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  • David Willetts – 2002 Speech on the Pickering Review

    David Willetts – 2002 Speech on the Pickering Review

    The speech made by David Willetts, the then Shadow Secretary of State for Work and Pensions, in the House of Commons on 4 July 2002.

    I declare my interests that appear in the Register of Members’ Interests and thank the Secretary of State for an advance copy of this very important report.

    Let me make it clear that we welcome the report, just as we welcomed Alan Pickering’s review when it was established. I join the Secretary of State in expressing our respect for the expertise and wisdom that Alan Pickering brought to the exercise. He has produced a valuable report.
    Conservative Members respond to the Secretary of State’s comments by saying that we understand that the regulatory regime for pensions must be stable to ensure long-term planning, and we will contribute constructively to the debate about the best ways of cutting the burden of regulations on pension funds. That is an obligation on all hon. Members on both sides of the House.

    The starting point of the debate has to be a frank recognition of the scale of the problem that faces funded pensions. For years, Ministers have been shockingly complacent, saying that everything was all right when it clearly was not, and citing statistics that they have since admitted were seriously misleading. The Secretary of State should accept the stark warning in Alan Pickering’s report that

    “without change, the current trajectory suggests less private pension provision in the future.”

    That warning lies at the heart of his report.

    We shall obviously want to study the proposals in the Pickering report very carefully, but I can tell the Secretary of State that we welcome the themes that are expounded in it. For example, we support the call for a proportionate regulatory environment, and we welcome Alan Pickering’s vivid expression that a pension is a pension is a pension. There are too many different forms of pension, and it is right to try to simplify them. It is also true that too much pension provision has become a form of archaeology, with pension providers delving deep into the past to identify the date on which a pension was first set up in order to understand the tax and regulatory regime around it. That needs to be tackled

    Can I press the Secretary of State for more information about the timetable to which he is working? The recommendations will be pointless unless the Government act quickly. As Alan Pickering said in his report

    “Time is not on our side.”

    Yet the Secretary of State offered us a second Green Paper on pensions. I have here the Government’s previous pensions Green Paper, which was published nearly four years ago. That contained the Prime Minister’s promise that his Government would increase the proportion of pensioners’ incomes that comes from private savings from 40 to 60 per cent. Since then, the Government have made no progress whatsoever towards achieving that objective. Instead, they introduced stakeholder pensions that were supposed to go to the 5 million people in their target group, although they reached only about 100,000, and scheme after scheme has closed. Why should the second Green Paper make any progress, given the comprehensive failure of the first?

    If we do not get legislation until 2004, as has been suggested, the changes will not be implemented until 2005 at the earliest. Yet, if pension scheme closures carry on at their current rate, there will not be any pension schemes open to new members by the time that the Government finally get round to implementing the proposals in Alan Pickering’s report. Will the Secretary of State take this opportunity to inform the House of the likely timetable of any legislation to implement proposals for reform?

    May I also press the Secretary of State for more information about the burden of regulation, which is still increasing? Since the Pickering review was established in September 2001, we have had 251 pages of new regulations. We are still waiting for the final results of the Myners review. It is good to see a Treasury Minister on the Front Bench because the Treasury, in its commitment to implementing Myners, has been threatening pension schemes with yet more regulation. There is a useful warning in Mr. Pickering’s report: he hopes that the people taking forward Myners—he might be thinking of the Financial Secretary—will

    “keep in mind our arguments for simplification.”

    Can we have an assurance from the Secretary of State, as the minimum to show his good will on this exercise, that more regulation will not be imposed on pension schemes while we wait for his supposedly deregulatory legislation? Without such an assurance, it will be difficult to take the Government’s commitment to deregulation seriously.

    The terms of reference for Alan Pickering’s report were very narrow and excluded some of the main factors that have been driving the crisis in funded pension provision. Why was Alan Pickering unable to comment on the structure of state pensions, including the state second pension, which left-wing think tanks such as the IPPR are now saying should be abolished before it has even begun?

    What about the burden of ever more means-testing of pensioners? Why could not Pickering comment on the spread of means-testing, which will soon result in more than 50 per cent. of all pensioners finding themselves on a means test? If so many pensioners are to face means tests, which will mean that they are not fully rewarded for their saving, does the Secretary of State recognise the serious danger that the main beneficiaries of the review could be the richer half of the population? They will not be trapped by the means test that he is imposing on the less affluent 50 per cent. of pensioners.

    What about the financial burdens that the Government have placed on pension funds which are their direct responsibility? What about the £5 billion a year tax on pension funds, and the £1.5 billion a year cost of the insufficient value for the contracted-out rebate? Does the Secretary of State recognise that that adds up to £6.5 billion a year being taken from our pension funds? That is the real reason why our pension funds are closing, and nothing that he said today showed any willingness to recognise the scale of that problem and what needs to be done to tackle it.

  • Andrew Smith – 2002 Statement on the Pickering Review

    Andrew Smith – 2002 Statement on the Pickering Review

    The statement made by Andrew Smith, the Secretary of State for Work and Pensions, in the House of Commons on 4 July 2002.

    With permission, Mr. Speaker, I should like to make a statement on the Pickering report that was published this morning.

    The report is the culmination of nine months of hard work by Alan Pickering and his team. I should like to thank him and also everyone who took the time and effort to submit their views—some of whom are here today.

    In his report, Alan Pickering acknowledges the encouragement that he received not only from my right hon. Friends the Secretary of State for Transport and the Minister for Pensions, but also from the right hon. Member for Hitchin and Harpenden (Mr. Lilley) and the hon. Members for Havant (Mr. Willetts) and for Northavon (Mr. Webb).

    Pensions simplification has to be at the heart of any strategy to encourage greater pension provision. We need to deal with the complexities built up over the years by successive Governments.

    Alan’s report makes 52 recommendations. The key ones include: a new pensions Act to consolidate all existing pensions legislation; a new more proactive regulator; a better, more targeted approach for communicating with pension scheme members; more flexibility to modify schemes; allowing employers to make membership of their occupational pension scheme a condition of employment; and the ending of compulsory indexation for defined benefit pensions, and compulsory survivors benefits.

    The report, together with Ron Sandler’s proposals, announced by my hon. Friend the Financial Secretary on Tuesday, represents the first stage of a comprehensive review of occupational and personal pension provision.

    The Government will take a radical look at the issues, together with the results of the Inland Revenue review of tax simplification, when that is completed. In the autumn we will come forward with our proposals in a Green Paper.

    That will initiate a wide-ranging consultation. It will look at private pensions policy in the round, including the opportunities open to people around retirement, and will set out the Government’s proposals to enable people to build up more pension savings.

    Alan Pickering’s report covers complex issues and includes some tough choices—the inevitable dilemmas faced by all simplifiers. The report presents challenges to us all: employees and their unions, employers and commercial pension providers, the Government and the Opposition. I believe that we will need to be guided by the following principles and objectives, grounded in a long-term approach: fairness; security in retirement; informed choice for consumers; simple and proportionate regulation; ensuring that incentives are effective and well understood; promoting employment among older workers; and flexibility to give individuals more choice about the pace at which they retire from the labour market. I hope that we can secure all-party agreement on those matters.

