Contribution
I appreciate the chance to speak in this debate, especially without time limits—it is lovely. I absolutely love a very technical debate in the Chamber, but unfortunately not enough Members do. It would have been nice to see huge numbers delighted to talk about the technical aspects of legislation, but being a veteran of previous Finance Bills, I am aware that there is not often a huge turnout for these debates.
I am thankful for—but have a few criticisms of—the Government’s position throughout the Bill. I will start with a couple of issues around timing. It is appreciated that the changes are being made. The hon. Member for Edinburgh South West (Dr Arthur) mentioned the Budget debates, and I mentioned in my speech then how delighted I was that the change had been made, and how great it was that pre-1997 indexation would be taking place.
However, when I made my speech last Thursday, we had not yet seen the Government amendments. I was aware that there would be Government amendments, because it had been announced, but we did not have the opportunity to properly scrutinise them, or to consider whether those amendments should be amended, because of the timeline of when the details were provided. I appreciate that the Minister tabled the amendments in advance of the deadline, which is great, but there are questions that I potentially would have asked, and I may have tabled some probing amendments, if I had seen those Government amendments in advance.
On the 1997 indexation, I apologise that on Thursday, when I was talking about this, I mentioned the FSA instead of the FAS—I apologise to the Food Standards Agency; I did not mean anything by it. If I do that again, I apologise. In terms of the PPF and the FAS, the PPF got in touch with me last week, and I had a good meeting with it about what the indexation will look like and how many members would potentially be impacted. It suggested that it was getting in touch with 165,000 members, which I thought was a very significant number, with an impressively fast turnaround in the time it was looking to reach out to them. Those are significant numbers, and I appreciate that.
However, I am concerned that the uplift does not involve a one-off payment in order to bring the pre-1997 contributions up to some sort of level. The contributions were made pre-1997, so the compound interest on that would be unbelievable—it would be very significant. If there is no one-off payment to be made, and no recognition of the fact that the indexation has not taken place, then we are looking at adding 2.5% a year on to a tenner—or whatever—instead of 2.5% every year up until now, which would be a significantly different sum.
I appreciate that the change has been made, and I also appreciate that the PPF levy is still going to have the potential to reduce to zero. The PPF’s plans are still intended to go ahead, and it is still able to meet its financial obligations, even with the changes that have been proposed by the Government. However, I would appreciate it if the Government considered the possibility of a small one-off addition to the pre-1997 accrual that members have, in order to bring them closer to what the pension should have been if they had had that indexation previously.
Older pensioners are the group affected, some of whom are very unwell. As was mentioned by the Chair of the Work and Pensions Committee, the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), a number of them are no longer with us. The Chair also mentioned Terry Monk, who has been in regular contact with me via email, and I thank him and all of the members who have fought so hard for this change. They have achieved something, although I expect they will probably go on fighting for more. I can understand that and I will be happy to back them in the search for more justice.
On some of the other issues that have been brought up in this debate, around the fiduciary duties, the right hon. Member for Birmingham Hodge Hill and Solihull North (Liam Byrne) and I probably have a similar idea of what “best interests” looks like, what the words “best interests” mean, and what the interests of scheme members are. Some of the ideas that he was talking about around investments are ideas that I would fully align with.
However, we can all define best interests in different ways. The shadow spokesperson, the hon. Member for North West Norfolk (James Wild), talked about the fact that fiduciary duties mean having to get the best returns—he said something like that—but it is not the best returns, but the best interests. Some people may define best interests as best returns, but some people may not. Some might define best interests as better transport systems for the majority of the scheme beneficiaries who live in a certain area, for example; if there were a more efficient transport system, more housing and better schools and hospitals, that would significantly benefit those members in that area.