Tax Fairness

John Bercow Excerpts

Tuesday 12th March 2013 Commons Chamber

[Mr Speaker]

I inform the House that I have selected the amendment in the name of the Prime Minister.

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[Mr Gibb]

rose—

[Mr Speaker]

I do not think the hon. Member for Nottingham East is giving way; he has completed his speech. I call Mr David Gauke.

Economic Policy

John Bercow Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

The shadow Chancellor finds himself in the contradictory position of seeking an urgent question on a rating decision which he says we should ignore, about a debt burden that he admits he would add to, in order to attack a Government who are sorting out the mess that he created. What exactly is his policy? Six times on the radio he was asked this weekend whether the answer to too much borrowing is to borrow even more, and he would not answer the question. It is an economic policy that dare not speak its name, from a shadow Chancellor who refuses to be straight with the British people. Finally, he was confronted on the radio by the simple statement:

“I, Ed Balls…would borrow more”

and he admitted,

“Yes, that is what I would do.”

Does not that admission completely undermine his entire argument today? A deliberate decision to borrow more—[Interruption.]

[Mr Speaker]

Order. Government Back Benchers, whatever their intentions, are in danger of shouting down their own Chancellor. Mrs Perry, calm yourself. There is always another day.

[Mr Osborne]

Government Back Benchers are as baffled as I am by the shadow Chancellor’s economic policy, which he has just had a few minutes to explain and still there is no explanation. His answer to a debt crisis is to borrow more. His answer to too much borrowing is to add to it. That is the problem he has, ultimately—that he is responsible for the mistakes that got Britain into this economic mess. This is the verdict from the leading Citi economist, Michael Saunders, today:

“In our view, the underlying causes of the UK economy’s weakness—and hence the rating downgrade—stem from the surge in private credit and public spending during 2000-2007.”

Who was in charge of economic policy during that period? The right hon. Gentleman is the architect of the mistakes that gave Britain its debt problem. He ignores the solution to that debt problem. He is condemned to repeat those mistakes and, as a result, his party is condemned never to be trusted with the public finances again.

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[Gordon Birtwistle (Burnley) (LD)]

Does my right hon. Friend agree that the shadow Chancellor would himself get a triple A rating for his skill in running this country down? Does he also agree that the hard-working people of this country are getting—[Interruption.]

[Mr Speaker]

Order. The hon. Member for Burnley (Mr Birtwistle) should resume his seat. I must say to Members that I am trying to ascertain whether the question is in order; it might or might not be, but it is very difficult to hear. I can make a judgment only if I can hear it, and that means Members need to stop shrieking. Let us hear the hon. Member for Burnley and see whether he is in order.

[Gordon Birtwistle]

Thank you, Mr Speaker. I am sure that you will find that it is totally in order. Does my right hon. Friend agree with the rest of the people that they are getting sick and tired of the shadow Chancellor’s politically motivated antics?

[Mr Speaker]

I am bound to tell the hon. Member for Burnley that I am always very grateful to him for his advice, but I think that on the whole I can probably get by without it, and only by a very generous interpretation—I am in a generous mood—could that be considered to be in order, but I will happily have the Chancellor briefly respond.

[Mr Osborne]

My hon. Friend is right that what is completely extraordinary is that we have constant criticism from the shadow Chancellor of our fiscal policy but not a clue from him about what he would do except add to borrowing. He has made it very clear that he would add to borrowing, although he has not said by how much, and he has not said which of the cuts he would stick with and which he would oppose, so until we have a credible alternative, we will not have a credible shadow Chancellor.

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[Mr Osborne]

We inherited an incredibly difficult situation. The economy had contracted by 6%; we were experiencing the deepest recession in the country’s modern history, and arguably the worst financial crisis in its entire history. Since then we have made difficult decisions, but they have seen interest rates stay low, they have seen the deficit come down, and they have seen the creation of a million jobs. The hon. Gentleman should be welcoming that.

[Mr Speaker]

I call Mr Flello. Is Mr Flello still with us to give us his views?

[Robert Flello (Stoke-on-Trent South) (Lab)]

I am most grateful, Mr. Speaker. This is definitely worth waiting for. I have handwritten notes.

If one of the Chancellor’s pals in one of the banks had lost that bank’s triple A credit rating, he would have gone. Will the part-time Chancellor now either become full-time and change his plan, or go?

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[Mr Osborne]

He asks where it is; it is being built at the moment. For 13 years people wanted that road and it was not produced, but it is now being produced under this Government.

[Mr Speaker]

I thank the Chancellor of the Exchequer and, for that matter, the 69 Back-Bench Members who contributed in 57 minutes of exclusively Back-Bench time for their notable succinctness.

Infrastructure

John Bercow Excerpts

Tuesday 12th February 2013 Commons Chamber

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry, but in order to accommodate remaining colleagues, it is necessary to reduce the time limit on Back-Bench speeches to six minutes with immediate effect. Apologies, but that has to be done.

Oral Answers to Questions

John Bercow Excerpts

Tuesday 29th January 2013 Commons Chamber

[Sajid Javid]

I know that the hon. Gentleman is a man of principle, and I have respect for him, particularly since he refused to work for the right hon. and learned Member for Camberwell and Peckham (Ms Harman); I do not blame him. I note that on his website he says that he has

“a strong commitment to supporting the…less well off in society.”

He is absolutely right and I agree with him, so perhaps he can explain why he is against a measure that is targeted at the 15% of people who are the highest earners in society. [Interruption.]

[Mr Speaker]

Order. Question Time must be conducted in an orderly way. It is not for a Minister to suggest that a Member should start getting up and answering questions. It is Ministers who answer questions, and that is the end of it.

[Barry Gardiner]

Will the Minister discuss with his colleagues in the Home Office and the Department for Work and Pensions the effect of the combined changes that those Departments and the Treasury have made, which mean that a young child in my constituency—a British child whose mother has leave to remain and work in the UK but who is estranged from their British father as a result of his domestic violence—will now not be able to receive child benefit for at least 10 years?

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[Mr Osborne]

I do not think that the hon. Lady is being completely straight with the House about the numbers she is using—[Hon. Members: “Withdraw.”]

[Mr Speaker]

Order. Hon. Members may leave this to me. The Chancellor is very versatile in his use of language and he can rephrase that. No Member would be other than straight with the House. He should withdraw that term and use another, and I feel sure that he will do so.

[Mr Osborne]

Of course I withdraw it and would simply say that the hon. Lady has been very creative in the use of the numbers that she has put before the House. The number she is using is the amount of money that Labour was spending on capital before the general election, but it set out plans to cut capital after the general election. We have exceeded those plans, and it is completely hypocritical for the Labour party to claim that it would have spent more on capital when it clearly would not have.

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[Sajid Javid]

As a child, I lived in a two-bedroom flat with seven people, and I saw child poverty on my street every day. I know that the hon. Lady cares passionately about this issue—[Interruption.]

[Mr Speaker]

Order. The House must calm down. The Minister’s answer must be heard.

[Sajid Javid]

I respect the hon. Lady for caring passionately about this issue. She served as a commissioner on child poverty in London and has considered the issue deeply, so I hope she agrees that there is no sense in having a measure of child poverty that just looks at relative income. It is far more important that we all come together and look at education, jobs and access to health services, and have a proper measure of child poverty if we are to truly eradicate it.

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[Mr Gauke]

A moment or so ago we heard lots of shouting about the 50p rate, yet the Labour party is the first to defend the idea that those very people should continue to receive benefits. Ensuring that child benefit is targeted best meant either looking at this on a household basis—which would have meant putting 8 million households into the tax credit system—or adopting the approach that we have chosen, but the Labour party is always there, ready to spend taxpayers’ money where—

[Mr Speaker]

Order. We are obliged to the Minister, but we will move on to one more question.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

16. What progress has been made in making compensation payments under the Equitable Life payment scheme.

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[Steve Brine (Winchester) (Con)]

T4. A number of my constituents—[Interruption.]

[Mr Speaker]

Order. This is a considerable discourtesy to the House. The hon. Gentleman must have his question heard.

[Steve Brine]

Thank you very much, Mr Speaker.

A number of my constituents have been caught out by the high interest rates charged on payday loans. At a time when many families are struggling with high levels of personal debt, what are the Government doing to ensure that consumers are protected against bad practices in that industry and the often extremely high interest rates that are charged on such loans?

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[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry to disappoint colleagues. It is always box office, and demand has greatly exceeded supply. We must now move on to the urgent question.

Business without Debate

John Bercow Excerpts

Monday 7th January 2013 Commons Chamber

Statute Law (Repeals) Bill [Lords]

[Mr Speaker]

The question is that the Bill be now read a Second time—

[Mr Robert Syms (Poole) (Con)]

rose—

[Mr Speaker]

I am not sure why the hon. Gentleman was hovering, although I am sure his hover was well intentioned. We shall move to the vote.

Motion made, and Question put forthwith (Standing Order No. 58), That the Bill be now read a Second time.

Question agreed to.

Bill accordingly read a Second time.

Motion made, and Question put forthwith, That the Bill be not committed.—(Mr Syms.)

Question agreed to.

[Mr Speaker]

I thank the hon. Member for Poole (Mr Syms) for rising to move the motion; the choreography is everything in these matters.

Motion made, and Question put forthwith, That the Bill be now read the Third time.

Question agreed to.

Bill accordingly read the Third time and passed, without amendment.