    The Government believe that pension provision should be based on partnership, which can secure lasting buy-in from all key players. We must strike the right balances between sometimes competing goals. We want the simplicity that enables people to make informed choices without stifling product innovation and competition. We want a proportionate regulatory framework that provides sufficient security for savers while making it worth while for employers and commercial providers to make available good pension products. We need to ensure that we remove unnecessary barriers to employer provision and employer contributions. We also need to make it easier for people to save and make it easier to sell pension products, as Ron Sandler’s report proposed on Tuesday. We need to achieve all that and more against the remorseless arithmetic that tells us that, because we are living longer and want to maintain a good standard of living in retirement, we need to save more or work longer, or a combination of both.

    We wanted Alan Pickering to present a strong challenge to the degree of regulation around private pensions. He has done that—he has made some valuable proposals for simplifying pensions legislation and reducing administrative burdens on both schemes and employers, cutting costs and simplifying choices for individuals. His recommendations also present some tough choices. Take, for example, his recommendation that employers should have the choice to make joining a company pension a condition of employment. Some 16 per cent. of people who could benefit from a company pension scheme currently choose not to do so. Compelling people to join would restrict their choice, but against that consideration, we need to balance the beneficial effects for schemes and the overall effect on extending pension coverage.

    Alan has also made a number of specific recommendations on easements of legislation—in particular, repeal of section 67 of the Pensions Act 1995. Again, that throws up a tough choice. The recommendation would mean that, if employers faced funding constraints on their scheme, they could have an option to reduce future funding costs rather than close the scheme. Of course, that would remove an absolute guarantee against the consequences of change, but might well secure a better outcome for members and the future of the scheme, set against the alternative of its closure.

    Alan also recommends an end to compulsory indexation of pensions and removal of compulsory survivors’ benefits as a condition of contracting out. On first reading, those proposals are not attractive. They go against the drive of the past 30 years to price protect pensions and to enhance survivors’ benefits, but again, in the light of the report, we will need to look carefully at all the consequences.

    As well as the big themes and recommendations to which I have referred, a number of more modest issues are addressed to my Department and others. For example, they include improving the way in which contracting out is administered; streamlining procedures and reducing general administrative burdens; looking at ways better to provide advice through the workplace; and improving information going to pension scheme members. Those recommendations have considerable merit, and subject to the responses that we receive to the report, I intend to take them forward.

    In conclusion, I believe that Alan Pickering’s report offers clear options for simplification and makes a valuable contribution to the debate that we need to have on the next stage of pension reform. We need to face up to the tough choices that he sets out. In seeking to simplify the future we must also face up to the—in many ways harder—challenge of simplifying the past, in that we need to simplify the different regulations that have built up over the years. Otherwise, we will end up adding yet another layer to the existing layer cake of regulation and complexity.

    Alan Pickering’s proposals are radical, ambitious and pragmatic. I urge hon. Members, the public, employers, trade unions and pension providers—all those whose partnership is essential for effective pension reform—to give them full and constructive consideration. The Government certainly will. The acid tests for the Green Paper must be increasing the level of savings for retirement and making a secure occupational pension accessible to as many people as possible.

  • Oliver Letwin – 2002 Speech on Entitlement Cards and Identity Fraud

    Oliver Letwin – 2002 Speech on Entitlement Cards and Identity Fraud

    The speech made by Oliver Letwin, the then Shadow Home Secretary, in the House of Commons on 3 July 2022.

    I am grateful to the Home Secretary for his statement and for his courtesy in letting me have an early copy.

    If the Home Secretary is asking the country to debate a strictly defined benefit entitlement card, the purpose of which is to prevent fraud, the Conservative party will strongly welcome it. Indeed, my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) proposed it when he was Secretary of State for Social Security. He began to implement the mechanism for such a card because he was hugely determined to cut fraud. Ironically, the current Government aborted that implementation.

    However, is the item about which the Home Secretary seeks to consult a strictly defined benefit entitlement card? I confess that, having read through the paper and listened to his statement, I am still not clear.

    In the first paragraph of the consultative paper, the Home Secretary states:

    “A universal entitlement card scheme would…establish for official purposes a person’s identity so that there is one definitive record of an identity which all Government departments can use if they wish”.

    What, if anything, does that opaque and gnomic sentence mean? What does the Home Secretary mean when he suggests that the card is one,

    “which all Government departments can use if they wish”?

    Does the Home Secretary recognise the real and widespread scepticism and anxiety engendered by such utterances when they come from a Government and a Department, which, under his stewardship and in the past few months have sought to introduce vast new powers for Departments of State and other public agencies to interrogate aspects of people’s lives? Those proposals have been withdrawn only under a hail of parliamentary and public protest.

    Does the Home Secretary realise that these opaque utterances are bound to be read in a certain way by a public who have come to understand that the language of liberty is usually far from his lips, and to understand also his intense suspicion of the judiciary and judicial processes? Does he realise that such opaque statements are bound to be worrying when they come from a Government who, in discussing the double jeopardy rule, and advancing the European arrest warrant, have paid scant attention to the significance that most of us in the House still attach to the presumption of innocence in English law?

    If these are unreal fears, why is the Home Office in the lead on this matter? Why is a benefit entitlement card the proper pre-occupation of a Department that is not responsible for administering the benefit system? How will an entitlement card that is genuinely an entitlement card improve the criminal justice system for which the right hon. Gentleman’s Department is largely responsible? If the police will not be able to demand production of this card—as the Home Secretary’s paper and statement suggest—what effect can the card possibly have on street crime, or any other crime apart from fraud?

    I fear that neither the Home Secretary’s statement nor his paper present to the British public a clear proposition that can foster a rational debate. In place of clarity and definition, we have obscurity and spin. This issue is too important an area of our national life, too central to the protection of society against fraud, and too fundamental to the preservation of our liberties, for us to accept such obscurity and spin. Will the Home Secretary assure the House that in the coming days and weeks he will make it clear what he is actually asking us to debate?

  • David Blunkett – 2002 Speech on Entitlement Cards and Identity Fraud

    David Blunkett – 2002 Speech on Entitlement Cards and Identity Fraud

    The speech made by David Blunkett, the then Home Secretary, in the House of Commons on 3 July 2002.

    With permission, Mr. Speaker, I wish to make a statement in launching a consultation exercise on entitlement cards and identity fraud. Copies of the consultation paper will be placed in the Vote Office.

    Since the terrorist atrocities in the United States, I have been asked a number of times whether the Government would introduce identity cards. I have made it clear that any debate must not focus on issues of national security alone. Of equal importance are the issues of citizenship and entitlement to services. The focus should therefore be on whether entitlement cards would be genuinely useful to people in their daily lives and in affirming their identity. That will be the acid test of any scheme.

    In a parliamentary answer on 5 February, I ruled out a compulsory card scheme—compulsory in the sense that the card would have to be carried by each individual at all times. As I made clear, any scheme that was eventually approved would not entail police officers or other officials stopping people in the street to demand their card. We are not, therefore, consulting on that option.

    Instead, we would welcome views on a universal entitlement card. Everyone would register for and be issued with such a card, which would be required for the purpose of gaining access to services or employment. We also consider in the consultation paper the pros and cons of a voluntary card, in respect of which people could choose to opt into the scheme. That would be based primarily on their wish for secure and verifiable identification.

