Pensions

Debate between Nigel Evans and Jack Dromey

Monday 4th May 2020 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab) [V]]

Thank you, Mr Deputy Speaker.

Following on from what the Pensions Minister said, our country is gripped by the greatest crisis since 1945, and in the great battle to save jobs and livelihoods I too have nothing but praise for the DWP staff, who, together with key and essential workers throughout our country, have been utterly magnificent in rising to the challenge of protecting the public and the public interest. We will come through this, not least because in an hour of darkness what we saw was our staff, the very best of Britain, rising to the challenge, putting themselves on the line to support others, sometimes in desperate difficulty and occasionally putting themselves in harm’s way, to do the job they are determined to do. They deserve nothing but our warmest praise.

The Pensions Minister has heard me say before that auto-enrolment, introduced by the last Labour Government, was a landmark achievement. It is deeply welcome that there has been a continuity of policy, as a consequence of which 10.2 million people are now saving £90 billion a year via auto-enrolment. We are seeing extraordinary benefits: for example, 77% of people are now engaged in a workplace pension. It was a dream that we would ever make such progress in years gone by; it was a vision that we gave birth to and carried forward. I stress once again that I welcome the continuity of policy on the part of the Government.

There is undoubtedly room for improvement with auto-enrolment; 8% cannot be the summit of our ambition —the £10,000 threshold and the age of 22 threshold likewise. There are improvements that require to be made at the next stages, including tackling the deep-seated problems for the self-employed. Having said that, it is absolutely right that we celebrate the progress made thus far.

Turning to the statutory instruments, we must constantly broaden the scope of auto-enrolment to take in yet more workers on the one hand and ensure that nobody falls out on the other. To that end, these statutory instruments are necessary; otherwise, the interests of maritime workers and seafarers would be put at risk, and that cannot be right, not least because of the job that they do. The sunset clause that would otherwise have created real problems for continuity requires to be dealt with by way of these statutory instruments, and we are therefore pleased to endorse them and we will certainly not be voting against them.

Going forward to the next stages, in the spirit that the Pensions Minister referred to I say that we have monumental problems as a country and I am in no doubt whatsoever that there will be significant implications for pensions and future generations of pension earnings for years to come. But today these are necessary statutory instruments, which we are more than happy to support.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. There is a 10-minute limit on contributions and I hope contributors have timing devices so they do not go over that limit.

Income tax (charge)

Debate between Nigel Evans and Jack Dromey

Monday 16th March 2020 Commons Chamber

[Jack Dromey (Birmingham, Erdington) (Lab)]

A dark cloud is descending on our world, threatening the lives and livelihoods of millions of people across the globe. We have only to see what is happening in Italy to recognise just what could be coming to our own country. The health service, the police service and social care, already stretched by 10 years of austerity, are stretched even further. None the less, now is not the time to panic, nor is it the time to engage in politics as usual. There needs to be a unity of purpose across the House, particularly on two key objectives. The first is to protect our people, especially the elderly and vulnerable. The second is to minimise the impact on our economy, ensuring that, nationally and internationally, a global recession does not happen, and does not become a global depression.

Last week, the Chancellor said that manufacturing was going through a tough period. That may prove to be an understatement. We were facing a tough period before the advent of the virus. According to the Office for National Statistics, we started 2020 with a flatlining economy, and

“yet another decline in manufacturing, particularly the drinks, car and machinery industries.”

That is why Make UK, the old Engineering Employers’ Federation, rightly called on the Government yesterday to step in to limit coronavirus damage to prevent further drastic decline in manufacturing and large-scale job losses.

There were a series of positive messages in the Budget, which I welcomed—no doubt about it. Crucially, though, the Government need to do more during the next stages. It was welcome that the Budget included measures relating to the environmental transformation of the automotive industry, by which I mean the move to electric cars. For the next stage, it is important that we see further significant moves, of the kind that the Society of Motor Manufacturers and Traders has called for, on tax-free electric vehicles—£5,000 off VAT on vehicles alone—which would greatly boost the production and sale of electric vehicles. It was my own experience that led me to that view. During the global crash in 2008, when I was deputy general secretary of the old Transport and General Workers’ Union—we later became Unite—Tony Woodley and I were involved in negotiations with the then Labour Government on emergency measures, one of which was the scrappage scheme. As a consequence of that scheme, 400,000 cars were built. That avoided what could have been a catastrophe in the automotive industry. In the first six months of the scheme, notwithstanding what was happening in the global and domestic economy, we saw a 31% increase in the registration of new cars. Had it not been for that scrappage scheme, we would have seen the closure of those car plants.

With my right hon. Friend the Member for Wentworth and Dearne (John Healey), I was also involved in the negotiation of the Kickstart programme, which saw 115,000 homes built, some 110,000 jobs safeguarded and the saving of thousands of small and medium-sized businesses that would otherwise have gone to the wall. Those big measures were critical at the time. This Government need to think big going forward. Crucially, they need to bring together the voice of the world of work. The employers and the trade unions need to discuss the key next stage objectives especially, as the right hon. Member for Tunbridge Wells (Greg Clark) said in his excellent speech, in relation to short-term working. That has been called for by the SMMT, the aerospace, defence, security and space industries, Unite, the TUC, and the GMB.

I am talking about employers’ organisations and unions coming together to argue that such arrangements have the ability to protect the industrial capacity of British manufacturers. In particular, they pray in aid the German model, which was first used in 2008, significantly expanded and then followed by other countries such as Japan, Belgium, France, and Austria. That scheme created a fund to pay workers up to 60% of their foregone net wages if factory production were temporarily cut. The scheme allowed employers to cut production temporarily without cutting jobs, thereby maintaining vital capacity. It was credited by the OECD for saving 500,000 jobs in German industry. Back then, unemployment held at 7.5% in Germany—a rise of just 0.2%. The country therefore managed to preserve the capacity to undertake the rebuilding of the economy. Jobs were saved, pay continued, and experience and skills were retained.

That model is being used successfully in response to covid-19 in Denmark, where the Government have brought together unions and employers’ associations, and agreed a deal for affected industries whereby the state pays 75% of workers’ wages and employers pay 25%. Workers also give up five days of paid holiday, and in exchange there are no lay-offs. In the words of the Prime Minister of Denmark:

“If there’s a big drop in activity, and production is halted, we understand the need to send home employees. But we ask you: Don’t fire them”.

Only this afternoon, a major employer in my constituency that has invested massively in increasing its capacity—I cannot name the company—has said that it desperately needs short-term measures to preserve that capacity, if it is to be able to rebuild after the immediate challenges posed to the economy.

Although there are welcome measures in the Budget, the Government need to be more ambitious at the next stages and to work with the world of work. There is no question but that the threat posed is enormous and real, not only to life and limb, but to our economy and ability to recover. What we do now will determine whether we have recession or depression. The role of the Government, working with the world of work, is key to that process. I urge the Government to rise to that challenge.

[Mr Deputy Speaker (Mr Nigel Evans)]

There are three maiden speeches on the Government Benches, and the usual conventions apply. Although we can be flexible when the time limit hits zero, that limit is not elastic.