John Healey
MP for Rawmarsh and Conisbrough · Labour · United Kingdom
“Mr Spock, I think some would say, Mr Speaker! My hon. Friend is right. Despite global conflicts, trade tensions and rising threats in the world, which are pushing up inflation, bearing down on growth and pushing up borrowing costs, the UK economy is demonstrating huge resilience.”
“The Prime Minister and I have been clear that we must cut the costs of welfare. On levels of taxation, we had a period of Conservative Government, with low growth and high debt. They crashed the economy with the mini-Budget, and we had levels of taxation that were putting pressure on business, adding to the cost of living.”
“The hon. Lady is talking to the person who led the work to establish a defence and security partnership with the European Union and bilateral agreements with other countries, on which we now build both our economic strength and our national security strength. On the question of the Budget, I ask the hon.”
“Since day one in the job, the Prime Minister and I have been in lockstep in our determination to meet Britain’s fiscal rules. This is the bedrock on which we build good growth and help give a bit of breathing space to families and businesses.”
“May I start by paying tribute to my predecessor, my right hon. Friend the Member for Leeds West and Pudsey (Rachel Reeves)? I am proud to have been a member of a Government with the first female Chancellor in 700 years.”
“My hon. Friend speaks up very strongly for his local area. He is right about the importance of pubs, social clubs and live venues, and about the importance of the 20% cut that we announced in July. These are the things that make the places where we live the places that we also love.”
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“A commitment in the Bill will serve as a confirmation and a reassurance for public service workers that the Government do indeed mean what they say in this regard. Let me say something about amendments 19 and 20, and about the Bill’s use of the concept of “closure”. During this debate and in Committee, the terms “closure” and “winding up” have been used almost synonymously, but they are not, of course, synonymous. The winding-up provisions in the Pensions Act 1995 apply principally to occupational pension schemes. Those schemes are different from local government pension schemes, which are funded and have the quasi-constitutional backing of local government. As my hon. Friend the Member for Nottingham East pointed out, the Economic Secretary has said that that it is not the intention to close local government pension schemes.”
“That commitment ought to be included in the Bill, and then, as is appropriate in the case of enabling legislation of this sort, the details of the mechanism for how it is to be implemented can be provided in further regulation or scheme rules. I must say to the Economic Secretary—as some of my hon. Friends have already said—that trust is a problem for the Government in the public services, particularly when it comes to public service pensions. That should come as no surprise to them. After all, they commissioned Hutton to produce the report, and before the publication of the final version, they hit public service workers with a 3% tax surcharge on their pension payments, and with not just a temporary but a permanent switching of the link with pensions from the retail to the consumer prices index.”
“The question of access to public service pension schemes for public service workers who may face compulsory transfer to non-public service employers and organisations is critical. As has already been pointed out, the Government’s commitment to an extension was a deal-maker for many unions and for many of their members, particularly on the local government side. It would have been a deal-breaker for those unions and members if the guarantee had not been in place, or if what the Economic Secretary said in Committee—which I have quoted—had been on the table instead. We had a clear and principled commitment.”
“My hon. Friend’s constituency is in Northamptonshire and mine is in south Yorkshire, but we share an industrial heritage and a strong tradition of steel-making, and I entirely understand the point that he has made. It is as relevant to Corby and to east Northamptonshire as it is to Wentworth and Dearne and parts of Rotherham and Barnsley. New clause 3 is simply intended to ensure that the undertaking given to the House by the Chief Secretary to the Treasury, and given to the unions that have been negotiating about pension schemes changes on behalf of their members, is guaranteed, and that Ministers will not be able to change their minds and change the schemes in the future. This must be legislation for a 25-year deal, which is what the Government originally promised us.”
“I support the hon. Gentleman’s remarks, and I hope the Economic Secretary will, too. For clarity’s sake, will the hon. Gentleman confirm that this does not only affect local councils, as schools that are academies, charities and a number of non-government organisations also use the local government pension scheme?”