    The key issue is the use to which a card might be put, so a genuine consultation exercise is aimed at hearing from the public what services people would like to be linked to a card. We wish to hear from organisations in the public and private sectors about whether they would take advantage of the card to help them with delivering and providing access to their services. We have set out for illustration examples of some areas in which a card might be helpful. In each of them, we demonstrate the cons as well as the pros, to ensure that people understand the downside as well as the gains that can he made.

    I have already mentioned the use of a card to help to provide better and more appropriate access to services. It could also act as a convenient travel document and as a proof of age card, and could help to promote new ways of voting.

    Crucially, an entitlement card could help us to tackle illegal working. Illegal working undermines the minimum wage and the rights and conditions of the lowest paid. An entitlement card could give businesses and employees a simple, straightforward and verifiable way of establishing the right to work legally. It could thereby assist us in tackling the sub-economy.

    Although we have an open mind on how a card scheme could operate, we have set out a possible scheme for comment. Most people already possess some form of photo-id such as a passport or photocard driving licence. Many have already said that they would like fewer cards in their purse or wallet, and some have suggested that a scheme might incorporate both the driving licence and the recently announced passport card. Entitlement cards for those not covered by existing documents would be provided in the form of a non-driving licence card, which would be similar to those issued in many states in the United States. Existing powers to require proof of identity would reflect those used for the purposes of driving and travel.

    The consultation paper asks whether existing passport and driving licence checks are sufficiently secure, given the increasing sophistication of fraud. We would welcome views on whether biometric information such as fingerprints or iris images should be recorded. That would ensure that people could not establish multiple or false identities, which allow the personal fraud with which public and private services are bedevilled.

    Any scheme will have costs, which we spell out for the different options that are given in the paper. We are not talking about large bids to the Treasury that would displace investment in public services. The entitlement card scheme could be made self-financing by increasing charges for more secure passports and driving licences, discounted over the lifetime of the card, and by charging a lower card fee for those who do not have either a driving licence or a passport.

    There is always a danger of bureaucracy in such areas. We spell out that possible downside and illustrate potential ways of dealing with it.

    However, by building on existing systems and expertise we should be able to reduce the risk and costs inherent in an undertaking of this size. [Interruption.]

    Mr. Ronnie Campbell (Blyth Valley)

    This is a vote winner for us.

    Mr. Blunkett

    I am grateful for my hon. Friend’s humour, especially given that 38 million people hold a driving licence and 44 million people, including young people, hold a passport. Technological advance is already projecting major change.

    As I said earlier, we recognise that there are inevitably real worries about the infringement of personal freedoms and historic concerns as regards the legal requirement to carry a card. The paper sets out the way in which a scheme would comply with the Data Protection Act 1998.

    The amount of data required and its accessibility or relevance would be determined by Parliament; the use of a chip would he determined by individuals.

    I hope that my comments will reassure all hon. Members that we painfully understand the genuine need to protect privacy. However, we are asking the following question: given that to drive a car, move freely in and out of the country, open a bank account or obtain credit, we need to identify ourselves correctly, would it be easier or harder if there was one entitlement card to assist the process?

    In addition, each year, thousands of people have their identities stolen by criminals, often without their knowing about it. Bank accounts are raided, and goods and services bought in their name. Identity fraud now amounts to £1.3 billion a year. For good reason, there is genuine concern among the public about that growing criminal activity. A universal entitlement card would be a powerful weapon in the fight against identity fraud. However, it would take time for a card to make its full impact. We are therefore also using the consultation exercise to seek views on several other projects that could provide rapid gains. Today, we are publishing a separate paper on identity fraud, which I have placed in the Library.

    I thank my right hon. Friend the Secretary of State for Work and Pensions for the work that he undertook on the matter when he was Chief Secretary.

    No one should fear correct identification. There is nothing to fear from the proper acknowledgement and recognition of our identity. There is everything to fear from wrongful identification, or the acquisition of our identity for fraudulent purposes.

    Freedom from intrusion into our private lives by public or private organisations is crucial. Freedom to avoid abuse and ease of access to our identity is an essential part of the consultation process. I commend it to the House.

  • David Willetts – 1992 Maiden Speech in the House of Commons

    David Willetts – 1992 Maiden Speech in the House of Commons

    The maiden speech made in the House of Commons by David Willetts, the then Conservative MP for Havant, on 9 July 1992.

    I am most grateful to you, Mr. Deputy Speaker, for allowing me to catch your eye and so make my maiden speech. I follow the conspicuous and eloquent maiden speech of my hon. Friend the Member for High Peak (Mr. Hendry). Mine is very much a valley after his great heights.
    I have the honour of succeeding Sir Ian Lloyd, who was the Member for Havant for 25 years. He was a most assiduous and well-respected constituency Member and he was ably assisted by his wife Frances who made a particular contribution to the local work of the National Society for the Prevention of Cruelty to Children.

    Ian was a most distinguished parliamentarian. He was never cramped by day-to-day political argument but always took the long view. In his maiden speech in 1965, he reminded the House of an ancestor of his who successfully introduced a measure in 1693 to denationalise the mines—one of the preconditions for our industrial revolution. It is particularly apt, therefore, that we will be able to celebrate the 300th anniversary of that measure by setting the mines free once more.

    Perhaps Ian’s influence was strongest in science and technology. It is one of those ironies of political life that, within a few months of his taking his retirement, two measures for which he fought long and hard have finally been implemented. On 1 May, we saw created the Office of Science and Technology, falling within the responsibilities of my right hon. Friend the Chancellor of the Duchy of Lancaster. Ian had also fought for the creation of the Parliamentary Office of Science and Technology. For a while, it was financed entirely through private sponsorship, but again, only a few weeks ago, the House of Commons Commission finally voted public funds to support that office. I hope that both measures can be regarded as our tribute to Sir Ian Lloyd on his retirement.

    Before the House adjourns, I should like to raise several matters that are of concern to my constituents. Havant stands literally at a crossroads and has done so since Roman times. It stands where the A3 from Portsmouth to London intersects the A27 coastal road. A new A27 was recently constructed. It was intended to bring relief to the area, but sadly it has blighted the lives of many people in Warblington and Emsworth. Its deeply ridged concrete surface produces the notorious A27 roar. When the road was opened, the Department of Transport described the surface as “experimental”. It is an experiment which has failed. We in Havant are fighting a battle for bitumen. My hon. Friend the Member for Chichester (Mr. Nelson) and I look forward to meeting our hon. Friend the Minister for Roads and Traffic next week, when we will argue forcefully for resurfacing the A27.

    Hon. Members have often referred in their maiden speeches to the sense of community in their constituencies. Havant has its sense of community, too—but perhaps that sounds a trifle worthy or even dull. I assure the House that it is not like that at all. The other week, I had the honour of taking part in the Havant annual town parade, and was preceded by giant Sooty and Sweep puppets, an array of teenage mutant ninja turtles and the south coast’s finest Norman Wisdom impersonator. It was a most enjoyable event.

    The borough of Havant comprises several distinct communities, and few issues arouse as much emotion as proposals to build on the remaining green land that survives between them. The last thing that we want Havant to become is one long anonymous urban agglomeration. Each part of the constituency, from Hartplain to Emsworth, values its own identity. Waterlooville, for example, is the place where British soldiers camped before embarking to defeat the forces of Napoleonic centralism at Waterloo, that famous battlefield 100 miles south-east of Maastricht. Napoleon, of course, had a notoriously limited grasp of the important idea of subsidiarity—it extended only as far as making his brother King of Spain.

