position pending sight of the technical annexes that will accompany the heads of agreement.
For anyone who wishes to have a pension, these are among the best pensions available. It would be right for people to stay in their pensions or to join them, and I hope that no Member of the House will encourage anyone to opt out of their pension on the basis of this agreement.
I congratulate Ministers and the trade union leaders on what is clearly a win for the taxpayer, a win for the public sector workers and a win for the public. This is good news at Christmas, and it gives us the prospect of a much more prosperous and secure new year. May I ask what Ministers will now do to ensure that three key messages get down to the workers, and not just the leaders? They are that this is a better deal for the low paid, for women and for older workers; that this is a secure deal for the next century; and that everyone’s accrued rights are protected. The workers need to understand that, as well as the bosses.
I am grateful to my right hon. Friend for his words of praise. He makes an important point about the need to get this message across directly to public sector workers. I hope that the unions that have signed up to the heads of agreement, following consultations with their executives in many cases, will now be part of the process of explaining the new deal to their members. The Government will also continue with the efforts, which we started after my statement on 2 November, to communicate directly to nurses, teachers, civil servants and local government workers, so that they understand directly from the Government what the terms of the agreement are.
In regard to workers who are transferred to another organisation, can the Chief Secretary confirm that their right to stay in their pension scheme will apply to all pension schemes? Will that be time-limited in any way? If the organisation to which they are transferred is taken over or changes ownership, will they still have the right to remain in the public sector pension scheme?
Yes, they will. I think that I can reassure the hon. Gentleman on all the points that he has made. What we are saying is that we do not want bulk transfers any more, in which the new providers have to set up their own scheme. Instead, the people to whom he refers will continue to be part of the public sector scheme—the NHS scheme, the civil service scheme or whatever—with the new provider, rather than the taxpayer, paying the employer contribution into the scheme. This will create a more secure footing for those people to be on. It is important to be able to give full reassurance to the hon. Gentleman and, through him, to the members of those schemes that he is concerned about.
I congratulate Ministers and the unions on this excellent settlement, particularly because of the way in which it will benefit the lowest paid and part-time workers, many of whom are women. Will my right hon. Friend tell us how many women are likely to benefit from the settlement? Does he also agree that the hon. Member for Leeds West (Rachel Reeves) cannot welcome the proposals because of her union paymasters?
I cannot give my hon. Friend a precise figure for the number of women workers who will benefit, but about 60% of the public sector work force are female, and all those people will benefit from the terms of the scheme. Unfortunately, women workers tend to be among the lowest paid at the moment, and tend to have steady rather than rapidly rising salaries, but they will particularly benefit from the scheme that we are putting in place under the agreement announced today.
I hope that the Chief Secretary to the Treasury’s remarks about reaching a settlement through negotiation will not have been lost on his colleagues on the Treasury Bench who were gagging for further industrial action. If he believes that negotiation is the right way forward, will he continue to talk to those unions that still need to resolve important points of detail in the interests of their members?
No one on the Treasury Bench wanted to see industrial action; in fact, the only people who seemed to welcome it were some of those on the Opposition Benches. Of course, we are talking about heads of agreement, and further fine details within each scheme remain to be resolved over the coming weeks. That process will continue to involve the unions, precisely as the process has done up to now. The agreement on the heads of terms is complete; that process is over, and this is the final position. On the question of the fine details, however, I can give the hon. Gentleman a positive answer.
I congratulate my right hon. Friend on the hard work that he has put into this process and the unions that have worked so hard to put a deal in place. What message does he have for the PCS union, whose own strike ballot had only a 32.4% turnout and which is now agitating for further strikes?
The Minister for the Cabinet Office and Paymaster General tells me that there were 14 meetings in which discussions took place between the civil service employers and unions, and that the general secretary of the PCS did not turn up to any of them. That is a deeply disappointing position to be in. I hope very much that the PCS will rethink its position, because it will not have the support of its members—as that ballot showed—and it will certainly not have the support of the general public if it chooses to inflict further industrial action after an agreement has been reached.
