Public Service Pensions

Clive Betts Excerpts

Wednesday 2nd November 2011 Commons Chamber

[Danny Alexander]

Those proposals will be brought forward later. Police pensions are being considered by Tom Winsor in his second report. His recommendations will not be about the police alone, but we need to make sure that police officers get a proper, fair and decent pension for the contribution they make to our society.

[Mr Clive Betts (Sheffield South East) (Lab)]

The Chief Secretary has once again said that all accrued rights will be protected. Will he confirm, however, that the change from the retail prices index to the consumer prices index will, in practice, affect the accrued rights of every single member of every public sector pension scheme?

[Danny Alexander]

I do not believe that that is a correct use of the term “accrued rights”. Of course we will protect the accrued rights in full. The RPI to CPI switch will have the effect that I described in my statement. That is the subject of a legal dispute at the moment, but it was the right decision by the Government.

Amendment of the Law

Clive Betts Excerpts

Monday 28th March 2011 Commons Chamber

[Mr Pickles]

The hon. Gentleman is entirely wrong. We have included zero-carbon homes, and that will take effect from 2016. [Interruption.] We most certainly have done that.

[Mr Clive Betts (Sheffield South East) (Lab)]

I ask the Secretary of State to look at paragraph 2.12 of “The Plan for Growth”, which states that where an authority does not have a development plan or where such a plan is not up to date, there will be a presumption that an application “will be accepted”. That sentence does not mention sustainability, but just that such applications will be accepted. Does that mean that where there is an up-to-date plan, a developer will have less chance of getting an application through than in an authority without a current local development framework that is still operating on a unitary development plan? In other words, will there be a two-tier and differential planning system in this country, which we have never had before?

[Mr Pickles]

The local plan will have to reflect the presumption as well. It will be reflected in the national planning framework, which in turn will be reflected in the local plan. If a plan is ambiguous or out of date, that presumption will take effect, but there might be an existing plan that conforms to the presumption in favour of sustainable development. Members will now understand why planning is such fun.

Our planning reforms, like the new roles for local councils and entrepreneurs, are there to drive growth, just like the council tax freeze for hard-working families. They show that localism and economic growth go hand in hand. Those who think that the key to getting Britain growing again is for Whitehall to seize control should learn the lesson of history, which is that it repeats itself because no one was listening the first time round.

Let us compare two years, 1924 and 2009. There are many parallels. In 1924, Lenin is dead and Stalin is planning to take absolute power; John Logie Baird is demonstrating a prototype of his latest invention, the televisor; in New York, theatre audiences are getting their first sight of a dance called the Charlton—[Hon. Members: “Charleston!”] Charleston. I do beg your pardon. Also, house building in the UK reaches an all-time low.

--- Later in debate ---

[Mr Clive Betts (Sheffield South East) (Lab)]

This could be a Budget for growth—reduced growth. A few weeks ago, the Chancellor blamed the snow. Now we have the old chestnut, “When in doubt, blame the planners.” There is the idea that everything that is wrong with this country is down to our planning system. I accept that some proposals in “The Plan for Growth” may be helpful. Speeding up the consideration of planning applications is generally beneficial. However, I have four areas of doubt in which I want to urge caution.

First, developers want certainty. Consistently tinkering with the planning system leads to uncertainty and is likely to discourage development. Secondly, good developers want good quality development. If they are concerned that on the site next door to them, tin sheds could go up unrestricted, they will be less likely to put their money into good quality development. The Royal Town Planning Institute has cautioned against a return to tin-shack Britain. Thirdly, not only might more houses be built on greenfield sites; if restrictions are not properly applied to applications, out-of-town superstores might rear their heads again, which would go against the policy of the previous Conservative Government of a “town and district centre first” policy for retail development. Finally, we have had enterprise zones before, and last time each job cost an average of £26,000 of public money. There is concern, which the Secretary of State for Communities and Local Government referred to, about jobs simply being transferred to enterprise zones from other areas. He said that that would be controlled, but it is difficult to see how. It is even more difficult to see how we can control the problem of development that would have been undertaken elsewhere going to an enterprise zone instead, at a cost to public funds.

There is a real housing problem in this country. We can welcome the Firstbuy housing programme that the Government have introduced, although it looks very much like HomeBuy Direct, which they have just abolished, by another name. The real concern is the chronic shortage of housing in this country. We hear that from people in our surgeries such as young couples who cannot buy their first home, people who need social housing and are on the waiting list and people in overcrowded accommodation.

What the Government have done in the Budget has to be considered alongside a 50% cut in money for new social homes in the next four years, and alongside the catastrophic fall in the number of planning applications for new homes that are being approved. There is concern that as individuals’ economic circumstances improve in three or four years, as they probably will, when they feel more confident about buying a new home and mortgage availability improves, the houses will not be there to buy because they will have been stopped in the planning system.