    Emsworth used to be famous for its oysters, until a most unfortunate incident at a banquet nearly 100 years ago, when civil dignitaries, local grandees and councillors became extremely ill on eating Emsworth oysters, and I am afraid that some died. I am sure that hon. Members will agree that that is no way to treat local councillors.

    There are also the people of Hayling Island, who have taken the sensible precaution of preserving their distinct identity by arranging to be an island. It has rich agricultural land and a very fine beach—one of the 16 in the country to have been awarded the coveted blue flag. It was a Hayling islander who first had the idea of putting a mast on a surfboard, and thus windsurfing was created. I am pleased to say that Hayling remains one of the world centres for that sport.

    The names of some parts of my constituency may ring a faint bell with hon. Members who have read their P. G. Wodehouse—Lord Emsworth, Lady Warblington, even the Duchess of Havant. P. G. Wodehouse lived in the area for a time, and parts of it are now immortalised as the titles of upper-class eccentrics in his novels. But my constituents are very far from being characters in a P. G. Wodehouse novel, because, above all, what we do in Havant is make things. We have a concentration of world-class manufacturing firms. We are therefore particularly concerned about the state of the economy.

    There is no disguising the recession. Our firms in Havant are going through a difficult time, just like many firms around the country. It is no good gloating over the recession and taking a snapshot of the economy when it is at the bottom of an economic cycle. Instead, we have to compare the full economic cycle—the upswing and the downswing—with the previous economic cycle. That way, we can take a step back and measure the changes in the underlying performance of the economy. We find that a lot has changed for the better in the 1980s. During the full cycle from 1981 until now, the British economy has had an average growth rate of more than 2 per cent. a year. That compares with the previous economic cycle from 1975 until 1981, when we had an average growth rate of a little more than 1 per cent. per year. It is a measure of the conspicuous improvement in the underlying performance of our industry, and I see in Havant the practical evidence that lies behind those statistics.

    IBM has a large factory in Havant. Its output has trebled in the past few years. Only the other week, an IBM manager was telling me how his Havant plant could compete with its rival IBM plant in Germany and outperform IBM’s Japanese point in both quality and cost control. I asked him how that was achieved and he said that it was because of our more flexible employment legislation. We are now beginning to gain back from the far east the technological lead in computer disc drives which was lost 10 or 20 years ago.

    The other day, another Havant firm was floated on the stock exchange—Kenwood. It was created by Mr. Ken Wood, although he was not, as far as I know, a chef. That firm had languished in a large conglomerate, but, after a management buy-out a few years ago, its performance has been transformed. Kenwood’s sales have been booming and it is now beating competition from France and Germany. There are many other such firms, such as De la Rue systems, Apollo fire detectors and Colt ventilation systems. They are all at the sharp end of British industry and they are exporting much of their output. The dynamism of such firms lies behind the transformation of our trade performance, with our share of world trade increasing in the past three years, having stablished during the 1980s, after years—decades—of decline.

    Several of our exporters in Havant have criticised the performance of the Dutch firm that has taken over some of the short-term insurance responsibilities of the Export Credits Guarantee Department. I have written to my hon. Friend the Minister for Trade about their concerns. Other firms still feel that they do not yet have completely open access to the European market and that we in Britain are more serious about free trade than some other member states of the EC. I therefore welcome the fact that the Government have made completion of the internal market one of their priorities for the United Kingdom’s presidency of the European Community.

    Havant is a young constituency, so we are very interested in the standards of our schools. Many were built during the 1960s and, sadly, are in need of repair or even complete rebuilding. We are worried that educational planners are so preoccupied with the decline in the number of secondary school pupils that they have lost sight of the baby boom and the increase in the number of very young children. We now have nearly 4 million under-fives, compared with a little more than 3 million in the early 1980s.

    In 1998 there will be about 15 per cent. more primary school pupils than in 1984. Therefore, we need to be wary of closing infant and junior schools precisely when we can see an increase in the number of young infants who will soon join them. I shall fight to ensure that changes to our schools proposed by Hampshire county council take account of these trends and the clear wishes of parents and teachers.

    Some people ask me why my constituency, which contains Leigh Park, one of the largest council estates in Britain, returns such a substantial Conservative majority. That is the old snobbish assumption that Conservatism is just for the upper crust. One of the best aspects of the count in Havant on 9 April was when the ballot boxes from Leigh Park were opened and we saw the voting papers pouring out, so many with a cross for the Conservatives. It was evidence that the modern Conservative party understands the aspirations of the people on the council estates as well the people on the Bovis estates.

    They are people who have bought their council house thanks to Conservative policies. They are people who work in private firms and know that the success of those firms, their jobs and their prosperity depend on a healthy private sector. They are people who care about standards in their schools. They are people who try to bring up their children decently and have no truck with the sociological defences of the criminal. They are people who want more choice in health and education, who want to keep a greater share of their pay packets to spend in the way that they know best. The modern Conservative party speaks for them. I am proud to represent them.

  • David Willetts – 2002 Speech on Pensions

    David Willetts – 2002 Speech on Pensions

    The speech made by David Willetts, the then Conservative MP for Havant, in the House of Commons on 2 July 2002.

    I beg to move,

    That this House agrees with the Government’s stated aim of increasing from 40 per cent. to 60 per cent. the proportion of pensioners’ incomes that comes from the private sector, but condemns the Government for failing to pursue policies which would achieve this objective and instead imposing a massive £5 billion annual tax on pension funds, and for presiding over the lowest savings ratio since records began; notes that fewer than four in ten final salary schemes are now open to new members and is shocked by the Government’s complacency in the face of widespread concern about the future of funded pensions: and therefore calls on the Government to cut the burden of regulation on pension funds, reverse the spread of means testing among pensioners, reform annuities and provide better incentives for people to save, so that they can enjoy a prosperous retirement.

    I declare my interests, which appear in the Register of Members’ Interests.

    I welcome the Secretary of State for Work and Pensions to his first debate in his new post. I approach his appointment in a spirit of optimism, and hope that he will use this afternoon’s debate as an opportunity to signal a radical shift in the Government’s approach to the crisis facing funded pensions.

    The time has come for the Government to abandon their complacent denial of a problem. For too long, Ministers have had their heads in the sand: now is the time for the new Secretary of State to admit that there is a problem. I am sure that he has now been made aware of the evidence, which is compelling. The latest figures from the Association of Consulting Actuaries show that fewer than four in 10 final salary pension schemes are still open to new members, and that half of those are contemplating closure.

    A wide range of well-known companies have closed their final salary schemes to new members—Barclays, British Airways, British Telecom, ICI, Lloyds TSB, Marks and Spencer, and Sainsbury. We know from the Government’s own statistics that 59 per cent. of recently retired pensioners now have an income from an occupational pension, against 67 per cent. of recently retired pensioners when Labour came into office. Fewer pensioners are now retiring with an income from an occupational pension. The number of employees without a funded pension arrangement has grown from 40 per cent. to 44 per cent in the past two years alone. No wonder the latest policy document from the Trades Union Congress on the subject begins with a stark statement:

    “The UK’s pension system is in crisis.”