Will the Chief Secretary to the Treasury stop trying to demonise the PCS, and recognise that it is representing its members, which it has a democratic right to do, and that its general secretary has attended a great many meetings? According to the PCS’s calculations, the average civil servant will pay £63 a month more to work for longer to get less. He has twice told the House that billions are being saved, but that can be done only at the expense of hard-working public sector workers. Is he really proud of this?
I am very proud indeed that we have managed to achieve something that Members on both sides of the House thought would be very difficult, if not impossible, to do—namely, to reach agreement between the Government and many of the trade unions on the long-term reform that is necessary to ensure that public sector workers continue to get the best possible pension schemes long into the future. The previous arrangements were unsustainable, but this one is sustainable, which is why I am confident in offering the House a 25-year guarantee that no party in the House will need to revisit these arrangements over that period.
The Leader of the Opposition claimed recently that the Government were imposing a 3% tax rise on the lowest-paid workers. Will my right hon. Friend take this opportunity to clarify for my constituents that, under the Government’s offer, the lowest-paid workers will make no extra contribution whatever?
Yes, I am happy to confirm that. We set out at the beginning that no one earning less than £15,000 should see any contribution increase at all. In fact, through the consultation process, better terms were able to be offered in some cases. In particular, my right hon. Friend the Secretary of State for Health was able to offer better terms to lower-paid workers in the health sector. This demonstrates once again this Government’s commitment to supporting the lowest paid in these difficult times.
The 2 million public service staff who took action last month will note that the Government have given no ground on the imposition of a 3% tax grab on their pension contributions. The Chief Secretary has said that the heads of agreement are not the actual agreement, but the basis for further detailed negotiations. What are his deadlines for starting and ending those negotiations, and when will the millions of scheme members who must, in the end, decide on their future have something put in front of them to which they can say yes or no for themselves?
It is a matter for the trade unions to discuss their individual processes of engagement with their members. We have worked well with many of the trade unions in this process, but that does not extend to my being able to describe their internal processes to the right hon. Gentleman.
I congratulate everyone who has been involved in reaching the heads of agreement. This will give hard-working public sector workers the certainty that their pensions will remain among some of the very best available. Will my right hon. Friend explain how the move to career-average earnings will benefit women and low-paid workers in particular?
I am grateful to my hon. Friend for her comments. It is an important point, on which I am glad to have the chance to expand. At the moment, final salary schemes in the public sector work disproportionately to the advantage of people who are highly paid or who see a big increase in their salary at the end of their careers, and the contributions of lower-paid workers subsidise the pensions of the highest paid. On a career average basis, each year’s earnings is what it is and the contribution to be made is treated as what it is; pension is built up year by year on the basis of what people have earned and contributed. That means that each individual’s contributions are valued in a more similar way than they are in the inequitable schemes in place at the moment.
The underestimation of life expectancy that occurred in the 1970s and the pension holidays of the 1980s put huge pressure on the pensions industry, both public and private. I welcome the fact that the right hon. Gentleman has set a high bar, but as part of that, will he ensure that pension holidays are no longer possible in the invested schemes, as that would mean building in a correction in case we underestimate longevity?
The hon. Gentleman makes an important point, which I am sure will have been heard by the Local Government Association and the local government trade unions as they continue their talks on that scheme. I am not going to set out particular rules at this stage, but he makes an important point about the need to ensure that the schemes continue to be funded to meet future life expectancy.
I congratulate the Chief Secretary and indeed the Minister for the Cabinet Office and Paymaster General on the successful negotiations, particularly in respect of the protection for low-paid workers. Is the Chief Secretary as disappointed as I am that the PCS union has not only walked away from this agreement but has continually misled its members by telling them that the Government were not interested in meaningful negotiations. How does that sit with so many other unions that have signed the heads of terms today?
I do not know quite how disappointed my hon. Friend is, but I am certainly very disappointed in the stance of the PCS. I hope that it will come round in time to seeing this as a beneficial and positive agreement. It is striking that, in the end, other trade unions have looked at the interests of their members and put those first rather than be too worried about the rhetorical position of a small minority of unions.
Will the right hon. Gentleman now answer the earlier question about the level of opt-out likely to arise from settling these schemes? I am thinking particularly of the local government scheme, which is a funded scheme that will be adversely affected by high levels of opt-out. Will he be clear about what work has been done on this matter and whether there are remaining concerns for trade unions and employees?