“My hon. Friend is making a powerful case and sounding a clear warning. She mentions that clause 7(1) refers to “a defined contributions scheme, or ( c) a scheme of any other description.” Would she like to point out to the House that this potential change in clause 7 could in theory, under subsection (5), be brought in by way of a negative resolution—by a statutory instrument that would not allow a debate in this Chamber or even a 90-minute debate in a Committee upstairs?”
“My hon. Friend is making another powerful point about amendment 11. She is right that the Scottish Government are not normally backward in coming forward to demand new powers and for decisions to be taken in Scotland for Scotland. Would she care to speculate about why they have not chosen to apply for a legislative consent motion that would allow them to make these decisions in Scotland? Could it be that they are looking to allow the broad shoulders of the Economic Secretary to take the blame and responsibility for the changes to the local government pension scheme in Scotland?”
“I welcome that commitment. The Minister said that the information should be provided “to some scheme members”. May I urge him to take a maximalist approach and make sure that the maximum reasonable number of members get the most regular and at least annual information that will allow them to understand the scheme better and to plan for retirement and manage it better as well?”
“Last weekend the Secretary of State condemned a foster care decision made by social workers in Rotherham, who he said had made “the wrong decision in the wrong way for the wrong reasons”. He knew nothing about that complex case and had done nothing to check the facts, which was completely wrong for a Minister in his position. Will he now apologise?”
“They are elderly, vulnerable or unwell, and they are being charged rip-off rates to sort out problems or simply get information about sickness and disability benefits, carers support, jobs, pensions, child support, and even crisis loans.”
“Some of the most important matters that MPs discuss in Parliament start with concerns that are raised with us by constituents, as is the case with this debate. People are routinely placed on hold for half an hour when calling the local jobcentre, or they are charged £40 in a single month for the cost of calls to Departments, when they simply try to report a change in circumstances. Such bills are run up because, as I established through freedom of information requests and parliamentary answers, the Department for Work and Pensions has 148 separate phone lines all using 0845 numbers that can cost up to 10p per minute from a landline and 41p per minute from mobile phones. People who need to call those numbers are usually on a fixed, low income.”
“I welcome the hon. Gentleman’s support for my argument. He is right that thousands of people in his constituency, in mine and in the Minister’s will be affected by those premium-rate lines and the rip-off call charges that people can suffer. The cost of the call takes a big chunk out of already stretched budgets. That can put people off making calls to get the help they need.”
“I leave the last words to a local man from Barnsley who said: “You haven’t the money to pay to phone these numbers, and yet you have to phone them. It’s a poor person’s trap.” It is unfair and unjustifiable, and it must change.”
“With the Ofcom changes to come in shortly, that will apply to all mobile calls, not just landline calls. As a minimum, all lines for all dealings with the DWP should be switched to 03 numbers, so that the cost is never more than calls to a 01 or a 02 number, and they must be part of any inclusive discount schemes in the same way. These numbers were launched five years ago for Government, public bodies, charities and not-for-profit organisations to use. Ofcom has reserved 0345 numbers for each of the equivalent 0845 numbers, so that the switch could be made with minimum cost and minimum confusion. Finally, I called this debate to expose the extent of the rip-off rates that many of the poorest, most distressed and highly vulnerable are paying to get the welfare support to which they are entitled.”
“The combination of sudden cuts in benefits payments, delays in decisions and the introduction of universal credit next year could lead to chaos and much higher costs for those making calls. What should the Minister do? Responsibility for running an efficient and equitable system of benefit support lies with the Government. I see contact centres and phone lines for access as part of the running costs of government. Therefore, there is a strong, principled case for making free the phone access that people need if they are to claim and to continue to receive their benefits, tax credits, pensions or child support. I want the Government to make these changes. After all, the Department makes calls free with the 0800 numbers for new claims for some benefits.”
“According to the Department, the intention is “that traders should not use high charges to deter existing customers with legitimate queries, complaints or cancellation requests from contacting them nor derive revenue benefit from such contacts”. The parallels are clear; the lessons are clear. I hope the Minister and his colleagues in the DWP will learn those lessons. Because things are poised to get much worse now is the time for him to act. I fear that there could be an explosion of inquiries and problems for people because of the current turmoil in the benefit system at the very time the Government are cutting face-to-face service staff and forcing people to use phones instead.”