We can argue about the abolition of the regional spatial strategies, but it leaves a vacuum behind and there is no evidence at all that the new homes bonus will generate housing development. If it does not, we could be left with a spike in house prices in four or five years’ time, which again will price young people out of buying their first home and force more people back on to the social housing waiting list. That is a real concern, and I do not think the Government are beginning to address it.

When people in my constituency look at the Budget, they will be concerned that it does nothing to address the fact that their real wages are falling or that their benefits and pensions are not going up as fast as inflation. They will also be concerned that the Government have done nothing in the Budget to cushion people from the attack on front-line services caused by the cuts to local government spending.

Local government is taking a much bigger hit than Government Departments, and cities in the north, such as Sheffield, are being hit harder than places in the south, such as Dorset. The front-loading of the cuts is having a real impact. The Secretary of State for Communities and Local Government has said before, “It’s all right, because cities like Sheffield are managing better”. That is not true, despite the fact that the Deputy Prime Minister has said that it is all okay because Sheffield city council is cutting only 200 jobs. Its own website shows that 731 jobs are to go. As it has a high level of outsourcing, many hundred more jobs in the private, third and voluntary sectors will also be cut.

Voluntary sector organisations such as the south-east Sheffield citizens advice bureau are facing 15% cuts to their budgets this year, nearly twice the level of the cut in the council’s funding. That is completely contrary to what the coalition Government said should happen. There are unspecified cuts in the council’s budget, such as £1.3 million for library services. The council is not saying which libraries will close, which books will not be bought or which libraries will have their hours reduced. It is achieving its proposals only by reducing balances to what the chief executive has said is a low level at a time of considerable risk.

Sheffield council is facing up to exactly the same problems as other northern cities are facing. Unfortunately, it is choosing to delay its cuts until after the local elections, when either that deferral of the cuts will help win the election, as it hopes, or more likely the problem will be passed on to a new, Labour council. It is hiding the reality of the cuts from the people of Sheffield. In reality, Sheffield council is facing the same funding reductions as councils in similar cities, and will therefore face the same cuts to front-line services and the same loss of jobs, not merely in the public sector but in the private and voluntary sectors. The Budget will do absolutely nothing to address the situation.

Rebalancing the UK Economy

Clive Betts Excerpts

Wednesday 3rd November 2010 Westminster Hall

[David Mowat (Warrington South) (Con)]

The right answer to the question of how to rebalance the economy is not to shrink the financial services sector. However, the fact remains that we have the largest financial services sector in relation to the rest of the economy of any advanced economy; the financial services sector accounts for something like 27% of our economy. The interesting policy question is whether we want that percentage to increase as a percentage of the whole or whether we want everything in the economy to increase together.

I think that you also raised a point about the public relations problems that banks are suffering at the moment. Of course, banks have made a huge contribution to our economy, but during the last two years they have sucked in something like £150 billion-worth of Government money and they are not really answering the question about how they should restructure themselves. That question has been left to the Bank of England and others—whether through the Glass-Steagall Act, or whatever—to answer. Until the banks do that themselves, they will continue to be criticised over bonuses.

[Mr Clive Betts (in the Chair)]

Order. I want to say something to the three hon. Members who have made interventions. It is fine that you made interventions, but on each occasion you have used the word “you” as part of your comments. This is just a small reminder—I did not want to stop you in mid-flow.

[Mr Field]

It is a credit to you, Mr Betts; it must be the informality of these arrangements that have allowed my colleagues to drop their guard somewhat.

I think that there is a lot in what my hon. Friend just said. As he rightly pointed out, in many ways a huge amount of money has been pumped into the financial services sector, yet there seems to be very little idea of what the global landscape of banking and finance will look like in the future.

The Government have a part to play in the process. We are, after all, majority stakeholders in two of the big four banks—the Lloyds Banking Group and the Royal Bank of Scotland—and we need to utilise that muscle to try to make a case for how the banking world should look in the future.

To some extent, there has been a somewhat confused strategy that has been of no benefit to the Government, the banks or the public. In essence, the risk is that we are now penalising our single most competitive economic sector, while somehow fooling ourselves that a miraculous rebalancing of the economy can occur by default. In truth, the rebalancing will only be threatened by diminution of the financial services sector. Let us not forget why, on the whole, a thriving City makes for a successful Britain.

Since time immemorial, the City of London has enjoyed an international reputation as a bastion of commercial certainty and reliability. It has promoted financial innovation, it has provided an international market for global merchants and in commercial affairs it has rightly been seen as a watchword for justice, neutrality and fairness. Of course, it also has a number of innate advantages that ensure that companies’ loyalty to London runs deeper than just appreciation of its tax regime. Those advantages include, of course, a time zone that lies between those of north America and Asia, which makes the City an excellent base for international company headquarters, and the lifestyle assets of a culture, an excellent educational offering and a population so diverse that all can feel at home.