At the start of the process, the Office for Budget Responsibility forecast opt-out rates resulting from the contributions increase as being about 1% of pay bill. Of course, because the local government scheme is a funded scheme, one thing we are allowing is that savings delivered by long-term reform, such as increasing the retirement age or moving to a career-average basis, can be used to cover the cost of some of the contribution increases. It is therefore possible that once the final local government scheme is put in place, local government workers will face little or no contribution increase because they are in a funded scheme.
The number of new starters in the private sector who can look forward to a defined benefit scheme is very small. The number of open defined benefit schemes is decreasing, but that should not deflect us from our wish to continue to provide defined benefit pensions in the public sector, which are a right and proper part of the reward for a lifetime’s commitment to serving the public.
The Chief Secretary said of the civil service scheme: “It is disappointing that the PCS and Unite have not supported the heads of agreement and walked away from the talks”. Some might argue that they had been excluded. Be that as it may, he made a virtue of staying at the table, so what is he going to do to re-engage with Unite and the PCS to avoid giving the impression that it is his Government who are simply spoiling for a fight?
I would have welcomed from the Scottish National party—as from the Labour Front-Bench team—a recognition that opposition to these reforms was wrong and a welcome of the fact that we have reached agreement. Sadly, Salmond and Serwotka are the duo who continue to reject public service pension reform. The position of Unite is more nuanced, as it has signed up to the agreement in the local government sector and reserved its position on the health sector, pending consultation with some of its lay members. If that proves to be positive, the union would be welcome back at the negotiating table.
An inflation-proof pension of £20,000 a year taken at the age of 67 would cost about £500,000 to purchase on the open market, yet the average pot in the private sector is about £30,000 for those people who have any provision at all. This difference is exacerbated by the charging structure in the UK fund management industry, which cripples private provision. Now that the Chief Secretary has more time on his hands, having concluded these negotiations, will he address this issue with colleagues because it is a disgrace?
I am not sure that I would accept the description of having time on my hands. The hon. Gentleman’s point is a serious one, however, particularly on the charging structure. This has been looked at by the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb) in the context of the new National Employment Savings Trust scheme, and the Financial Secretary has been considering it. If we can find things to help reduce those costs, we will certainly go ahead with them.
The truth is that this Government are indulging in a race to the bottom on pensions. The fact is that the 11% of private sector workers currently in a defined benefit scheme will find pressure being brought to bear to reduce the benefits of those schemes as a result of the Minister’s forcing down of public sector pensions. Will he tell the House how it can possibly be in the national interest to force more pensioners into poverty, resulting in hundreds of thousands if not millions of pensioners in the future having to rely on means-tested benefits?
I have to say that that is the most shameful scaremongering about what we are offering that I have heard. What we are offering public service workers are the best pensions available to any work force in the country. Most public service workers will continue to have a very good pension in retirement. People on low and middle incomes will in most cases receive a better pension at their retirement age than they could under the current schemes. I hope that, on reflection, the hon. Gentleman will join us in explaining and selling this deal to the many hard-working public servants in his constituency rather than misrepresenting it.
Given that Lord Hutton has said that it is “hard to imagine” a better offer than the “generous” one put forward by the Government, has my right hon. Friend received any imaginative proposals from the shadow Chief Secretary about public pension reform or indeed about how she would pay for it?
I am disappointed that despite a number of written questions from me and the questions put today, the Chief Secretary cannot do better than the OBR estimate of 1% of the pay bill in respect of reduced contributions. In his statement, however, he said that the Government would “review the impact of next year’s increases, including on opt-outs and equality”. Does that mean he will tell us in a report to the House about the impact of these changes on equality so that we can know whether or not his confidence that this is a good deal for women is true?
I am grateful to the hon. Lady for picking up on that point. We will certainly look at the impact on opt-outs of the first year’s contribution increase. That will allow us to make adjustments to how we deliver the increase in years 2 and 3. I will be happy to share the relevant evidence in an appropriate form, perhaps in a statement or debate in the House.