    Ministers used to ignore that evidence by citing statistics that purported to show how much we were saving. I hope that after his salutary experience in the past 24 hours the Secretary of State will not make that mistake this afternoon. I welcome his announcement that he will review the Government’s statistics on pensions contributions, but I hope that he will give the House a full account of what has gone wrong in his Department, not once, but twice. First, it got the assets in our pensions funds wrong, and more recently it got the annual flow of savings into our pension funds wrong as well. One mistake might be regarded as a misfortune, but two from the same Department on the same subject looks like carelessness.

    Mr. John Greenway (Ryedale)

    Is my hon. Friend aware that the Association of British Insurers informed the all-party group on insurance and financial services this morning that it calculates that the savings gap is now £27 billion, most of which relates to pensions? Will he look carefully at proposals to encourage employers to operate better schemes?

    Mr. Willetts

    I am grateful to my hon. Friend for that intervention. He is correct about the scale of the savings gap that we face.

    I wish to press the Secretary of State for more information on the two serious errors made by his Department in the past few months. The first mistake was in respect of the assets in our pension funds. Originally, the Government said that at the end of 1999 we had £784 billion in our pension funds—quite a lot of money. Then, without any explanation or prior notice, they produced a revised set of figures that showed that at the same date—at the end of 1999—they had reduced their estimate of the assets in our pension funds to £679 billion. That is a reduction of £104 billion—probably the biggest single change in the history of British economic statistics.

    The sum that the Government managed to lose is equivalent to the entire national output of Portugal, but, fortunately, three and a half months later we discovered that the money had only been mislaid, and it popped up again. The Government put out a new set of figures, announcing that they had discovered, after all, that in 1999 our pension fund assets were worth £812 billion. So the figure for the value of the assets at one date in time had moved around by £150 billion. Then the Government carried forward the series, to show that having been £812 billion in 1999, the figure was down to £765 billion in 2000 and, on the latest estimates from UBS in the City, £684 billion in 2001.

    That would mean that the assets in our pension funds peaked in 1999 and have been in decline ever since. It might be that 1999 was the peak year of our funded pension assets, not to be seen again. That was the first mistake: the Department revealed a £104 billion reduction in the value of the assets in our pension funds, with no explanation whatsoever. That surely should have set the alarm bells ringing about how unreliable the Government’s statistics were, but no.

    We investigated the figures that the Government were producing for the annual flows into our pension funds. Ministers were saying, “Don’t worry. Everybody else might say that there is a crisis in our funded pensions, but we know that everything is all right, because we are saving £86 billion a year in our pension funds.” If that figure were true, if the Government had stood back and thought about it for a moment, it would have meant that almost 9 per cent. of the entire national output of our country was going in savings in our pension funds—enough to buy for every worker in Britain a two thirds final salary pension, index-linked with inflation. The Government were saying, “Don’t worry, £86 billion a year is being saved.”

    We warned the Government, and we were not alone, that those figures were not credible. Let me quote from the chairman of the Association of Consulting Actuaries, who said:

    “We are extremely worried that the impact of the changes that are taking place in terms of future pensioner incomes is being under-estimated by the Government and, as a result, there has been an inadequate policy response.”

    The Secretary of State was quoted in the papers this morning as saying that within 72 hours of being told that there was a mistake in the statistics, he acted. Let me tell the Secretary of State that I wrote to his predecessor on 8 March 2002, telling him about the mistake and setting out in considerable detail exactly how I believed the mistake had arisen. It is not the case that the Department acted within 72 hours; it took 72 days for it to address the fundamental points that I made in the letter to the right hon. Gentleman’s predecessor.

    There is now an unseemly row going on between the Secretary of State and his own officials. The Secretary of State, in a way that is all too typical of Ministers nowadays, is happy to blame everybody but himself. Referring to statistics on pension contributions, he said yesterday in the House:

    “We have now been informed by the Office for National Statistics that there are problems with the series from which they have been estimated in the past”.

    He was blaming the Office for National Statistics, but in this morning’s Financial Times the Office for National Statistics states:

    “The national statistician is not known for his apologies, and there won’t be one here.”

    The ONS is busy briefing that it is Ministers’ fault and telling the press that it warned Ministers that the information was unreliable, but that they nevertheless kept on producing the figures.

    I hope that the Secretary of State will today give us an end to that briefing and counter-briefing between him and his officials and a clear explanation of when they were first warned by the ONS about the mistakes in the figures, what steps they took to correct them as soon as they heard about them and what advice he was given by the ONS when the Department received my letter of 8 March.

    Mr. Patrick McLoughlin (West Derbyshire)

    My hon. Friend referred to the letter that he sent on 8 March. Presumably, a letter sent by the shadow Secretary of State for Work and Pensions containing such serious accusations would have had an immediate reply from the Secretary of State. Can he tell me when he received the reply and what it said?

    Mr. Willetts

    I received a reply that was prompt, but brief and uninformative—exactly the sort of reply with which we are all too familiar.

    Of course, this is not just a matter of whether Ministers have confidence in the advice of their statisticians and whether statisticians have confidence that Ministers will take heed of their warnings. It ranges beyond that, as it also raises the question whether the structure of pensions in our country is right. Many Ministers were trotting out amazing statistics showing how much we were saving in our pension funds and cited them as evidence that the “structure of pensions” in Britain is “right”. If the evidence is wrong, is the conclusion that they drew from that false evidence wrong as well? I hope that the Secretary of State will also refer to that issue.

    Mr. Douglas Hogg (Sleaford and North Hykeham)

    My hon. Friend is coming to the question of the structure of pensions. Will he confirm that a pensioner would have to accumulate a fund of about £100,000 to be better off than he or she would be having saved nothing at all? That is the case because of the deprivation of top-up payments on the basis of the fund.

    Mr. Willetts

    My right hon. and learned Friend makes a very important point on which we have regularly pressed Ministers. The least that people who are considering taking out a stakeholder pension, for example, are entitled to expect is information from Ministers about how much they believe that they need to build up in that pension during their working lives to float them off means-tested benefits. That is the $64,000 question; indeed, the answer might be $64,000, but we have never had any answer from Ministers. The level could be £100,000, but they have never been willing to address the important point that he makes. Again, I hope that we will hear about that from the Secretary of State.

    The real question is not just misleading statistics—something with which we are all too familiar from this Government—but what is going on with the pension funds and pension savings of the people of this country. That is the central question that the House is debating. Before the Secretary of State points it out, I accept that there are many reasons for the decline of final salary pension schemes in this country. I understand that there is a range of factors, some of which are not in the Government’s control. We are seeing improvements in longevity, and I am sure that hon. Members in all parts of the House will welcome that as good news. The fact that people are living longer is a success that we can celebrate. There have also been changes in the labour market that will change the pattern of pension provision.

    We understand that not everything can be controlled by Ministers, but that very fact makes it even more important that the things that they do control are got right; and that, in so far as the Government control the environment in which people plan for their retirement, they get that right. Our central criticism of the Government is that Ministers have got the things that they control—above all, the burden of tax on occupational pensions—catastrophically wrong.

    Mr. Michael Connarty (Falkirk, East)

    While the hon. Gentleman was recounting some of the things that might have had an effect and which Ministers controlled, did he not think that the Conservative Government’s decision to encourage and allow withdrawal of contributions and the taking of holidays by pension fundholders might have caused the massive deficit in the pension funds on which people are now looking to draw for their retirement?

    Mr. Willetts

    I undertake to cover that point later in my speech, but I want to set it in the context of the other changes. If the hon. Gentleman then thinks that I have still not addressed his question, he can come back to me.