Oral Answers to Questions

John Bercow Excerpts

Tuesday 11th December 2012 Commons Chamber

[Mr Baron]

The Labour Government more than doubled the national debt. This Government have done well to reduce the deficit by 25%, but this still means that we are adding to our debt, albeit at three quarters the pace. Financial repression and quantitative easing will ease the debt somewhat through higher inflation, but may I encourage the Chancellor, despite some positive measures in the autumn statement, to be bolder in encouraging economic growth, including by cutting small business corporation tax, which is the only credible way—

[Mr Speaker]

Order. We have got the gist of it; it was simply too long.

[Mr Osborne]

My hon. Friend is right that the deficit is how much we add to the debt each year. That is why we have to bring the deficit down—it has come down by 25%—but he is also right that we have to have a competitive private sector. We have to have a private sector-led recovery, which is why we have increased the annual investment allowance, for example. He recommends a cut in the small company corporation tax rate. [Interruption.] The shadow Chancellor from a sedentary position said, “That’d be a good idea,” but he was going to put the rate up when we came into office. We have cut the rate to 20% and increased the annual investment allowance.

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[Mr Osborne]

It is welcome that more than 1 million jobs have been created in the private sector. We now have record female employment, which is also welcome, while the number of those on out-of-work benefits has fallen by 190,000, which is something I hope everyone would welcome.

[Mr Speaker]

I call Richard Graham. Not here.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

May I congratulate the Chancellor on his U-turn on capital allowances for manufacturing industry? When did he realise that his previous stance of dismissing them as complex reliefs was wrong and at total variance with the Government’s stated aim of supporting manufacturing? When did his conversion to supporting these allowances take place, as long called for by Labour Members and the Engineering Employers Federation?

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[Sajid Javid]

I am not going to take any lectures on child poverty from the right hon. Gentleman—[Interruption.]

[Mr Speaker]

Order. The Minister must be heard.

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[Graham Evans]

I welcome the announcements in the autumn statement, particularly the announcement of an increase in the personal allowance, which will take 2.6 million people in the north-west of England out of income tax altogether. Will my right hon. Friend reassure us that he will continue to raise the allowance to ensure that it always pays to work?

[Mr Speaker]

In relation to the cost of living?

[Graham Evans]

Indeed, Mr. Speaker.

[Geraint Davies (Swansea West) (Lab/Co-op)]

The—

[Mr Speaker]

Order. Labour Members are shouting their heads off, and the hon. Gentleman cannot be heard. Let us hear from Mr Davies.

[Geraint Davies]

The incomes of the top 10% in Britain have risen by 11% in the last two years, but we heard in the autumn statement that they would be cut by only 0.5%. Does Chief Secretary not agree that those people are in a fantastic position to take on increases in the cost of living, unlike the poorest 40%, who are being unnecessarily smashed by this Government?

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[Mr Osborne]

It is good to see the shadow Chancellor back. Of course tax credits go to some people in work, but we are also helping those people with a personal allowance increase, and working households will be £125 better off. Perhaps he can answer a question, if that is allowed, Mr Speaker: how will Labour vote on the Bill?

[Mr Speaker]

It is very important that the public are not misled, however inadvertently, by a member of the Government. This is not an occasion for shadow Ministers to answer questions. In our system, they ask questions and Ministers are expected to answer them. That is the situation.

[Ed Balls]

I will answer, though, Mr Speaker, but before I do it is important that Members on both sides of the House know the answers to the questions I asked the Chancellor. First, 60% of families hit by his tax and benefit changes are in work. Secondly, according to the Institute for Fiscal Studies, as a result of the autumn statement measures a working family—the average one-earner couple—will be £534 a year worse off by 2015. Those are the very families who pull up the blinds and go to work. Every Tory constituency has, on average, over 6,000 of those families who will lose out. In answer to his question, we will look at the legislation, but if he intends—[Interruption.] He asked me a question and I am going to answer it. If he intends to go ahead with such an unfair hit on middle and low-income working families while giving a £3 billion top-rate tax cut, we will oppose it. Why is he making striving working families pay the price for his economic failure?

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[Mr Brooks Newmark (Braintree) (Con)]

The Treasury has today made a written statement alerting Parliament to a newly discovered error made by Northern Rock—an error made, I hasten to add, under the previous Government, starting in 2008—that could cost the taxpayer hundreds of millions of pounds. Does my right hon. Friend agree that this is yet another example of the previous Government’s total failure to regulate the banking system properly costing this country dearly? Could he—[Interruption.]

[Mr Speaker]

Order. May I gently explain to the hon. Gentleman two things? First, topical questions are supposed to be brief, and secondly, they are supposed to relate to the policy of the current Government, not that of the previous one. A short one-sentence reply will, I am sure, suffice—no?

[Mr Osborne]

Will you allow me, Mr Speaker, to spend a little time on this? We put down a written statement at half-past 11 today because of an error originating in 2008, when Northern Rock was in public ownership. Some customers with certain types of mainly unsecured loans were not given all the mandatory information in their statements to which they were entitled by law. As a result, interest payments on these loans are not legally enforceable. UK Asset Resolution, which manages Northern Rock—[Interruption.] Can I just make this point? One hundred and fifty—[Interruption.]

[Mr Speaker]

Order.

[Geraint Davies (Swansea West) (Lab/Co-op)]

rose—

[Mr Speaker]

Order. I do not require any help from the hon. Gentleman; he should concentrate on the pursuit of his own duties to the best of his ability. I would say to the Chancellor that if the written ministerial statement has been made it is not entirely obvious to me why we need its terms to be repeated before the Chamber. [Interruption.] Order. I will use my discretion. The right hon. Gentleman can have a few seconds more, but then I really must proceed with topical questions, for which allowance will have to be made.

[Mr Osborne]

Mr Speaker, 152,000 customers have been affected. These are people with loans of less than £25,000. The cost to UK Asset Resolution is estimated at £270 million. UK Asset Resolution has ordered a full inquiry into what happened in 2008, and we will come to the House with more information when we have it. I wanted to bring this news to the House at the very first opportunity, and I find it pretty extraordinary that the Opposition do not want the public to hear it.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

T7. New research from Which?—[Interruption.]

[Mr Speaker]

Order. Whatever discontent there may be on either side of the House about this matter, it would be a courtesy to hear Teresa Pearce.

[Teresa Pearce]

Thank you, Mr Speaker.

New research from Which? reveals that nearly half of front-line bank staff believe that pressure selling still dominates the culture of banking. Will the Minister join me in calling for banking remuneration and incentive structures to be changed to reward ethics and service, rather than aggressive selling targets, in order to help to change the culture of banking?

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[Mr Osborne]

We are dealing with the economic mess that the previous Government left behind, when unemployment rose, the economy shrank by 6% and people were put into poverty. That is the cause of these problems and Government Members are dealing with them and clearing up the mess that that man—the right hon. Member for Morley and Outwood (Ed Balls)—left behind.

[Mr Speaker]

Last but not least, Mr Bob Blackman.

[Bob Blackman (Harrow East) (Con)]

The Government moved swiftly to compensate the victims of the Equitable Life scandal, who were ignored by the Labour Government. The one set of people who were excluded from the legislation were the pre-1992 trapped annuitants. I know that the Minister has been considering this issue. Will he update the House on what consideration will be given to those weak and vulnerable people who just want some safety for the rest of their lives?

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry to disappoint colleagues.

Points of Order

John Bercow Excerpts

Tuesday 11th December 2012 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

On a point of order, Mr Speaker.

[Mr Speaker]

Exceptionally, I will allow a point of order, for reasons that will be apparent.

[Ed Balls]

May I have your guidance, Mr Speaker? Is it in order for the Chancellor of the Exchequer, pre-empting a written statement, to slip out news during topical questions about Northern Rock that could well have fiscal implications, including for Government borrowing, in a way that is designed to avoid any proper scrutiny or questioning from the Opposition? Is this not just another example of the Chancellor refusing to answer questions in this House? Would it not be in order for the Chancellor or another Treasury Minister to make an oral statement in this House today and be properly scrutinised, rather than once again playing fast and loose with the public finances and Parliament?

[Mr Speaker]

I will hear the Chancellor the Exchequer on this matter, and then I will give a verdict.

[The Chancellor of the Exchequer (Mr George Osborne)]

Further to that point of order, Mr Speaker. There was no pre-empting of the announcement. It was laid as a written statement one hour ago. I thought that it would be appropriate to illuminate the written statement in oral questions, as Ministers frequently do from the Dispatch Box. There is, of course, a debate on the economy this afternoon, during which we can answer questions. It relates to errors that took place in Northern Rock in 2008 that have affected a number of customers. Customers will be receiving letters from Northern Rock. As I said, I thought that it would be helpful to illuminate the details of the written statement, but apparently that is not the case.

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[Ed Balls]

rose—

[Mr Speaker]

The right hon. Member for Morley and Outwood (Ed Balls) is itching to raise a further point of order, but I ask him to hear what I have to say first. This cannot be a debate; there are a couple of points of order to which I am giving a reply. My response, whether Members like it or not, is as follows.

First, I feel sure that the Chancellor of the Exchequer intended to be helpful to the House. It is not for me to impugn motives, and I do not do so. However, was it a good idea to handle this matter via the device of topical questions in the way that it was done? The answer is no, it could have been better done. I am sure that the hon. Member for Braintree (Mr Newmark) was doing his best, according to his own lights, but it was unwise to deal with it in that way.

