EU-Japan Economic Partnership Agreement
Debate between Geraint Davies and Jeremy Quin(5 years, 10 months ago)
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Geraint Davies
The WTO did get involved, but the essential point—[Interruption.] No, let us get this clear. The essential point of these arbitration courts is that investors invest, and if Governments change the rules and doing so changes their future profits, investors can sue for compensation, as was the case with the sugar tax. That would be the case if there was a plastics tax, for example, or if there was a diesel tax, and so on. That is why people are very worried, and the Government must not trade off the environment, the public interest and wider considerations of public law. Thankfully, there has been concern about this in Europe, which is why such an unnecessary system has not been applied in the Japan deal.
On Japan, 40% of its inward investment into Europe is to Britain. Why? Is it because the Japanese love British people? We do speak English, which is their second language, but it is basically because we are a platform, through the customs union and the single market, into the biggest market in the world. These are the facts. If we are not in the single market and the customs union, which we will not be after the transition period—if we go ahead with the barmy negotiation that is being suggested—that foreign direct investment will go to mainland Europe, and we may just be left on our own.
This is the situation we face. In particular, as has been said, President Trump basically has an America first policy. He does not recognise anything except a zero-sum game. We have had a conversation about imports and exports.
Geraint Davies
I will take the hon. Gentleman’s intervention in a moment.
The hon. Member for Stone (Sir William Cash), who is sadly no longer with us—I mean he is not in the Chamber—has always argued that we have to get out of the EU because we have more imports than exports, yet that is the case in Japan, as has been pointed out. There is a bigger picture here, because cheaper imports are often inputs that make our products less expensive relative to elsewhere, and there is a balance in relation to foreign direct investment as well. These are complicated issues, and I do welcome the deal. I will take the intervention of the hon. Member for Horsham (Jeremy Quin).
Pensions Auto-enrolment
Debate between Geraint Davies and Jeremy Quin(6 years, 2 months ago)
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Jeremy Quin (Horsham) (Con)
I am grateful for the opportunity to speak, Mr Davies. I am most grateful to my hon. Friend the Member for Chippenham (Michelle Donelan) for calling this debate. Too often, we come to the Chamber to have a good moan about things, but I sincerely hope that we have cross-party agreement today. Auto-enrolment should be warmly praised on both sides of the House, because it has been a great success. Some 19 million people are now enrolled in qualifying workplace pensions, 9 million of whom came through auto-enrolment. That means that we have increased by a quarter the percentage of the population who are in qualifying schemes. That is a success on any terms.
In addition to the policy being a success, its execution has been a success. My right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) was too modest to refer to his role in that, but a succession of Secretaries of State, both Conservative and Labour, oversaw the successful introduction of a good policy. For 1 million employers to be part of the scheme—including, I am proud to say, 1,860 in my constituency—and for opt-out rates to be as low as they are is a success.
I will dwell on that success for just a second longer while I talk about the long-term implications of what we have done. It is estimated that by 2019-20 an extra £20 billion a year will be being saved in pensions, which will ensure that people have a more comfortable retirement than would otherwise have been the case. There is more success in the small print: the biggest increase in participation has been among those on lower incomes and those working for smaller employers.
Unfortunately, as we are all aware, that is not the end of the story. We have had such positive buy-in from employers that, like other Members, I am nervous about the increase in the contribution rate to 3% in April 2019, but that is clearly a risk we have to take. If we cannot take that risk and push that envelope at a time when we have record rates of employment, there will never be a time for it. Even from there, as has been alluded to by my hon. Friend the Member for Chippenham and by my right hon. Friend the Member for Preseli Pembrokeshire, a savings rate of 8% will still leave 12 million individuals undersaving for their retirement.
We all know the huge power of inertia. There is a real risk that if people are told that is what they have got to save, they believe that is what they need to save, but we in this House know that that is not the case. The evidence from Australia and elsewhere is that higher rates will be required. I welcome the scheduled review of contribution rates. It may be difficult and painful, but it is necessary. I also welcome some of the other proposed reforms over the next few years that have been alluded to, such as lowering the relevant age from 22 to 18, bringing an extra 900,000 workers into the scheme, and removing the lower earnings limit, which will add nearly £3 billion a year to benefit in particular lower earnings workers, those with a part-time job and those with a number of part-time jobs.
My hon. Friend the Member for Chippenham eloquently described the issues faced by the self-employed. I agree that a participation rate in that growing sector of 19% is far too low. That is rightly a matter of concern. She produced some interesting ideas, and I look forward to the ministerial response. She and I would agree that there needs to be a structure in place for the self-employed. Again, it comes back to default and inertia: as long as there is no structure in place, they will not feel a need to go in, participate and make the provision for retirements that they require.
Many good things are coming out of the review. Of course, I have extra questions to ask my hon. Friend the Minister. Has the Department made an estimate of the number of individuals with earnings below the trigger rate of £10,000 per annum who are opting into the scheme? That would be good to know, to work through whether the scheme can be usefully extended below that rate. Opt-out rates are particularly low, but less so for small and micro-employers. Is that a matter of concern for the Department? What is it doing to address that?
My hon. Friend the Member for Amber Valley (Nigel Mills) referred to the need to understand the position and what can be done about it. I would love to hear more from the Minister about the pensions dashboard, which he referred to in his intervention, which I want to see extended to cover not just pensions but more assets. I also want to hear more about the mid-life review. My hon. Friend the Minister is a mere spring chicken, so he may not be under any personal time pressure to implement a mid-life review, but an MOT, as recommended by John Cridland, would be an excellent way to help people, as the Minister said, understand where they stand.
Geraint Davies (in the Chair)
I call Paul Masterton— I think you have got time for your pension.