    I want to set out the background to the tax decisions that the Chancellor has taken. At the time of the 1997 Budget, when he introduced his notorious stealth tax on our pension funds, he said:

    “Many pension funds are in substantial surplus and at present many companies are enjoying pension holidays,”—

    he was celebrating the very thing that the hon. Member for Falkirk, East (Mr. Connarty) just mentioned—

    “so this is the right time to undertake a long-needed reform.”—[Official Report, 2 July 1997; Vol. 297, c. 306.]

    The Chancellor explicitly linked the tax imposition on pension funds to the fact that those funds were in surplus.

    Last year, when the Prime Minister was challenged on this matter, he told the House of Commons:

    “The value of pension funds has gone up dramatically as a result of the success of the economy. The abolition of payable tax credits was done for the reasons that we stated at the time. It is the right reform, and as a result of the buoyancy of the stock market the value of people’s pension funds has gone up.”—[Official Report, 7 March 2001; Vol. 364, c. 285.]

    The Government justify their tax increase by saying, “Don’t worry, the stock market is going up and share prices are rising; it’s all okay.” But the value of the stock market has now fallen below the level that it was at when the Chancellor originally made that tax announcement in 1997; it has fallen almost to the level that it was at at the 1997 election. Since the justification for the tax has gone, will the Secretary of State tell us what possible reason he can have for imposing this tax on our pension funds?

    Mr. Steve Webb (Northavon)

    The hon. Gentleman has criticised the £5 billion tax on pension funds. Will he tell us how much of that £5 billion would have been put back under the manifesto on which he stood at the last election?

    Mr. Willetts

    Our manifesto made it clear that we wanted to encourage people to save for their retirement. [HON. MEMBERS: “Aah!”] I would very much like to be able to reverse the tax, but the fact is that that money is now being spent. That is why we cannot pledge to reverse it.

    Mr. Chris Pond (Gravesham)

    Conservative Members continually repeat the figure of £5 billion. Will the hon. Gentleman confirm that the Conservative Government took £10 billion out of the state pension scheme while they were in office?

    Mr. Willetts

    I am coming to this important point: we are not talking about a one-off £5 billion. It is £5 billion a year—year after year, ad infinitum. The figure is now £25 billion and rising every year. That is the point.

    Mr. Frank Field (Birkenhead)

    Will the hon. Gentleman give way?

    Mr. Willetts

    I will give way to the right hon. Gentleman because I greatly respect his expertise in this area, but then I would like to make some progress.

    Mr. Field

    Given that the country is worried about its future pension provision, may I make a plea that, once the hon. Gentleman has made these points, he quickly moves on to what the Opposition will contribute to the evolving debate? It is understandable that he will point out the effect of changes in advance corporation tax on the prosperity of occupational pension funds, but does he agree that that was the second blow, and that the first blow was delivered when the Conservative Government changed the tax laws so that funds that were in surplus had to run their surpluses down to 105 per cent. of their liabilities or face penal rates of tax for not doing so?

    Mr. Willetts

    The fact is that all the other changes that have affected pension funds are dwarfed by the scale of the tax increase that the Chancellor imposed in 1997.

    Mr. Field rose—

    Mr. Willetts

    I would like to make some progress now.

    Mr. Field rose—

    Mr. Willetts

    I will give way to the right hon. Gentleman in a moment, but I want to give him one more figure. I respect his expertise and, as he knows, I am very happy to contribute in a constructive spirit to debates on his own imaginative ideas on pension reform.

    I want to make two points. First, it is incorrect to compare the capital value of the loss of the value of shares—the capital effect—which may be hundreds of billions of pounds, with the flow of £5 billion as a tax hit. We have to realise that this is not just a one-off tax hit; it is £5 billion a year. That is why it is so significant. If we calculate the current cost of a £5 billion-a-year tax, we get a very large sum indeed.
    My second point is that Labour Members regularly mention enormous figures for the total fall in the value of the stock exchange. They now seem keen to tell us how much value shares have lost under their management—that is the point that they like to make. They talk as if those shares all belong to pension funds. Pension funds own only about 18 per cent. of British equities, so it is not correct to compare the £5 billion, which is merely the annual effect of the tax, with the £450 billion, which is the total loss in value of all shares, of which only a small proportion are held by pension funds. That is why the tax impact was so great.

    Mr. Field rose—

    Mr. Willetts

    I shall give way to the right hon. Gentleman one more time, then I shall make some progress.

    Mr. Field

    I am doubly grateful to the hon. Gentleman. Is not it true that ACT has had the effect that it has because the Conservative Government forced pension funds to run down their surpluses? Had they not been forced so to do, many more funds would have had greater buoyancy to enable them to withstand the ACT changes. The running down of surpluses pushed more pensions nearer to the precipice. Most people would say that both sides have made mistakes, but the country wants to hear what constructive proposals the Opposition have.

    Mr. Willetts

    I should now like to make some progress, during which I hope to answer the right hon. Gentleman’s specific question about what proposals we would make.

    I shall move from abstract statistics to something vivid and direct. I cite a Member of the other place, who is well known to Labour Members because he is a Labour supporter, a Labour donor and a Labour peer: Lord Paul of Caparo Industries. I shall quote what he said about the decisions that his steel company is making in its attempt to close its final salary pension scheme. When asked why he was closing his final salary scheme, he said:

    “You see the main reason is we had this so-called final salary scheme…but in view of the tax on dividends”—
    that is the first point he mentions—

    “and also the stock market going all over the place there is no way one can really guarantee a final salary scheme”.

    At the end of his list, he refers to

    “government action like the dividend tax”.

    That is what a Labour peer who runs a business says. He is trying to use a Labour tax to close a final salary pension scheme, and instead put his workers into the Government’s pet pension scheme, the stakeholder pension. He wants them to have one of the Government’s stakeholder pensions.

    What do members of the Labour-supporting steelworkers’ union do in response to a Labour peer trying to impose a Labour pensions policy as a result of a Labour tax? The Labour-supporting trade union goes out on strike. That is what its members are threatening to do as a result of the measures that the Government have taken.

    That is not the end of the story, because there is another stealth tax, perhaps even stealthier than the £5 billion a year tax on dividends, and that is the miserly uprating of the contracted-out rebates that was announced in April. The actuaries William Mercer estimates that those rebates are now about 15 per cent. below the level necessary to provide the contracted-out benefits that companies are obliged to provide as a condition for contracting out.

    With rebates for pensions running at about £11 billion a year, the actuaries are saying that the contracted-out rebate is £1.5 billion a year short. It is not just the £5 billion a year tax on its own, but the £5 billion a year tax plus another £1.5 billion, because the value of the contracted-out rebate does not match the cost of providing the pension that has to be provided in return.

    The Government have taken the two main forms of financial support that Governments have historically given to occupational pensions—the tax relief and the contracted-out rebates—and imposed an extra £6.5 billion a year burden on our pension funds.

    I can now answer the question put by the hon. Member for Falkirk, East. The entire value of the contribution holidays taken by companies between 1987 and 2000, which has exercised Labour Members, works out at £1.4 billion a year. That has a far smaller impact on the value of company pension schemes than the tax and rebate changes made by the Government. I hope that the hon. Gentleman therefore accepts that it is no good turning to employers and blaming them for the effect of their contribution holidays.