Secondly, I simply make the point—[Interruption.] It may be topical, but that does not necessarily mean that it should be raised at topical questions. My understanding, which is very easily explained, is that although something is a topical matter, it does not mean that it should be the subject of a topical question if the Government have tabled a written—

[Mr Brooks Newmark (Braintree) (Con)]

rose—

[Mr Speaker]

No, I do not require any assistance from the hon. Gentleman. He should do his own job to the best of his ability. I am giving a verdict on the matter.

The Government have laid a written ministerial statement. If they had wanted to make an oral statement, they could have made one. They did not do so, but made a written ministerial statement. I repeat: I am sure that the Chancellor meant well. That is the kindest thing, in the circumstances, that I can reasonably say. There is nothing further to be said on this matter now, but we may well return to it.

Financial Services Bill

John Bercow Excerpts

Monday 10th December 2012 Commons Chamber

Lords amendments 61 to 97 agreed to.

[Mr Speaker]

With the leave of the House, I propose to put Lords amendments 98 to 290 together.

[Chris Leslie]

Amendment 98 is in a separate group relating to clearing houses, and I would like to make some remarks.

[Mr Speaker]

The Minister will need to move amendment 98, and can do so.

Clause 27

Powers in relation to recognised investment exchanges and clearing Houses of Parliament

Motion made, and Question proposed,

That this House agrees with Lords amendment 98.—(Greg Clark)

[Mr Speaker]

With this it will be convenient to consider Lords amendments 99, 122 to 127, 224 and 225.

[Chris Leslie]

I would have thought the Minister wanted to speak, as Lords amendment 98 is the lead amendment of a group relating to the extension of resolution schemes from banks and building societies to investment firms and in particular UK clearing houses. There is a wider set of issues, therefore.

UK clearing houses stand between two parties in a trade, ensuring that a deal goes through in the event of one party defaulting. Once a deal is agreed, the transaction is honoured even if one party goes bust.

The Government’s decision to extend a set of resolution arrangements to clearing houses is incredibly important, as the debates in the other place set out. Clearing houses are highly significant entities nowadays. After the 2009 G20 summit, it was clear that several hundred trillion dollars of market transactions, especially in over-the-counter derivative arrangements, were part of the clearing house ambit. Therefore, a failure in a clearing house could clearly mean a big problem—a series of problems—for the financial services sector more broadly.

I have a series of questions for the Minister, as I would be grateful for his help in respect of the provisions of this amendment and others in this group. First, I want to ask him about today’s Financial Times, the front page of which talks interestingly about the extension of resolution plan arrangements from covering just companies within the UK to an agreement between the United States and the UK that the Bank of England seems to have struck which will mean, for the first time, that there is a template for larger, serious, significant international financial institutions to have resolution arrangements that span borders. Clearly that is relevant to these amendments on clearing houses. [Interruption.] I can tell that hon. Members are very familiar with these arrangements. Clearing houses have a great deal of cross-border interoperability, they cut across jurisdictions and there is a need to co-ordinate their work. Will the Minister assure the House that steps will be taken to ensure that international efforts are made to promulgate resolution arrangements that also cut across borders for clearing houses?

Central counterparty clearing arrangements these days contain a requirement also to hold Government bonds as collateral. As we know, Government bonds are not what they once were; there have been some questions about their safety. The Minister needs to explain: are we guarding against the deterioration of standards in central counterparty collateral arrangements? If we are increasingly reliant on gilt-edged securities of an international variety, are we actually ensuring that there is sufficient strength behind our central counterparty clearing arrangements?

Finally, may I ask the Minister a further question? Basel III arrangements will be ensuring that banks that are members of clearing houses need to capitalise their exposure to central counterparty contingent liabilities. Can he just give us a sense of the impact on the UK banking system, particularly on its capital adequacy, of processes that will see a rapid change on central counterparty arrangements from an over-the-counter arrangement to an exchange-based arrangement? If the regulators are insisting more and more on exchange-traded arrangements in those clearing houses, there will be an imperative for those clearing houses to become more and more price sensitive and they will be more desirable for the market more generally. That is why we are seeing so many mergers and acquisitions of clearing houses. Are these costs eventually going to be finding their way on to customers and our constituents? I would be grateful if the Minister replied.

Autumn Statement

John Bercow Excerpts

Wednesday 5th December 2012 Commons Chamber

[The Chancellor of the Exchequer (Mr George Osborne)]

It is taking time, but the British economy is healing. After the biggest financial crash of our lifetimes, people know that we face deep-seated problems at home and abroad. At home, we live with the decade of debt and the failure to equip Britain to compete in the modern world, and we face a multitude of problems from abroad—the US fiscal cliff, the slowing growth in China, and above all the eurozone, now in recession.

People know that there are no quick fixes to these problems but they want to know that we are making progress, and the message from today’s autumn statement is that we are making progress. It is a hard road, but we are getting there. [Interruption.] Britain is on the right track—[Interruption.]

[Mr Speaker]

Order. I ask the Chancellor to resume his seat. Let us be clear about this. Each side should be heard with courtesy. The House knows well enough by now that I will afford a very full opportunity for questioning of the Chancellor, but the more interruption and the greater the noise, the longer the session will take, and that cannot be right. So I appeal to Members please to give the Chancellor a courteous hearing, as indeed, if it becomes necessary, I will appeal to Government Back Benchers to afford a fair hearing to the shadow Chancellor. That is how it should be.

[Mr Osborne]

Britain is on the right track and turning back now would be a disaster. We have much more to do. The deficit has fallen by a quarter in just two years, and today’s figures show that it is forecast to continue to fall. Exports of goods to the major emerging economies, which were pitifully low, have doubled since 2009. Since this coalition Government came to office, 1.2 million new jobs have been created in the private sector. In a world economy where bond investors are fleeing countries that they regard as risky, investment is flowing into UK gilts, instead of flying from them. We have to keep it that way.

Two years ago, Britain was in the danger zone. Now we are seen as one of the safe havens, able to borrow money at lower interest rates than at any time in our history. Today’s forecast shows a £33 billion saving on the debt interest payments that it was predicted we would have to pay two years ago. That is as much as the entire defence budget. That is why in this autumn statement, we show that this coalition Government are confronting the country’s problems, instead of ducking them.

Today we reaffirm our commitment to reducing the deficit, setting out the details of our spending plans for 2015-16 and rolling forward an outline framework into 2017-18. We show our determination to do this fairly, with further savings from bureaucracy, the benefit bills and the better-off. We go on equipping Britain to succeed in the global race by switching from current spending to capital investment in science, roads and education. We offer new support for business and enterprise, so they can create the jobs we need. In everything we do, we will show today that we are on the side of those who want to work hard and get on.

The Office for Budget Responsibility has today produced its latest economic forecast and it is a measure of the constitutional achievement that it is taken for granted that our country’s forecast is now produced independently of the Treasury, free from the political interference of the past. I want to thank Robert Chote, his fellow members of the Budget Responsibility Committee, Steve Nickell and Graham Parker, and all their staff at the OBR for their rigorous approach.

One of the advantages of the creation of the OBR is that we get not only independent forecasts, but an independent explanation for why the forecasts are as they are. For example, if lower growth was the result of the Government’s fiscal policy, it would say so. But it does not. It says that the economy has “performed less strongly” than expected and forecasts growth this year of minus 0.1%, but in its view

“the weaker than expected growth can be more than accounted for by over-optimism regarding net trade”.

The OBR had previously assumed that the eurozone would begin to recover in the second half of this year. Instead, of course, it has continued to contract, which has hit our exports to those markets and the net trade numbers. The eurozone crisis has also, it says, spilled over into “tighter credit conditions” and

“elevated UK bank funding costs”.

In its words, those problems will

“constrain growth for several years to come”.

There are also domestic problems that the OBR refers to. In the report today the contraction in 2008-2009 is now assessed to be deeper than previously thought, with GDP shrinking by a staggering 6.3%, the largest shock to our economy since the second world war. In the OBR’s view, the aftermath of that shock continues to weigh on the productivity of the UK economy, with credit rationing and impaired financial markets potentially impeding the expansion of successful firms. It says:

“GDP growth is now expected to be lower in every year of the forecast period, as credit conditions take longer to normalise and global growth remains weaker than previously expected”.

As a result, the OBR forecasts that the economy will grow by 1.2% next year, 2.0% in 2014, 2.3% in 2015, 2.7% in 2016 and 2.8% in 2017.

So the economy is recovering, and it is recovering more quickly than many of our neighbours. The International Monetary Fund estimates that next year the UK will grow more strongly than either France or Germany. Our credible fiscal policy allows for supportive monetary policy and, with the Bank of England, we are directly addressing the problems of tight credit through the £70 billion funding for lending scheme. In the OBR’s view, that has reduced UK bank funding costs, lowered interest rates in the real economy and will add to the level of real GDP.

One area where the British economy has done much better than forecast is in creating jobs. Since early 2010, the private sector has created 1.2 million new jobs—600,000 more than predicted—and youth unemployment has been falling. The OBR now expects unemployment to peak at 8.3%, instead of 8.7%. That is at a time when the unemployment rate in Spain is 26%, in France it is 11% and across the whole eurozone it is almost 12%. Employment, which is already at a record high, is set to go on rising each year of the forecast. For every one job less in the public sector, two new jobs are expected to be created in the private sector. Britain now has a greater proportion of its people in work than either the eurozone or the United States of America. More jobs means that the impact of the weaker than forecast GDP on the public finances has been less than some might have expected.

There have been three developments that have each had a significant one-off impact on the public finances, and the report we are publishing today shows clearly and transparently the impact of all three. First, there is the transfer of the Royal Mail pension fund to the public sector as part of its privatisation. That produces a one-off reduction in the deficit of £28 billion this year, but it will add to the deficit in the years after.