“If the Government are not sharing the extra revenue and are letting the telecoms companies keep all the extra charges, the 0845 numbers are not just a bad deal for benefits claimants, but for the taxpayer. Change is possible. I mentioned the changes to GP surgeries and the approach of the Department of Health and the NHS. The Minister might also care to look at the Department for Business, Innovation and Skills, because it ended a consultation on implementing the consumer rights directive, which was agreed by all member states in the EU last year. This will “prohibit excessive phone charges for consumers contacting traders about existing contracts.” In other words, all post-contract customer helplines will have to charge the consumer no more than the basic rate for a telephone call.”
“Let me again quote from a constituent in Goldthorpe in Dearne who says that “in my case the jobcentre at Goldthorpe the phone is in the corner where everybody who goes in to the office can overhear your conversations not in a sound proof booth so your conversations cannot be overheard.” Frankly, people are having to give very private, personal and financial information through these phone lines. It is not acceptable to say, “There are these phones in the Jobcentre Plus office in the public space.” Thirdly, the Department says that it does not benefit from the premium rate charges that people have to pay to ring it, but someone is making money from these calls.”
“I go further, and Ministers make three arguments in response to my challenge. First they say that the DWP will ring people back, but too many constituents tell me that this is not offered and does not happen. The FOI figures I have show that hundreds of thousands of callers each week give up on getting through after being kept on hold and charged. More than one in three calls to the employment and support allowance helpline are abandoned before they are answered, but on average more than five minutes after they have been connected. Callers to the incapacity benefit reassessment line wait nearly 13 minutes without being answered before they hang up. Secondly, Ministers say that there are customer access phones in most—but not all—jobcentres.”
“Back in 2006, Ofcom said: “Ofcom continues to recommend that public bodies should not use NTS numbers exclusively…especially when dealing with people on low incomes or other vulnerable groups. The new 03 country-wide numbers, proposed as part of Ofcom’s Numbering Review, would be well suited to the needs of many public bodies currently using chargeable 08 numbers.” Those 03 numbers were introduced the following year, and Ofcom recommends the use of these numbers, which provide the same additional functionality as 08 numbers but are priced the same as a geographic numbers and—crucially—have no revenue sharing. The long-standing campaigner and expert David Hickson and the fair telecoms campaign take the same view—that 03 numbers are “a perfectly acceptable option for normal engagement between citizens and public bodies”.”
“These 0845 numbers are formally called number translation services. The NTS is dialled by a caller and is diverted to its destination. This process can include features such as distributing calls between multiple sites, routeing calls according to the caller’s location and, of course, transmitting recorded announcements. But the key feature of these number translation services is that the call revenue from the customer can be—and normally is—shared between the telecoms company and the organisation receiving the call, the former receiving the access charge component and the latter receiving the service charge or the termination rate as it is known. The Minister is relatively new to his brief, but the Government have had plenty of notice about the problems with the 0845 numbers.”
“The advice worker said that “she needed a great deal of encouragement from the adviser just to use the phone and she simply couldn’t afford to call the DWP. So she used the office landline, and the length of the two calls was over 30 minutes before she was then told she’d have to call back another time, as all the staff were busy.” There are almost 8,000 people on jobseeker’s allowance in Barnsley, nearly 9,000 in Rotherham, and more than 45,000 across south Yorkshire. A further 38,000 across south Yorkshire receive income support and 37,000 get incapacity benefit. This is a scandal on a massive scale. The Department’s response to my FOI request showed that well over 30 million people call just seven of the DWP’s most commonly used inquiry lines each year—never mind the 141 other lines.”