    Mr. Connarty

    As an economist, I know that £1.4 billion invested in 1979 would be worth a lot of money now. Because it was not earning money, it is not in the fund. I have just done a little calculation. Some £81 billion has been lost in the value of pension funds if they hold 18 per cent. of the shares that have lost £450 billion in value, as the hon. Gentleman just told us.

    Mr. Willetts

    The hon. Gentleman is in a hole, and he should stop digging. I am comparing a £6.5 billion imposition by the Government with the £1.4 billion a year impact that is the maximum that can be calculated to be the effect of pension contribution holidays.

    Several hon. Members rose—

    Mr. Willetts

    No, I shall not give way. I want to make progress, because many hon. Members wish to speak.

    The effect of the changes—the tax increases and the reduction in the value of contracting-out rebates—is to drive pensioners, now and in future, on to means-tested benefits. That is where they will end up; there will be lower pension saving and more dependency on welfare. In the early 1990s, the Chancellor famously told the Labour party conference:

    “I want the next Labour Government to achieve what in 50 years of the Welfare State has never been achieved. The end of the means test for our elderly people”.

    Well, that is not what the Government are doing. In fact, they will have more than half the entire pensioner population dependent on means-tested benefits. Our vision is very different—it is of a country in which more and more people build up funded savings so that they can enjoy a prosperous retirement that is not dependent on state benefits or means testing, but a source of pride in that they have built up their own savings during their lifetimes

    That is what we believe in, and that is what is being damaged and destroyed by the Government—although the Prime Minister pledged, in one of their first documents after coming into office, that his aim was to change the balance of pensioners’ dependence on benefits and funded pensions. He said that he wanted to reverse the situation whereby pensioners get 40 per cent. of their income from funded savings and 60 per cent. from the state, so that they get 40 per cent. of their income from state benefits and 60 per cent. from funded pension savings. That is an objective that we completely endorse. However, typically of this Prime Minister, despite having that grandiose objective, he has done absolutely nothing to implement it. If one asked him to do the washing up, he would announce that he had a 20-year plan for a cleaner kitchen on which he would undertake widespread consultation—but a pile of dirty crockery would be left at the end of the day. That is what he is like. He has a grandiose objective and no means of implementing it.

    Conservative Members, by contrast, know how that vision should be delivered. We are committed to the reform of annuities. My right hon. Friend the Member for Skipton and Ripon (Mr. Curry) has introduced a private Member’s Bill that would do so. We have voted for such a provision time and again, but the Government tried to stop it every time. We have called for reform of the accounting standard FRS17. I was pleased to hear about today’s announcement whereby, in line with our requests, there will be a delay in implementing it until we know what the European standard will be.

    We have called for less means-testing of pensioners. We worked with the right hon. Member for Birkenhead (Mr. Field) and with the Liberal Democrats to propose an alternative to the pension credit, suggesting that that money could instead have been put into a higher pension for older pensioners, who tend to he poorer, to offer more help to poorer pensioners without more means testing.

    Mr. Barry Gardiner (Brent, North)

    Will the hon. Gentleman give way?

    Mr. Willetts

    No, I want to make more progress in dealing with the perfectly reasonable challenge issued by the right hon. Member for Birkenhead as to what our policies are.

    Another policy is based on our view that the burden of regulation on pension funds is too high and needs to be radically cut back. We strongly support the Pickering review, which I am sure that the Secretary of State will talk about in his speech. However, since the announcement of the Pickering review, which was supposed to reduce the burden of regulation on pension funds, we have had, in the past nine months, another 251 pages of regulations, including 67 pages of statutory instruments and 81 pages from the Inland Revenue. Those have been churned out while the Government have boasted of their review to cut the burden of red tape on pension funds. That is the reality of what they do, despite their claims.

    Over the past five years, the Government have, in a display of hyperactivity, comprehensively messed up the provision of funded pensions in our country. The Government have taxed them more heavily, cut the value of the contracted-out rebates to which they are entitled and abolished SERPS. The Government have brought in more means-testing and introduced a stakeholder pension whose take up by the eligible target group has been pitiful.

    We now face a Labour environment for pension provision, which means less saving, low funded pensions and a poorer retirement for millions of British people. Labour Members should be ashamed of themselves.

  • Charles Kennedy – 2002 Speech on the G8 Summit in Canada

    Charles Kennedy – 2002 Speech on the G8 Summit in Canada

    The speech made by Charles Kennedy, the then Leader of the Liberal Democrats, in the House of Commons on 1 July 2002.

    Although all sane and democratic-thinking people throughout the world will acknowledge the importance of the summit, not least as another essential reaffirmation of the fight against international terrorism, which poses the most fundamental threat to us all, I think that the Prime Minister will accept that despite the progress achieved, there were elements of serious disappointment about the summit.

    Will the right hon. Gentleman acknowledge, not least when we hear some of the more strident tones on this side of the Atlantic as well as on the other side, that an important lesson is that progress can be best effected through efficient international institutions in which countries play a constructive role and do not run with the tide of short-term populist opinion, which, when it comes to unilateralism, far less isolationism, history proves does not work and will not deliver? Does he agree that that is an important conclusion to emerge from the weekend and from the events that have followed on since the summit itself?

    Specifically, in welcoming the reaffirmation statement about the middle east process, will the right hon. Gentleman again take the opportunity to underscore the fact that it never looks good for international countries, democratically based, to be seen to be trying to dictate what other countries should be deciding, not least through a democratic process, however difficult the circumstances may be, where the leadership of those other countries and other states are concerned?

    Secondly, on the issue of weapons of mass destruction, and given the importance that the Prime Minister rightly attached to the developing role of Russia on many fronts over coming years, was there any discussion, or did he have the opportunity to raise, the role of Russia in giving financial and practical support to Iran to develop a nuclear reactor? As the right hon. Gentleman knows, there is considerable international anxiety as to the use to which such a facility, such a capacity, could be put. Russia will be a major and primary beneficiary of the extra funds that are being deployed, to which the United Kingdom will be contributing. Has leverage been exerted on the Russian authorities in that respect?

    Thirdly, there is the central issue of African relief. Obviously, there will be a great welcome for the progress that has been achieved. The Prime Minister quoted the World Bank, but will he acknowledge that the bank has said in the context of what was achieved—that is the progress that was made at the G8 summit—that many of the poorest and most heavily indebted countries will still have unsustainable levels of built-in debt for a long time to come? Therefore, as the right hon. Gentleman has acknowledged, this can be only the beginning of the process. It is by no means the termination of a process.

    Finally, I return to the important lesson of international co-operation. As the right hon. Gentleman well knows, as a party that has long since supported the International Criminal Court, will he confirm again that this country will continue its commitment in that direction, and point out to the American Administration the fundamental error of their ways in that respect?

    The Prime Minister

    Of course, we support the International Criminal Court. It is a commitment that we inherited from the previous Government. That is quite apart from our own position.

    As for the United States and the Palestinian Authority, it is important to be clear about what the United States is and is not saying. The United States is not saying that the Palestinians cannot choose who they want. They can choose who they want. The United States is merely saying that if the Palestinians choose someone who is not a serious partner for peace, that will make it far more difficult to conduct negotiations, and frankly I agree with that.