Secondly, the previous Government had classified Bradford & Bingley and Northern Rock Asset Management as off balance sheet. Today, they are brought on balance sheet, in line with the judgment of the Office for National Statistics. That adds around £70 billion to our national debt and reminds us of the price the country is still paying for the failures of the past.

Thirdly, the Government have decided, with the agreement of the Bank of England, to transfer excess cash held in the asset purchase facility to the Exchequer. This is sensible cash management, and it is in line with the approach of the Bank of Japan and the US Federal Reserve. I welcome the OBR’s verdict that this is, in its words, “more transparent” than the previous approach. I want to make sure that its impact on the figures is also completely transparent, so we have today published the forecasts for the public finances with and without the impact of the APF decision.

When we came to office, the deficit stood at 11.2%—the highest in our peacetime history. It was forecast to be the largest of any major economy in the world. In the past two years, the deficit has fallen by a quarter. Today’s figures show that with or without the APF coupons, the deficit is forecast to fall this year as well, and cash borrowing is forecast to fall too. Last year, the deficit was 7.9%. This year, with the APF coupons, it is forecast to be 6.9%, but that excludes the impact of the Royal Mail pension assets. It is falling and it will continue to fall each and every year, to 6.1% next year, 5.2% the year after, 4.2% in 2015-16, then 2.6%, before reaching 1.6% in 2017-18.

In 2009-10, the country was borrowing £159 billion. This year, we are borrowing £108 billion. That is forecast to fall to £99 billion next year, £88 billion the year after, then £73 billion in 2015-16, and £49 billion and £31 billion in the two years after that. These are the central forecasts published by the OBR, with the asset purchase facility cash transfer included. When the transfer is excluded, as we show in the document, the deficit also falls, from 7.9% last year to 7.7% this year, then 6.9% next year, and it falls in every single year after that—and cash borrowing falls in every year as well.

There are those who have been saying that the deficit was going up this year—indeed, I think I heard it in Prime Minister’s questions—but any way you present these figures, this is not what the OBR forecasts show today. It says that the deficit is coming down—coming down this year and every year of this Parliament. Yes, the deficit is still far too high for comfort—we cannot relax our efforts to make our economy safe—but Britain is heading in the right direction. The road is hard but we are making progress.

Unlike the previous Government’s golden rule, the regime we have set up means that the Chancellor is no longer judge and jury of their own fiscal rules, and today the OBR has assessed us against those rules. First, the fiscal mandate: this is the commitment that we will balance the cyclically adjusted current budget over the coming five years. I can tell the House that the OBR has assessed that we are, in its words, “on course” to meet our fiscal mandate. In other words, we have a better than 50% chance of eliminating the structural current deficit in five years’ time—that part of our borrowing that does not recover automatically as the economy grows. This is true, again, with or without the transfer of the coupons, so we will meet our fiscal mandate. But the OBR assesses in its central forecast that we do not meet the supplementary objective that aims to have debt falling by 2015-16. The point at which debt starts to fall has been delayed by one year, to 2016-17, and the OBR’s central forecast is that net debt will be 74.7% this year, then 76.8% next year, 79% in 2014-15, and 79.9% in 2015-16, before falling to 79.2% in 2016-17 and 77.3% in 2017-18.

In short, the tougher economic conditions mean that while our deficit is forecast to go on falling, instead of taking three years to get our debt falling, it is going to take four. Confronted with this news, some say we should abandon our deficit plan and try to borrow more. They think that by borrowing more, we can borrow less. That would risk higher interest rates, more debt interest payments, and a complete loss of Britain’s fiscal credibility. We are not taking that road to ruin.

Then there are those who say that despite all that has happened in the world this year, we should cut even more now to hit the debt target. That would require £17 billion of extra cuts a year. Let me explain why I have decided not to take this course.

We have always argued that we should let the automatic stabilisers work. We have not argued that we should chase down a cyclical or temporary deterioration in the economy, particularly one that our own independent body says is largely driven by problems abroad. That is also the judgment of the International Monetary Fund, the OECD and the Governor of the Bank of England.

Our aim is to reduce the structural deficit—the permanent hole in our public finances that will not be repaired as the economy recovers. And we are—we have cut the structural deficit by 3 percentage points in the past two years, more than any other G7 country, and it is set to go on being cut at a similar rate in the years ahead. This lower deficit is delivered by our public spending plans and we are going to stick with those plans. Overall, we are not going faster or slower with those plans; the measures I will announce in this autumn statement are fiscally neutral across this Parliament. There is no net rise in taxes today—any taxes increased are offset by taxes cut.

In last year’s autumn statement, we committed the Government to maintain the same pace of consolidation for two further years beyond the end of the current spending review, into 2015 and 2016-17. In this year’s autumn statement, we extend the consolidation for one further year, into 2017-18. The OBR projects that, as a result, the share of national income spent by the state will fall from almost 48% of GDP in 2009-10 to 39.5% by 2017-18. The document shows that total managed expenditure will continue to fall, and will now be £4.6 billion lower in 2017-18 than if it had been held flat in real terms. No decision to cut spending is ever easy, but those who object must explain whether instead they would have higher taxes, higher borrowing or both.

I also provide further detail of the consolidation plans for 2015-16, the last year of this Parliament. I said two years ago that the correct balance for our fiscal consolidation between spending and tax should be 80:20. I can confirm that by the end of 2015-16, the decisions we announce today mean that we will almost exactly deliver on that 80:20 mix. Total spending will fall in the final year of this Parliament at the same rate as through the current spending review.

I can confirm today that the overall envelope for total managed expenditure will be set at £745 billion. We start with the working assumption that departmental resource totals will continue on the same trajectory as over the current spending review. The detail of departmental spending plans for 2015-16 will be set at a spending review, which will be announced during the first half of next year. What we are doing today is taking steps now to help deliver those spending plans and to go on reducing the deficit in a way that is fair.

This Government have shown that it is possible to restore sanity to the public finances while improving the quality of our public services—crime has fallen, hospital waiting lists are down, school standards are up—and this is with a civil service that is today smaller than at any time since the second world war.

We are today publishing the reports we commissioned from the pay review bodies on market-facing pay. We commit to implementing these reports. This means continuing with national pay arrangements in the NHS and Prison Service, and we will not make changes to the civil service arrangements, either; but the School Teachers Review Body recommends much greater freedom to individual schools to set pay in line with performance, and my right hon. Friend the Education Secretary will set out how that will be implemented.

Through the efforts of individual Government Departments and the support of the Chief Secretary and my right hon. Friend the Minister for the Cabinet Office, we have already generated £12 billion of efficiency savings in Whitehall, but we believe there is room to do even more. If all Departments reduced their spending on administration in line with the best-performing Departments, such as Education and Communities and Local Government, another £1 billion could be saved. If all Departments made greater provision of digital services, rationalised their property estates, as some have done, a further £1 billion could be saved. Today, therefore, we are reducing departmental resource budgets by 1% next year and 2% in the year after.

We will continue to seek efficiency savings in the NHS and in our schools, but that money will be recycled to protect spending in these priority areas. Local government budgets are already being held down next year to deliver the freeze in council tax, so we will not seek the additional 1% savings next year, but we will look for the 2% saving the year after. Although the Ministry of Defence is included in these measures, it will be given flexibility on its multi-year budget to ensure that this will not lead to reductions in military manpower or the core defence equipment programme over the Parliament.

A mark of our values as a society is our commitment to the world’s poorest. We made a promise as a country that we would spend 0.7% of our gross national income on international development and I am proud to be part of the first British Government in history who will honour that commitment and honour it as promised next year. We will not, however, spend more than 0.7% so, as we did last year, we will adjust the Department for International Development’s budget to reflect the latest economic forecasts.

In the medium term these savings across Whitehall will help Departments maintain the right trajectory for the years that follow the spending review and help us to pay off the deficit in future. In the short term, I am switching these current savings into capital—all the money saved in the first two years will be reinvested as part of a £5 billion capital investment in the infrastructure of our country. Despite the fiscal challenges we face, public investment as a share of GDP will be higher on average in this Parliament than it was under the last Labour Government. It is exactly what a Government equipping Britain to compete in the modern global economy should be doing.

We are committing an extra £1 billion to roads, which includes four major new schemes: to upgrade key sections of the Al, bringing the route from London to Newcastle up to motorway standard; to link the A5 with the Ml; to dual the A30 in Cornwall; and to upgrade the M25, which will support the biggest port developments in Europe. I pay tribute to my hon. Friend the Member for Thurrock (Jackie Doyle-Price) for campaigning to achieve this.

We have already set out plans this autumn for a huge investment in rail, and my right hon. Friend the Transport Secretary will set out in the new year plans to take High Speed 2 to the north-west and west Yorkshire. I can today confirm a £1 billion loan and a guarantee to extend the Northern line to Battersea power station and support a new development on a similar scale to the Olympic park.

We are confirming funding and reforms to assist construction of up to 120,000 new homes and delivering on flood defence schemes in more cities. On top of broadband expansion for our countryside and our larger cities, we are funding ultrafast broadband in 12 smaller cities: Brighton and Hove, Cambridge, Coventry, Derby, Oxford, Portsmouth, Salford, York, Newport, Aberdeen, Perth and Derry/Londonderry. In addition to the third of a billion announced this autumn for British science, we are today announcing £600 million more for the UK’s scientific research infrastructure.