“The other day, someone locally who helps others to deal with the problems they face in the benefits and tax credits system said: “I called the Jobcentre and tax credit office last week for a lady only to find after looking at her itemised” telephone “bill it had cost her £4.55; and this was only the calls that could be checked as calls under 50p are not itemised.” She added: “To someone in this lady’s position as a single mum this is the equivalent of her daily food bill.” This is not just a problem of call rates. We have an excellent welfare rights service, run by Rotherham district council. Staff there told me of a client this week who needed to check on the progress of her employment and support allowance claim. She has debts, as well as mental health difficulties.”
“As the Minister confirmed in a parliamentary answer last month, fully 87% of the Department’s phone lines use the 0845 number, including the disability living allowance and attendance allowance helplines; Jobseeker Direct, which helps people to find or make an appointment with Jobcentre Plus; all local jobcentres; Employment Direct, which is used for advertising jobs; the social fund; the winter fuel helpline; and the child maintenance line. The list goes on, and time is limited. In other words, people can pay up to 41p a minute in phone call charges for almost all inquiries to check the progress of applications, to ask for information and advice, to report a mistake or change in circumstances, and to make claims for some benefits and other support payments.”
“The Secretary of State told me in writing in the summer: “Jobcentre Plus is subject to the Department’s telephony numbering policy, which is that all calls should be free to our 0800 numbers to claim…State pension…Pension credit…Jobseekers allowance…Employment and support allowance…Emergency payments or crisis loans.” That is correct, but it is misleading. Those are a small minority of dedicated DWP phone lines.”
“On calls to the Department for Work and Pensions, Mr Roger Clark of Goldthorpe put it to me like this: “We cannot afford to do this out of our benefits with the cost of gas, electricity, water, food and fuel being so expensive”. Quite simply, the Department is hitting the people that it is there to help. The situation is getting more serious. Many people now rely on mobiles. One in six people live in homes without landlines. Ninety-two per cent. of adults have a mobile phone, and the number is increasing.”
“I am glad I gave way and welcome the hon. Gentleman’s intervention. He is right, because guidance was issued in 2009—regulations were put in place in 2010, but they have not been enforced. If it gives the hon. Gentleman any comfort, I ran a campaign in my local area because GP surgeries in Barnsley and Rotherham were using 0845 numbers for people who wanted access to the surgery. I am happy to say that all 16 of those using the numbers in Barnsley have switched to the landlines that the hon. Gentleman advocates, as have 22 out of the 24 GP centres using the numbers in Rotherham. I should tell the Minister, as the hon. Gentleman has, that change is possible and can be done. It requires the will of the Department for Work and Pensions, just as it does the will of the Department of Health and the NHS.”
“The caller pays the termination charge, so if the Government do not receive it, and most organisations using the service receive the access charge component, who receives the value of the termination charge?”
“Will the Minister condemn the disruption caused by far-right groups that, twice in the past month, have brought their extreme and racist demonstrations into Rotherham town centre, landing us with a bill of half a million pounds in policing costs and lost trade?”
“May I press the Secretary of State on the point raised by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford)? The Bill extends to commercial and business developments the system for nationally significant infrastructure projects. The Secretary of State has just said that there will be national policy statements for reference, so is he saying that national policy statements will be prepared for commercial and business developments? Otherwise, I think he might have mis-spoken; perhaps he could make himself clear.”
“I apologise for not having been able to be present at the start of the hon. Gentleman’s contribution, but I have come in at a very interesting part of his speech. Does this not show up the exact problem with two-tier areas and two-tier authorities, in that fostering and supporting economic growth is so much more than simply the planning system, as it involves education, skills and transport? Many such responsibilities in two-tier areas are held at county level rather than at district level.”
“The Chief Secretary lays great stress on the Hutton report, so why did not the Chancellor wait until Hutton reported before hitting public service workers with a 3% surcharge on their pension payments?”
“The Chief Secretary will be aware that there is a working longer review in the NHS that is looking into the question of working longer in particular disciplines in the health service. Will the provisions in the Bill allow flexibility in the link between the normal pension age and the state pension age, depending on the conclusions of that review?”