As a result, London has emerged as the global financial centre. Indeed, so successful has the British financial services sector been that it now contributes more than 10% of Britain’s economic output. We should also remember that although the sector is focused in central London, a significant amount of its activity takes place in a range of regional centres in the UK.

Of course, it is not only banks that benefit from our financial sector but complementary industries such as law, insurance, retail and entertainment, as my hon. Friend the Member for Newton Abbot (Anne Marie Morris) pointed out. Our top-flight universities, the arts and the charitable sector also gain, the latter two from cultural funds or corporate responsibility grants that are, of course, often provided by the City’s top banks and bankers. The presence of our large financial sector gives London the critical mass to attract the best professionals from across the globe.

Banking bail-outs notwithstanding, the financial services sector contributes massively to the Treasury’s coffers in tax revenues, with an estimated contribution of £61 billion in 2008-09. Of course, it also contributes massively in terms of employment, with more than 1 million people employed directly in financial services across the UK.

The financial services sector also plays a critical role in supporting business, not only in attracting huge inward flows of foreign capital to help to fund our infrastructure but in propping up our companies and providing British companies with access to a diversified source of capital, to enable them to invest and expand.

Even if opposition to City dominance is practical rather than simply ideological, I suspect that it is unlikely any time soon that any other economic sector will be a world-beater in the way that the financial services sector is. I am afraid that the industries in which we are hoping to diversify are ones where competition will be very stiff. For example, the Chinese are as keen to develop their manufacturing capacity when it comes to green technology as we are.

Moreover, we should not assume that people in developing countries will start to spend their savings as the western world weans itself off debt and consumption. Britain is just one of the nations that have been pinning some of their hopes on export-led growth. However, despite a 20% depreciation in the value of the pound, the UK’s trade deficit has continued to widen. Meanwhile, with uncertainty infecting the financial system, British corporations have shown little appetite for expansion any time soon, as they accumulate cash cushions instead of investing.

Comprehensive Spending Review

Clive Betts Excerpts

Wednesday 20th October 2010 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. These decisions are absolutely vital to provide economic stability and to make sure that Britain does not go back to the brink of bankruptcy. What I would say to my hon. Friend and his constituents, many of whom work extremely hard and for long hours to pay their taxes, is that it is not acceptable for those taxes to go into the debt interest that we pay to foreign creditors when we really want the money spent here at home. That is what this is all about—trying to reduce our debt bills and bring some economic stability by reforming a welfare state that, frankly, grew out of control. We have taken the decisions today. If people have alternatives, they can put them on the table.

[Mr Clive Betts (Sheffield South East) (Lab)]

With regard to the new rents at 80% of market rent levels for social housing tenants, when a tenant is out of work, will the rent be covered totally by housing benefit? In that case, is there no new money to pay for social housing? When a tenant is in work or seeking it, will not these new higher rents provide a disincentive to going out to work? Will the rents apply to existing tenants who seek to move home, which would be a disincentive to mobility?

[Mr Osborne]

We have had to take some difficult decisions on housing benefit, but I think they are fair and we have sought to protect the most vulnerable. Of course, the universal credit we are introducing means that it will always pay to work—that is the basic principle and housing benefit is part of it. The Secretary of State for Communities and Local Government will set out the reforms in detail. The principles are set out in the document, which the hon. Gentleman can look at. As I said, existing social tenants will be protected through their rent agreements.

Oral Answers to Questions

Clive Betts Excerpts

Tuesday 8th June 2010 Commons Chamber

[Justine Greening]

We have said that we want to see the bulk of the deficit reduced by restraining public spending. I know that a number of other countries have taken proportions of roughly 80%:20% on restraining public spending and increasing taxes. We are particularly keen to cut out as much of the waste as possible. As we work our way through the previous Government’s horrific spending plans—not that they had any projections into the future—we will do our best to make sure that we do not just bring down our public spending, but use this opportunity to ensure that it delivers better public services for the public whom it is there to serve.

[Mr Clive Betts (Sheffield South East) (Lab)]

In The Sun the Deputy Prime Minister wrote about the enticing prospect of progressive cuts. Can the hon. Lady explain what a progressive cut would look like?

[Justine Greening]

The hon. Gentleman might be better off directing that comment to the Deputy Prime Minister. I did not see it in the paper. We are conscious of the need to make sure that we can protect front-line services that people depend on. We have already debated pensions this morning, for example, and we are doing our best to protect money that supports the most vulnerable in our society.