Since improving our education system is the best investment in a competitive economy, I am today committing £270 million to fund improvements in further education colleges and £1 billion to expand good schools and build 100 new free schools and academies. Scotland, Wales and Northern Ireland will get their Barnett share of additional capital spending put at the disposal of their devolved Administrations.

On top of the £5 billion of new capital spending in infrastructure and support for business, we are ready to provide guarantees for up to £40 billion more. Today I can announce that projects worth £10 billion have already pre-qualified. We are offering £10 billion-worth of guarantees for housing, too. Our country’s pension funds will launch their new independent infrastructure investment platform next year as well, and we have today published full details of the replacement for the discredited private finance initiative. Since we can all see now that the public sector was sharing the risk, we will now ensure that we also share in the reward, and I commend my hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman) for his work in this area.

Taken together, this is a revolution in the sources of finance for upgrading Britain’s infrastructure and equipping Britain to win in the global race. Annual average infrastructure investment, which was £29 billion under the last Labour Government, is now £33 billion.

Savings from Whitehall are not enough by themselves to tackle our debts. We need to find other savings, and we need to do so in a way that is fair. Those with the most should contribute the most, and they will, but fairness is also about being fair to the person who leaves home every morning to go out to work and sees that their neighbour is still asleep, living a life on benefits. As well as a tax system where the richest pay their fair share, we have to have a welfare system that is fair to the working people who pay for it.

Let me start with tax. The vast majority of people, rich or otherwise, pay their taxes and make their contribution. However, there are still too many who illegally evade their taxes or use aggressive tax avoidance in order not to pay their fair share. This Government have taken more action against those people than any before us. Prosecutions for tax evasion are up 80%. We will collect £7 billion more a year in tax that is due than the last Government. We are increasing by about 2,500 the number of tax inspectors going after evaders and avoiders. Next year, we will introduce the first ever general anti-abuse rule—something that never happened in the 13 years before we came into office.

Next year, for the first time in our history, money will be flowing from bank accounts in Switzerland to Britain, instead of the other way around. Because of the treaty that we have signed, we expect to receive £5 billion over the next six years from the undisclosed Swiss bank accounts of UK residents. That is the largest tax evasion settlement in British history.

We are taking further steps today. Hundreds of millions of pounds of tax loopholes are being closed with immediate effect, and we are investigating the abusive use of partnerships. HMRC will not have its budget cut over the next two years, unlike other departments. Instead, we will spend £77 million more on fighting tax avoidance, and not just for wealthy individuals.

We want to have the most competitive corporate tax system of any major economy in the world, but we expect those corporate taxes to be paid. We are therefore confirming today that we will put more resources into ensuring that multinational companies pay their proper share of taxes. We are leading the international effort to prevent artificial transfers of profits to tax havens. With Germany and now France, we have asked the OECD to take that work forward and we will make it an important priority of our G8 presidency next year. In total, we expect the action that we are announcing today to increase the amount of money collected from tax evasion and avoidance by a further £2 billion a year.

Fair and necessary as that is, it is not enough by itself to close the deficit. We need to ask more from the better-off. Punitive tax rates do nothing to raise money, and simply discourage enterprise and investment into Britain. Other countries on our doorstep are trying that approach and paying the price. We are not making that mistake. HMRC data reveal that in the first year of the 50% tax rate, tax revenues from the rich fell by £7 billion and the number of people declaring incomes of over £1 million fell by a half. A tax raid on the rich that raises almost no money is a tax con. We are going to have a top rate of tax that supports enterprise and we are going to raise more money from the rich. Here is a simple fact: the richest will pay a greater share of income tax revenues in every single year of the coalition Government than in any one of the 13 years of the last Labour Government.

However, to make sure that the deficit reduction remains fair, we need to raise more. We have already raised stamp duty on multi-million pound homes and next week we will publish the legislation to stop the richest avoiding stamp duty. But we will not introduce a new tax on property. That would require the revaluation of hundreds of thousands of homes. In my view, it would be intrusive, it would be expensive to levy, it would raise little and the temptation for future Chancellors to bring ever more homes into its net would be irresistible, so we are not having a new homes tax.

In this Parliament, we have already reduced the amount of tax relief that we give to the very largest pension pots. From 2014-15, I will further reduce the lifetime allowance from £1.5 million to £1.25 million, and reduce the annual allowance from £50,000 to £40,000. That will reduce the cost of tax relief to the public purse by an extra £1 billion a year by 2016-17. Ninety-eight per cent. of the people currently approaching retirement have a pension pot worth less than £1.25 million. Indeed, the median pot for such people is just £55,000. Ninety-nine per cent. of pension savers make annual contributions to their pensions of less than £40,000. The average contribution to a pension is just £6,000 a year.

I know that these tax measures will not be welcomed by all—ways to reduce the deficit never are—but we must demonstrate that we are all in this together. When looking for savings, I think that it is fair to look at the tax relief that we give to the top 1%.

I want to help the great majority of savers. That is why we are introducing a generous new single-tier pension, so that people know it always pays to save. That is why I will uprate next April the overall individual savings account limit to £11,520. We will also consult on allowing investments in equity markets for small and medium-sized enterprises, such as the alternative investment market, to be held directly in stocks and shares ISAs to encourage investment in growing businesses.

I have also listened to the concerns from pensioners about draw-down limits. I am today announcing that the Government will raise the capped draw-down limit from 100% to 120%, giving pensioners with such arrangements the option of increasing their incomes.

It is also fair to look at the way in which we uprate benefits and some tax thresholds. The basic state pension has this year gone up by the largest cash amount in its history. Next year, thanks to our triple lock, I confirm that it will rise by 2.5%, which is higher than either earnings or inflation. That takes the level of the full basic state pension to £110.15 a week.

When it comes to working-age welfare, we have already made substantial reforms. We have cut £18 billion a year from the welfare bill. Benefits are being capped for the first time, so families out of work will not get more than the average family gets for being in work. We have increased efforts to fight welfare fraud. Today, we announce further measures and checks to save more than £1 billion in the next four years by reducing fraud, error and debt in the tax credit system. Next year, my right hon. Friend the Secretary of State for Work and Pensions will introduce the new universal credit so that it always pays to work. Today, we are setting the key parameters, such as the levels of earning disregards.

We have to acknowledge that over the last five years, those on out-of-work benefits have seen their incomes rise twice as fast as those in work. With pay restraint in businesses and Government, average earnings have risen by about 10% since 2007. Out-of-work benefits have gone up by about 20%. That is not fair to working people who pay the taxes that fund them. Those working in the public services, who have seen their basic pay frozen, will now see it rise by an average of 1%. A similar approach of a 1% rise should apply to those in receipt of benefits. That is fair and it will ensure that we have a welfare system that Britain can afford. We will support the vulnerable, so carers’ benefits and disability benefits, including disability elements of tax credits, will be increased in line with inflation, and we are extending the support for mortgage interest for two more years.

However, most working-age benefits, including jobseeker’s allowance, employment and support allowance and income support, will be uprated by 1% for the next three years. We will also uprate elements of child tax credit and working tax credit by 1% for the next three years, although previously planned freezes will go ahead. Local housing allowance rates, which are a central component of housing benefit, will be uprated in line with the existing policy next April and we will then cap increases at 1% in the two years after that. For that measure, 30% of the savings will be used to exempt from the new cap those areas with the highest rent increases. The earning disregards for universal credit will also be uprated by 1% for two years from April 2014. Child benefit is currently frozen. It, too, will now rise by 1% for two years from April 2014.

Let me be clear: uprating benefits at 1% means that people get more cash, but less than the rate of inflation. Taken together, we will save £3.7 billion in 2015-16 and deliver permanent savings each and every year from our country’s welfare bill. To bring all those decisions on many benefits over many years together, we will introduce primary legislation in Parliament in the welfare uprating Bill. I hope that it will command support from both sides of the House.

We will apply a similar approach to uprating some of our tax thresholds to that that we are applying to welfare. The higher rate threshold will be increased by 1% in the tax years 2014-15 and 2015-16. So the income at which people start paying the 40% rate will go up from £41,450 to £41,865 and then to £42,285. I want to be completely clear with people: this is an increase; in fact, it is the first cash increase in the higher rate threshold in this Parliament, but it is not an increase in line with inflation, so it will raise £1 billion of revenue by 2015-16. Again, there are no easy ways to reduce the deficit, but from year to year, no one will pay a penny more in income tax.

In the same way, the capital gains tax annual exempt amount will be increased by 1% over the same period, reaching £11,100. The inheritance tax nil-band rate, which has been frozen since 2009 at £325,000, will be increased by 1% in 2015-16 to £329,000. Taken with the welfare uprating decisions, that is a fair approach to paying off Britain’s debts.

However, dealing with those debts is only one part of making Britain fit to compete in the global race. Countries like ours risk being out-smarted, outworked and out-competed by the new emerging economies. We asked Michael Heseltine to report on how to make the Government work better for business and enterprise. I think that it is fair to say that his answer has captured the imagination of all political parties.

We will respond formally in the spring, but here is what we will do now. First, Government spending should be aligned with the priorities of the local business community. We will provide new money to support the local enterprise partnerships, and from April 2015, the Government will place more of the funding that currently goes to local transport, housing, skills and getting people back to work into a single pot that LEPs can bid for. Details will be set out in the spending review. Before then, we are putting more money into the regional growth fund, which is helping businesses create half a million new jobs.