“With respect, intentions are one thing but the terms of the legislation are another. Is my reading of it wrong? As I understand it, the provisions will not allow flexibility for some groups of NHS workers in the link between the normal pension age and the state pension age. Clause 9(3) states: “The deferred pension age of a person under a scheme under section 1”— including NHS workers— “must be…the same as the person’s state pension age”. That suggests that there will be no flexibility. Am I right or wrong?”
“I promise not to intervene on the Chief Secretary again, but I want to ask about the employer cost cap in clause 11. On the front of the Bill, the Chancellor has signed a declaration that the provisions of the Bill “are compatible with the Convention”. It is clear from clause 11(7), however, that the Bill allows schemes to provide for reduction of accrued benefits as part of the employer cost cap. This would be a fundamental breach of scheme members’ rights under article 1 of protocol 1 of the convention, so how can the Chancellor’s statement on the front of the Bill be true?”
“The dates for the so-called closure of the local government scheme in clause 13 are wrong, as is the date for ensuring that transitional protection, as promised, is in place. As the Minister prepares for the debates and the amendments in Committee, I hope he will take seriously the points and concerns raised tonight. I hope he will be ready to make amendments where there is a good case for doing so, because in the end that is how we get a public pensions system that is fair to taxpayers for the long term, but remains fair to those public service workers who give so much of their time—their whole lives—to support others.”
“Fourthly, last December the Chief Secretary made an important commitment to the House on behalf of the Government on the retention of current protections for public sector workers who are outsourced and the extension of fair-deal provisions for all staff transferring employers. Schedule 9 enables that to occur in the civil service, but it does not ensure that it will occur, and it must. Finally, let me say this to the Treasury Minister and his colleagues. There are many excellent minds among the civil servants in the Treasury, but frankly they do not know everything. They sometimes make mistakes and sometimes others know more than they do. I shall give a couple of examples.”
“As such, they threaten one of the central tenets of pension saving: that what one has accrued is safe and that the terms on which it was accrued will be honoured, which is as true for the private sector as it should be for the public sector. Secondly, a running theme throughout all 38 clauses is a Treasury power grab—the centralisation of control over all elements of schemes, from valuations to scheme regulations, with no requirement to consult even the scheme members, who are most directly affected. Thirdly, there is a legislative lock in clause 9 between the normal pension age and the state pension age for all but firefighters, the police and the armed forces. Therefore, even if there is a strong case, which is now being looked at, for that link to be made flexible for some workers in the NHS, the legislation does not permit it.”
“The reforms that we put in place—those now being negotiated—reflect those concerns. This is a broad-brush Bill, and the same centralised powers, controls and restrictions over the unfunded schemes do not fit well with the local government pension scheme. As the shadow Chief Secretary said, some significant debates and amendments are required in Committee. There are some serious flaws in the Bill. I will offer the Minister four for starters. First, the Chief Secretary confirmed in response to interventions from me and the hon. Member for Foyle (Mark Durkan) that clauses 3 and 11 allow scheme regulations to make retrospective changes to the benefits that people have already worked for and paid for.”
“Unlike all the other main schemes, employer contributions in the local government pension scheme are set locally by 89 separate funds, each with its own investment strategies, its own member demographics and its own range of employers—in other words, the flexibility to match the responsibilities and pressures that those funds face. Unlike in other main schemes, the governance of the local government pension scheme reflects local municipal roots, while the respective roles and responsibilities of those managing and overseeing the scheme are different from those for the national schemes. Finally, unlike in all the other main schemes, simply meeting the liabilities is not the only concern of those managers. Stability is a vital element, as is the participation rate.”
“Member for Bromley and Chislehurst (Robert Neill), and a former Treasury Minister, let me say that my main concern is about the local government pension scheme. The Treasury has never really recognised the difference between the local government pension scheme and other public service pension schemes. Unlike other main schemes, the local government scheme is a funded scheme. It has £150 billion in assets, it raises an annual income significantly greater than its expenditure each year and it has seen its investment income cover at least a third of its expenditure on benefits in each of the last few years.”
“The Government are legislating after losing the trust of public service workers, who simply do not trust them with their pensions or with this pensions legislation. It might not be the Government’s intention to reduce benefits already accrued, to prevent the flexibility to link the normal pension age with the state pension age, or to make further sweeping and radical changes or reforms without proper scrutiny or consultation, but the legislation, as it stands, can be used in that way, whatever the intention of Ministers. That is why it is important to get this legislation right. It is even more important because this is a broad, sweeping framework Bill in which many of the detailed changes will lie in the regulations and scheme rules. As both a former local government Minister, like the hon.”
“They did not even wait until the Hutton review, which they commissioned, had fully reported before in October 2010 the Chancellor hit public service workers with a 3p in the pound surcharge—a public service pensions tax that had nothing to do with long-term pension reform and everything to do with a short-term cash grab to try to deal with the deficit; and this from a set of workers that, at the same time, was being squeezed by a public sector pay freeze, hit by a VAT increase, subject to rising energy bills and suffering from deep cuts in tax credits. That is where the Government lost the moral authority to claim we were all in it together and to be a one-nation party. Furthermore, changes such as the switch from the retail prices index to the consumer prices index were imposed without warning, consultation or agreement.”
“After our changes, in 2010 the National Audit Office concluded: “As a result of the changes, which are on course to deliver substantial savings, long-term costs are projected to stabilise around their current levels as a proportion of GDP. The changes are also set to manage one of the most significant risks to those costs, by transferring from taxpayers to employees additional costs arising if pensioners live longer than is currently projected.” The Government have failed to build on those reforms.”
“As a local government Minister, I was responsible for the local government pension scheme, which we radically reformed not just for new members but for existing members. Furthermore, we did so without closing the scheme, and there is no need to accept what is provided for in clause 16 and do that this time around either. The reforms recognised the pressures of cost, population and life expectancy. They also recognised that pensions were deferred pay, that changes to contribution rates and benefits should be consulted on and agreed, that most public sector workers were low-paid and that their pensions were far from gold-plated. The average pension for NHS workers last year was a little over £7,500, while the average for a local government worker this year is just £4,406.”
“That is what the Labour party did with the far-reaching reforms we put in place in government. We agreed and established changes to reflect the increasing age of the population, to manage the changes effectively, to control the costs to taxpayers and to increase contributions overall from scheme members. We did that with the armed forces in 2005, the police, firefighters and local government workers in 2006, and teachers, the NHS and civil servants in 2007. Across all areas, we introduced increases in the pension age, changes to the contribution rates from members—especially the higher paid—and a “cap and share” arrangement that limited absolutely the liability of taxpayers to future increases in costs.”
“It is a pleasure to follow the hon. Member for Bristol West (Stephen Williams), who made a very balanced speech. He is right that reform is required. That is accepted and supported by hon. Members on both sides of the House. I start from a simple principle: pensions are pay deferred. They are part of people’s terms and conditions, often part of their contract of employment, and, in the public sector, part of the deal for public service workers who often give a lifetime’s commitment to the service in which they work. Two things follow from that: first, pensions are principally the property of the scheme members, who defer their pay and put that pay in the hands of managers and trustees; and, secondly, changes to people’s pension terms should involve those members—those whose money it is—through consultation, negotiation and agreement.”
“The hon. Gentleman said a moment ago that the total risk of the schemes was borne by the taxpayer. Does he not realise that he is making the same mistake as Ministers in not recognising that the local government pension scheme is a funded scheme? The income from its investments last year topped £3 billion, and there is also a strong contribution from employees alongside that of employers. That makes it a case apart from his general argument.”
“The Minister spoke warmly about his father and trade unions. Which trade unions support this Bill as it currently stands? Can he name even one?”
“Since his promotion, the Secretary of State has said little and, I assume, read a lot. Did his starter pack include details of the Prime Minister’s promise: “This year, and the year after, and the year after that, the money going into the NHS will actually increase in real terms.”? Did it include Treasury figures that show there has been a real terms cut each year since the election? What is he saying to NHS staff and patients who see the cuts and see the Prime Minister’s big NHS promise being broken?”