Secondly, as Lord Heseltine also recommends, we will support industries and technologies where Britain has a clear advantage. With the support of my right hon. Friend the Business Secretary, we will extend our global lead in aerospace and support the supply chains of advanced manufacturing. We are also taking big steps today to support British companies that export to new emerging markets in Asia, Africa and the Americas. I am increasing the funding for UK Trade & Investment by more than 25% a year, so that it can help more firms build the capacity of overseas British chambers and maintain our country’s position as the No. 1 destination in Europe for foreign investment. We are also launching a new £1.5 billion export finance facility to support the purchase of British exports.

Thirdly, we are addressing credit problems for companies. We are creating a new business bank, and today we have confirmed that we are providing it with £1 billion of extra capital, which will lever in private lending to help small and medium-sized firms and bring together existing schemes.

Fourthly, we are going to cut business taxes still further. Let me explain how. The temporary doubling of the small business rate relief scheme helps more than half a million small firms, with 350,000 paying no rates at all. The previous Government were going to end it in September 2011; we have already extended it to next April, and, today, I extend it by a further year, to April 2014. We also confirm today the tax relief for our employee shareholder scheme.

The Energy Bill provides certainty and support for billions of pounds of investment in renewable energy. Today, we publish our gas strategy to ensure that we make the best use of lower-cost gas power, including new sources of gas under the land. We are consulting on new tax incentives for shale gas and announcing the creation of a single office so that regulation is safe but simple. We do not want British families and businesses to be left behind as gas prices tumble on the other side of the Atlantic.

We are going to help our construction industry, too. The previous Government abolished empty property relief, and, as excellent work done by my hon. Friends the Members for York Outer (Julian Sturdy) and for Wolverhampton South West (Paul Uppal) and others shows, that has blighted development in our towns and cities. The proposal from my colleagues that we create a long grace period before newly completed buildings have to pay empty property rates is sensible, and we will introduce it next October.

The previous Government also planned to increase the small companies tax rate to 22%. We have cut it to 20%. However, I would like to help small and medium-sized firms more, and I thank my hon. Friends the Members for Burnley (Gordon Birtwistle) and for Pendle (Andrew Stephenson) for their thoughts on that matter. Starting on 1 January, and for the next two years, I will increase tenfold the annual investment allowance in plant and machinery. Instead of £25,000-worth of investment being eligible for 100% relief, £250,000-worth of investment will now qualify. That capital allowance will cover the total annual investment undertaken by 99% of all the business in Britain. It is a huge boost to all those who run a business and who aspire to grow, expand and create jobs.

I want Britain to have the most competitive business tax regime of any major economy in the world. I have already cut the main core rate of corporation tax from 28% to 24%, and it is set to fall further to 22%. That has helped British companies and frankly left other countries scrambling to keep up. They will have to try harder, for I am today cutting the main corporation tax rate again by a further 1%. In America, the rate is 40%; in France, it is 33%; in Germany, it is 29%. From April 2014, the corporation tax rate in Britain will stand at 21%. That is the lowest rate of any major western economy. It is an advert for our country that says, “Come here; invest here; create jobs here; Britain is open for business.”

We will not pass the benefit of that reduced rate on to banks, and to ensure that we meet our revenue commitments, the bank levy rate will be increased to 0.130% next year. Making banks contribute more is part of our major reforms to the banking system.

We also have to be on the side of those who want to work hard and get on. I know how difficult many families have found the cost of living. In dealing with the deficit, we have had to save money. However, whenever we have been able to help, we have. We have helped councils freeze council tax for two years running, and we are helping them freeze it again next year. We have put a cap on rail fare rises for the next two years, so commuters are not punished for travelling to work. We are forcing energy companies to move families on to the lowest tariffs for their gas and electricity bills.

We have also helped motorists with the cost of petrol. We have cancelled the last Government’s escalator, and I am moving inflation-only rises to September. Fuel is 10p per litre cheaper than it would have been if we had stuck to Labour’s tax plans, and I want to keep it that way, as I know do my colleagues, like my hon. Friend the Member for Harlow (Robert Halfon). There is a 3p per litre rise planned for this January. Now, some have suggested that we delay it until April. I disagree. I suggest we cancel it altogether. There will be no 3p fuel tax rise this January. That is real help with the cost of living for families as they fill up their cars across the country, and it will help businesses, too. It means that, under this Government, we will have had no increase in petrol taxes for nearly two and a half years. In fact, they have been cut.

We have also helped working people by increasing the amount that they can earn before paying any income tax. When the coalition Government came to office, the personal tax allowance stood at just £6,475; next April, it is set to rise to £9,205.

Twenty-four million taxpayers have seen their income tax cut; 2 million of the lowest-paid have been taken out of tax altogether. Because of the difficult decisions we have taken today, we can go even further. From next April, the personal allowance will rise by a further £235. That means a total increase next year of £1,335—the highest cash increase ever. People will be able to earn £9,440 before paying any income tax at all. This is a direct boost to the incomes of people working hard to provide for their families. It is £47 extra in cash next year. In total, it is a £267 cash increase next year. People working full time on the minimum wage will have seen their income tax bill cut in half, and we are within touching distance of the £10,000 personal allowance. And at this time, I propose to extend the benefits of this further increase to higher rate taxpayers. That decision will stand alongside the decision I have had to take on uprating, meaning that, in real terms, a typical higher rate taxpayer will be better off next year and no worse off in total by the year after.

Today we have helped working people, but I do not want to distract from the tough economic situation we face in the world. The public know there are no miracle cures; just the hard work of dealing with our deficit and ensuring Britain wins the global race. That work is under way. The deficit is down. Borrowing is down. Jobs are being created. It is a hard road, but we are making progress, and in everything we do, we are helping those who want to work hard and get on.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

Today, after two and a half years, we can see, and people can feel in the country, the true scale of this Government’s economic failure. The economy this year is contracting. The Chancellor has confirmed that Government borrowing is revised up this year, next year and every year. The national deficit is not rising—[Interruption.] I will say it again. Our economy is contracting this year; Government borrowing and the deficit are revised up this year, next year and every year; and the national debt is rising, not falling. It is people who are already struggling to make ends meet, middle and lower-income families and pensioners, who are paying the price, while millionaires get a tax cut—a £3 billion welfare handout to the people who need it least.

Let me spell out the full facts to the House—[Interruption.] Government Members should listen. They might learn something. In June 2010, the Office for Budget Responsibility forecast that our economy would grow by 2.8% this year. In March this year, it said there would still be growth, but revised it down to just 0.8%. Today, we learn that the Chancellor has not managed even that. Growth has not only been downgraded yet again, but he has confirmed, following the double-dip recession, that our economy is now forecast to actually contract inside this year, by 0.1%.

Let me remind the House what the Chancellor promised over two years ago in the June Budget. He said:

“We have provided the foundations for economic recovery in all parts of our nation”.

He said:

“We have set the course for a balanced budget and falling national debt by the end of this Parliament.”

And he said:

“The richest paying the most and the”

most

“vulnerable protected”.—[Official Report, 22 June 2010; Vol. 512, c. 180.]

That was the promise, but far from the Chancellor securing our recovery, our economy has flatlined since the spending review in 2010. Over the past two years, he was expecting 4.6% growth, but he has actually achieved 0.6% growth, which compares with 1.7% in France, 3.6% in Germany and 4.1% in America. We are falling behind in the global race. We learn today that growth is being downgraded this year, next year, the year after, the year after, and the year after that too—the longest double-dip recession since the second world war now followed by the slowest recovery in the past 100 years.

The result of this stagnation—rising long-term unemployment and long-term damage to our economy, falling behind now as other countries move ahead—is that the Chancellor’s fiscal strategy has been completely derailed. The defining purpose of the Government, the cornerstone of the coalition, the one test they set themselves: to balance the books and get the debt falling by 2015, is now in tatters.

What we have learned today is that Government borrowing has been revised up this year, next year and the year after that. We now know that, compared with the Chancellor’s forecast two years ago, borrowing is now forecast to be well above the £150 billion of extra borrowing that he was forecasting in March—[Interruption.] Government Members should listen to this. The Chancellor has confirmed that the Prime Minister’s pledge to balance the books in 2015 is not met in 2015, it is not met in 2016 and it is not met in 2017. The fact is that there is more borrowing this year, next year and the year after.

The Opposition will look at the detail when we get the figures—it was disappointing that the Chancellor failed to give us the cash figures adjusted for borrowing this year, next year and the year after. The unusual thing is that, just a few weeks ago, the independent forecasters were saying that borrowing would be £6 billion higher this year. We will examine the detail of those figures to see whether there has been any dodgy dealing. We will find out in the coming hours. [Interruption.] I do not know because I have not seen the figures, but I do know that there is more borrowing this year, more borrowing next year and more borrowing the year after.

The result is that the OBR shows more borrowing and higher deficits means higher national debt. The national debt—[Interruption.] The Prime Minister should listen to this, even if it might be rather shocking to find out. National debt will be higher at the end of this Parliament than the level inherited; it will be higher at the end of this Parliament than forecast in the plans he inherited; and it is no longer falling as a percentage of GDP in 2015. It is rising in 2015 and rising again in 2016, breaking the fiscal rule for falling debt upon which the Chancellor said his entire credibility depended. In last year’s Budget, the Chancellor said,

“our deficit reduction plan is on course…we will not waiver”.—[Official Report, 21 March 2012; Vol. 542, c. 795.]

On course? Not waivering? He is not waivering, he is drowning.

The Chancellor is now trying to claim that his failure on growth, his failure on borrowing and the debt, and breaking his own fiscal rule, are not his fault—that no one could have foreseen it. What nonsense; he was warned. He was warned that a tough medium-term plan to cut the deficit, tax rises, spending cuts and pay restraint, which every country had to put in place, could work only if the Government first put in place a plan for jobs and growth. He was warned that it was a huge gamble to go too far, too fast, and to rely on exports to bail him out. He was warned that there was a hurricane brewing in the eurozone, and that it was not the time to rip out the foundations of the house here in Britain. Once again, the Chancellor is trying to blame high oil prices and the eurozone crisis for negative growth this year, but they affected all countries, so why, over the last—[Interruption.]

[Mr Speaker]

Order. I apologise for interrupting. Members must calm themselves. Mr Byles, I thought you were normally a model of restraint and civility. Good heavens man! I do not know what has come over you. Calm yourself—take a pill if necessary, but keep calm. Take up yoga.

[Ed Balls]

Growth down, borrowing up, debt up—they don’t like it, Mr Speaker, do they? They don’t like it at all.

Once again, the Chancellor is trying to blame high oil prices and the eurozone crisis, so let me ask him: why, over the past two years, has Britain grown at just one tenth of the average growth rate of the G20 countries? Why has growth here in Britain been even slower than in the eurozone? It is not the rest of the world’s fault—it is his policies that have failed. He claimed that rising VAT alongside accelerated spending cuts would boost confidence, secure recovery and get the deficit down, but they depressed confidence, choked off our recovery and borrowing has been revised up. Let me ask the Chancellor: whatever happened to his Treasury view—his theory of expansionary fiscal contraction? Expansionary fiscal contraction? It is the economy that has contracted and the borrowing and the debt that have expanded. That is the truth.

When the latest figures show business confidence falling, when the world economy is slowing, when the eurozone is in such chronic difficulty, and when on current plans the Chancellor’s fiscal straitjacket tightens further next year, it is simply reckless and deeply irresponsible of this Chancellor to plough on with a fiscal plan that we all know is failing on the terms he set. That is the truth.

What a wasted opportunity this statement was. Can the Chancellor confirm that the independent OBR looked at the measures he has announced today, and that its verdict is that growth is revised down this year, next year and the year after?

Let me congratulate the Chancellor on taking our advice and stopping January’s fuel duty rise, even though Government Members all voted against it just a month ago. We welcome the U-turns on flood defences, in part, on regional pay bargaining in the NHS, and on capital allowances. After churches, charities, pasties, skips, fuel and caravans, I think this U-turning is catching on, but whatever happened to the plans for the business investment bank? As for yesterday’s announcement on infrastructure spending, the extra money for schools is just a fraction of the cut from the cancellation of Building Schools for the Future.

We have been here before. A year ago, the Prime Minister boasted of a national infrastructure plan; 12 months on, not a single road scheme has even started. Why cannot he see that he will not get the deficit down without a plan for jobs and growth? Why is he not using the 4G money to get 100,000 new homes built? Why is he not offering a national insurance holiday for small firms? Why not have a temporary tax cut for families? Even the Mayor supports that. Why is the Chancellor not repeating the bank bonus tax? The Chancellor says he cannot do any of that because it would lead to higher borrowing. Even his political attacks are backfiring, because this Chancellor’s failed plan has given us more welfare spending, higher borrowing and higher debt too. That is the reality. The truth is that the Chancellor has failed on growth and the deficit, but what is his answer? More of the same.

Let me remind the Chancellor what he told the House in the Budget of 2011. He said that

“we have already asked the British people for what is needed, and…we do not need to ask for more.”—[Official Report, 23 March 2011; Vol. 525, c. 951.]

But 18 months on the Chancellor has come back for more, and who does he think should pay? Not the 8,000 millionaires set to get more than £100,000 each in April. I have to ask the Liberal Democrats: whatever happened to the mansion tax? Do they not realise that, even with the changes in the personal allowance, as a result of the other things they have supported the average family with children on £20,000 is worse off—and that is before the VAT rise?

The Chancellor claims that his decision to restrict pension tax relief will make the tax system fairer at the top. Can he confirm that the £1 billion he is raising is less than the £1.6 billion that he gave back in pension tax relief in June 2010? And it is just a fraction of the top-rate tax cut—a £3 billion top-rate tax cut at the same time as the Chancellor is cutting tax credits for working families, cutting child benefit for middle-income families, raising taxes on pensioners in April and cutting benefits for the unemployed.

We do need to reform and modernise our welfare state and reduce its cost. Those who can work should work—no ifs or buts. We support a benefit cap, done fairly, with a higher level in London, but let us be clear. The Chancellor claimed he would cut the welfare bill, but higher inflation and long-term unemployment mean that the benefits bill is forecast to be billions higher in this Parliament than he boasted. Let me help him: welfare to work—the clue is in the name. We cannot have a successful welfare to work programme without work, and we know that the Work programme has totally failed, with only two people in 100 going into permanent jobs.

We should require every young and long-term unemployed person to take a job—and make sure there is one there. Let me ask the Chancellor about a nurse, one of the thousands cut from the NHS in the past two years, who is now struggling to find a new job. For that nurse, he has announced today that he is cutting her jobseeker’s allowance for the next three years. How can that be fair when he is cutting the top rate of tax? How can it be fair when someone earning £228,000 a year will get a top-rate tax cut of £75 a week in April, which is more than the £71 the nurse gets to live on through JSA?

We learned today that the Chancellor is not just hitting those looking for work. The majority of people who lose from his cuts to tax credits are people in work—millions of families striving hard to do the right thing. What kind of Government believe that you can only make low-paid working people work harder by cutting their tax credits, but you only make millionaires work harder by cutting their taxes, Mr Speaker? I tell you: certainly not a one nation Government.

The Government must really believe that if taxes are cut at the top the wealth will trickle down. Let me remind the House what the Chancellor told the Conservative party conference in October 2009. He said that

“we could not even think of abolishing the 50p rate on the rich while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs.”

Those were the Chancellor’s words. He continued:

“I think we can all agree that would be grossly unfair.”

What has changed? Nothing has changed. It was all a con and the mask has slipped. We now know that this Chancellor cannot say, “We’re all in this together” without a smirk on his face. They wanted us to think they were compassionate Conservatives. Now we find out that they are the same old Conservatives, and the Liberal Democrats have gone along with all of it yet again.

What a pity it is not to see the hon. Member for Mid Bedfordshire (Nadine Dorries) in her place, back from the jungle. She may not have succeeded in talking for the nation on many things but she did speak for the nation when she called the Prime Minister and the Chancellor

“two arrogant posh boys who don’t know the price of milk.”

It is no wonder the Prime Minister keeps losing his temper, because his worst nightmare is coming true—not snakes and spiders in the jungle, but the Government’s fiscal rule broken, their economic credibility in tatters, exposed as incompetent and unfair. Yes, he’s the Chancellor; can’t someone get him out of here? Growth down, borrowing revised up and the fiscal rules broken: on every target they have set themselves, they are failing, failing, failing. They are cutting the NHS, not the deficit; they are borrowing more than £212 billion more than they promised two years ago; and they are cutting taxes for the rich, while struggling families and pensioners pay the price—unfair, incompetent and completely out of touch.

--- Later in debate ---

[Several hon. Members]

rose—

[Mr Speaker]

Order. The statement covers matters that are already the subject of much public interest and comment, so I am keen to accommodate as many colleagues as possible. If I am to do so within any reasonable time frame, however, some pithiness from Back and Front Benches alike is required, and I am sure we will be led in our mission by Mr Andrew Bridgen.

--- Later in debate ---

[Mr Osborne]

As I said in my statement, the report produced by my hon. Friend and some of his colleagues showed powerfully the impact that the empty property rates that the previous Government introduced have had, hitting development in our towns and cities. It is an expensive measure to get rid of, which is why we have been unable to get rid of it all today, but we have listened to him and his colleagues. There was the idea of providing a grace period for new commercial development, and we are now introducing that 18-month grace period. I congratulate him on making the case for it so powerfully.

[Mr Speaker]

I call Mr Dan Byles.

[Dan Byles (North Warwickshire) (Con)]

Thank you, Mr Speaker—I am now in a calm frame of mind.

The average working wage in my constituency of North Warwickshire and Bedworth is less than the national average wage. What does the Chancellor suggest I tell my constituents when they ask me, in bewilderment, how the Labour party can vote against a welfare cap that will prevent people on benefits from taking home a larger disposable income than my constituents who are in work?

[Mr Osborne]

I think that my hon. Friend’s constituents and many people in the country will be completely bewildered that Labour opposes a cap on benefits that simply means that people who are out of work will not get more than the average family get from being in work. It means that in two and a half years’ time or thereabouts, his constituents will have a choice between continuing to return my hon. Friend to Parliament to ensure that their money is well spent and the unlimited benefits that his Labour opponent will be offering.

[Mr Speaker]

I thank the Chancellor and all 90 Back Benchers who questioned him. We are blessed.

Public Service Pensions Bill

John Bercow Excerpts

Tuesday 4th December 2012 Commons Chamber

Consideration of Bill, as amended in Public Bill Committee

[Mr Speaker]

Before I call the Opposition Front Bencher to move new clause 2, I should tell the House that I have revised my provisional selection of amendments and moved amendments 29 to 31 and amendment 33, tabled by Dr Eilidh Whiteford, to the third group from the first group. A revised list will be circulated shortly. I hope that that information is helpful, not only to the hon. Lady, but, indeed, to the House.

New Clause 2

Member communications

‘(1) Scheme regulations for a scheme under section 1 shall provide for the provision of annual benefit statements to all members of the scheme.

(2) Benefit statements under subsection 1 shall show the following information—

(a) the member’s pension benefits earned to date;

(b) the projected annual pension and lump sum payments if the member retires at his normal pension age; and

(c) the member’s and employer’s current contribution rates.’.—(Chris Leslie.)

Brought up, and read the First time.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to discuss the following:

New clause 3—Fair deal—

‘A member of a public service pension scheme is entitled to remain an active member of that scheme following—

(a) the compulsory transfer of his contract of employment to an independent contractor; and

(b) any subsequent compulsory transfer of his contract of employment.’.

Amendment 11, in clause 3, page 2, line 25, at end insert—

‘(5A) This Act shall not apply to scheme regulations relating to local government workers in Scotland unless the Scottish Parliament approves its application.’.

Amendment 12, in clause 7, page 4, line 29, at end insert—

‘(3A) A scheme under section 1 which replaces a final salary scheme may only be established as a career average revalued earnings scheme or a defined benefits scheme of such other description as Treasury regulations may specify.’.

Amendment 4, in clause 12, page 8, line 9, after ‘scheme manager’, insert ‘and employee representatives’.

Amendment 19, in clause 16, page 9, line 36, leave out subsection (1) and insert—

‘(1) New scheme regulations made under section 1 and 3 shall replace existing schemes’ current regulations and shall take effect on the amendment date.

(1A) Following the implementation of new scheme regulations under subsection (1), benefits shall only be provided in accordance with those new regulations.’.

Amendment 20,  page 10, line 5, leave out ‘closing’ and insert ‘amendment’.

Amendment 21,  page 10, line 6, leave out ‘1 April’ and insert ‘2 April’.

Amendment 32,  page 10, line 7, after ‘scheme,’, insert—

‘(aa) 1 April 2016 for a Scottish scheme,’.

Amendment 22,  page 10, line 8, leave out ‘5 April’ and insert ‘6 April’.

Amendment 23,  page 10, line 10, leave out ‘(1)’ and insert ‘(1A)’.

Amendment 24,  page 10, line 21, leave out ‘(1)’ and insert ‘(1A)’.

Amendment 25,  page 10, line 23, leave out ‘closing’ and insert ‘amendment’.

Amendment 26, page 10, line 27, at end insert ‘regulations’.

Amendment 27,  page 10, line 28, leave out ‘(1)’ and insert ‘(1A)’.

Amendment 28,  page 10, line 28, leave out from ‘benefits’ to ‘includes’.

Government amendment 35.

Amendment 7, in clause 28, page 15, line 12, leave out ‘may’ and insert ‘must’.

Amendment 8,  page 15, line 12, after ‘new’, insert ‘defined benefit’.

Government amendments 36 to 39.

[Chris Leslie]

Having spent a considerable number of weeks serving on the Bill Committee, I am pleased that we now have the opportunity to press the Government on questions that remain unanswered and largely unaddressed. Considerable changes are being made to many of the public service pension schemes as a result of Lord Hutton’s report on the future shape of those schemes. The report was largely welcomed throughout the House and that has contributed greatly to the improvement of the reforms. However, a number of the report’s aspects have not been adopted in full by the Government in this Bill, and we are concerned about that.

New clause 2, the first in a considerable group of suggested changes specifically to pension schemes, would implement recommendation 18 on page 132 of the Hutton report that

“public service pension schemes should issue regular benefit statements to active scheme members, at least annually and without being requested”.

At present, defined benefit public service schemes are obliged to provide such information only if they are requested to do so. That limited obligation is set out in the Occupational Pension Schemes (Disclosure of Information) Regulations 1996, but normal occupational pension schemes that do not have an arrangement for either a final salary or career average payment at the end of the scheme are obviously a different state of affairs from defined contribution schemes. New clause 2 would simply implement Lord Hutton’s recommendation and ensure that public service workers have a better understanding of the benefits that they have accumulated to date and what they stand to receive if they continue working until their normal retirement age.

We had a very healthy debate on this matter in Committee, where the exchange of views did not follow the usual to-ing and fro-ing of partisan speechmaking. A number of Members agreed that it would be very healthy if we improved the information and transparency for employees to enable them to make more informed decisions in planning for their savings and their financial future. For example, members of the schemes would be better able to judge whether they were saving enough for their retirement. The new clause is therefore compatible with the aim of reducing people’s need for state benefits in retirement—something that many Members across the House want to achieve.

When we tabled a similar amendment in Committee, it gained quite a degree of vocal support. The hon. Members for Bedford (Richard Fuller) and for Finchley and Golders Green (Mike Freer), who are in the Chamber today, helpfully pressed the Minister to resist his usual logic, which says in big block capital letters, “This is an Opposition amendment; thou shalt resist this devious device by Labour Members to do something nasty in the legislation.” That was not our intention. We actually wanted to implement Lord Hutton’s recommendation and bring defined benefit schemes into the modern age, especially in respect of communicating more regularly and effectively with scheme members. I live in hope that those hon. Gentlemen will chip in and offer their support again, because surely the goal of improving people’s understanding of their pension and helping them to plan more effectively for their retirement should find favour on both sides of the House.

--- Later in debate ---

[John Healey]

My hon. Friend is making an important argument in response to the intervention by my hon. Friend the Member for Hayes and Harlington (John McDonnell). It is not just that the Bill includes certain things that advantage employers; the measures are principally to the advantage of the Treasury, which is given the whip hand and ultimate say over schemes that should be run by their members and managers accountable to them.

My hon. Friend quoted the Economic Secretary in Committee. When the Minister rises to his feet, is it not important that he explain the discrepancy between what he said in Committee and what the Chief Secretary to the Treasury said to this House in December last year? He said:

“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.”—[Official Report, 20 December 2011; Vol. 537, c. 1203.]

There is a big difference between those two statements and the Economic Secretary needs to explain himself on that point.

[Mr Speaker]

Order. Before the hon. Member for Nottingham East (Chris Leslie) replies, let me say that although I have indulged the right hon. Member for Wentworth and Dearne (John Healey) on this occasion I hope he will not repeat such a long intervention. I do not want him to induce the hon. Member for Corby (Andy Sawford) into following bad habits. That would be a very undesirable state of affairs.

[Chris Leslie]

It may be a bad habit but it was a jolly good intervention. I do not often do this, but I commend my right hon. Friend for quoting the Chief Secretary to the Treasury. What is the difference between the Chief Secretary and the Economic Secretary? Well, one is a Liberal Democrat and the other a Conservative. However, my right hon. Friend should take that with a pinch of salt, as I too have a quote from the Chief Secretary, who said that

“establishing a relationship of trust and confidence between the Government and public service workers is critical to the success of these reforms.”

How long will this coalition Government persist? What we need is not just a commitment from a Liberal Democrat Chief Secretary to the Treasury whose parliamentary and ministerial career might not endure. We need to know what would happen should there be the dreadful set of circumstances of a Conservative majority Administration. Would a promise on the new fair deal, given only verbally by Ministers, endure in such circumstances?

Given the Minister’s trajectory and career momentum, I want to hear a commitment from him to the new fair deal on behalf of the Conservative party. That might mean something, although I would still prefer to see it in the Bill. It would be invidious for the Government to speak against new clause 3, let alone vote against it if we decided to test the opinion of the House. I am conscious of the time so I will move on.

Amendment 11 relates to issues of local government workers in Scotland and would exclude the Scottish local government pension scheme from the Bill, unless agreed to by the Scottish Parliament. Primary legislation on public service pension schemes has always been reserved to the UK Parliament. Scottish Ministers have had responsibility for regulations for public service schemes but those have been subject to Treasury approval and have tended to mirror arrangements for England and Wales. The exception is the Scottish local government pension scheme, which is a funded scheme that has not been subject to Treasury approval in the past. The Bill extends certain prescriptions to the design of the Scottish local government pension scheme that, in practice, have previously been left to Scottish Ministers to negotiate and decide—most importantly, they negotiated and decided on normal pension age; that benefits should be based on career-average revalued earnings and not final salary; on the cost cap, as it is known; and on rules for governance and fund valuations.

--- Later in debate ---

[Chris Leslie]

I beg to move amendment 13, page 5, line 21, after ‘age’, insert ‘or deferred pension age’.

[Mr Speaker]

With this it will be convenient to discuss the following:

Amendment 29, page 5, line 21,after ‘section 1’, insert

‘(other than a Scottish scheme)’.

Amendment 2, page 5, leave out lines 22 and 23 and insert

‘65, or current pension scheme age if lower’.

Amendment 1, page 5, line 27, at end insert—

‘(d) prison officers and psychiatric nurses.’.

Amendment 14, page 5, line 28, after ‘age’, insert ‘or deferred pension age’.

Amendment 30, page 5, line 28, after ‘section 1’, insert

‘(other than a Scottish scheme)’.

Amendment 9, page 5, line 28, leave out ‘must be 60’ and insert ‘shall be set out in scheme regulations but must be no more than 60’.

Amendment 16, page 5, line 29, at end insert—

‘(2A) Subsections (1) and (2) shall not apply in relation to any category of public service worker as the Secretary of State may by order specify following the publication of a scheme specific capability review.’.

Amendment 15, page 5, line 30, leave out subsection (3).

Amendment 31, page 5, line 30, after ‘section 1’, insert

‘(other than a Scottish scheme)’.

Amendment 33, in clause 33, page 19, line 25, clause 33, at end insert—

‘“Scottish scheme” means a scheme for the payment of pensions to persons specified in paragraphs (c) to (g) of section 1(2) in respect of service in Scotland;’.