    As for the WMD, it is true that there are worries about Iran’s nuclear weapons programme. There are also worries about other countries’ nuclear weapons programmes. However, the WMD focuses specifically on the countries of the former Soviet Union. That is important because it is in those countries that there are large stockpiles of chemical and biological weapons. There is the nuclear programme, and so on. They need help to clean up the nuclear submarines, for example, and we should give them that assistance.

    In relation to the African situation and NEPAD, the truthful position is that, of course, there is a lot more that must be done. It is true that we will make a significant impact on the situation, but we will not manage to deal with it all. However, we have made huge progress on where we were a few years ago. The fact is that we have a plan in place that allows us to deal with all the issues in a comprehensive way, increase aid and assistance in return for good governance and deal with issues such as conflict resolution, which are dramatically important in respect of this issue. It is no use dealing simply with issues of debt and aid; we must deal with debt and aid, trade, conflict resolution and some of the specific health and education issues. The benefit of the plan is that it gives us an overall framework within which we can work, but the political will must continue for many years.

  • Iain Duncan Smith – 2002 Speech on the G8 Summit in Canada

    Iain Duncan Smith – 2002 Speech on the G8 Summit in Canada

    The speech made by Iain Duncan Smith, the then Leader of the Opposition, in the House of Commons on 1 July 2002.

    May I begin by thanking the Prime Minister for giving me early sight of his statement? Kananaskis was the first G8 gathering since 11 September, and we welcome the practical steps agreed there to fight international terrorism, and to prevent the spread of weapons and materials of mass destruction. In particular, Kananaskis marked another step in Russia’s re-emergence on the world stage, and I believe it right that the G8 should help to reduce her nuclear stockpiles, and very fitting that Russia will assume presidency of the G8 in 2006.

    We also welcome the G8’s renewed commitment to supporting universal primary education in developing countries, and to assisting those countries in tackling the scourge of diseases such as AIDS, TB, malaria and polio. The progress made on international debt relief is also welcome, although we note that the sums involved barely make up for the fall in world commodity prices that has recently so affected developing economies. The Prime Minister is right to herald the G8’s meeting with African presidents and the UN Secretary-General to discuss the New Partnership for Africa’s Development as a step in the right direction. However, only last October the Prime Minister told his party conference that a partnership for Africa meant

    “no tolerance of bad governance, from the endemic corruption of some states, to the activities of Mr. Mugabe’s henchmen in Zimbabwe.”

    I agreed with him. Does he still stand by that clear statement, and if so, does he not think that the G8 missed an opportunity to send a stark signal to dictators by using the example of Robert Mugabe to show that there will be no meaningful partnership for development with countries that do not respect political freedom and the rule of law?

    The G8 summit could have demanded fresh presidential elections in Zimbabwe; it could have co-ordinated sanctions between the EU and north America; and it could have shown that we mean what we say about good governance in the African continent. Did the Prime Minister argue for those things at the conference, and if so, does he not agree that it is deeply disappointing that Zimbabwe did not merit a mention in the communiqué? or in his statement?

    The G8 pledged itself

    “to work for peace in the Middle East, based on our vision of two states living side by side within secure and recognised borders”.

    It also talked of

    “the agreement on the urgency of reform of Palestinian institutions and its economy, and of free and fair elections”.

    Last Thursday, the Prime Minister said that, in his view, Yasser Arafat has

    “an attitude towards terrorism which has been inconsistent with the notion of Israel’s security.”

    Does the Prime Minister believe that a Palestinian Authority led by Yasser Arafat can ever be consistent with the notion of Israel’s security, or does he agree with Secretary Powell, who said yesterday that if the Palestinians

    “don’t bring in new leaders, then we shouldn’t expect…approaches”

    that may be new or otherwise? Does the Prime Minister agree with that statement or the previous one?

    Today, we learn that the United States is threatening to veto the extension of UN peacekeeping operations in Bosnia unless American troops are granted immunity from prosecution by the International Criminal Court. Did the Prime Minister discuss that with President Bush and other G8 leaders during the summit? Ten days ago, the Defence Secretary told the House,

    “On the ICC, the Government negotiated an effective immunity”.—[Official Report, 20 June 2002; Vol. 387, c. 413.]

    Last week, however, he told a Select Committee that

    “immunity is not quite the right word”.

    Which is it? Perhaps the Prime Minister can tell us what our position is.

    Was the Prime Minister not aware of grave misgivings, which we share, that the court could be used maliciously to put our soldiers in the dock merely for carrying out their duties—[Interruption.] Labour Members may complain, but the French have been able to negotiate immunity for their troops for the next seven years as a condition of signing up to the ICC. When we sought in the course of debate to introduce similar protection, that was rejected, even though it was for British troops. Will the Prime Minister tell us once and for all what protection, if any, our troops will have, apart from the judgment of the ICC—[Interruption.]

    Mr. Speaker

    Order. Please let the Leader of the Opposition speak.

    Mr. Duncan Smith

    They hate it when they get difficult questions as they never hear the answer—[Interruption.] Does the Prime Minister agree with the criticism of the United States launched by the Secretary of State for International Development yesterday in the media and the newspapers? If Kananaskis is to be remembered, it will be judged by what it achieves for southern Africa, especially the 13 million people starving in that region. This is an opportunity to strike up a genuine partnership with Africa that will endure beyond the following day’s headlines. It is a two-way street, however, offering long-term assistance delivered to an agreed timetable from the developed world in return for a genuine commitment by developing countries to improve the governance of their people. But it takes action, not just words. If, with all the might at its disposal, and with the Prime Minister at the conference, the G8 cannot even bring itself to demand change in Zimbabwe, what hope is there for the rest of Africa?

    The Prime Minister

    If I may say so, I thought that that was an extraordinary demonstration of the right hon. Gentleman’s priorities. I make no apology whatever for using the vast majority of the statement to deal with Africa. It was extraordinary that the right hon. Gentleman had more to say about the International Criminal Court than the state of Africa. I shall deal with the issue of Zimbabwe, but first I shall deal with the International Criminal Court, which the Conservatives supported when it was debated in the House. At the time, a Conservative Front-Bench spokesman said:

    “It is a great shame that in the negotiations at Rome, where our team and others bent over backwards to try and assuage the fears of the USA…the USA ultimately felt that it could not join the countries that signed up”.

    Another Conservative spokesman said:

    “I urge the Government to introduce legislation to allow us to ratify the statute in order to realise their intention that we should be among the first 60 states to do so”.—[Official Report, 27 October 1999; Vol. 336, c. 934–36.]

    There is therefore a tinge of opportunism in the Conservatives’ stance today. We have taken our position because we were advised that as a result of the safeguards in place—in particular the issue of complementarity, which means that provided that a nation state is capable of trying people for any crimes, the ICC does not have jurisdiction—it is inconceivable that our peacekeepers would be brought before the court in that way. The best test of whether that is correct or not is what has happened with the International Criminal Tribunal for the former Yugoslavia, which has been running for seven years and has far more intrusive powers than the ICC. In those seven years, not one peacekeeper has been up before the court. The ICC is designed to deal with people committing war crimes or genocide, and I believe that that is right. I entirely understand the concerns of the United States of America, which are perfectly legitimate. Our view, however, is that they are met by the principles that I set out and the constraints on the international court’s development.

    On Zimbabwe, let me make it clear that it will not benefit in any way from the African plan, precisely because of the outrageous conduct of the Zimbabwean Government. That is why it is so important that the plan makes it clear that only the countries that engage in good governance will qualify for the extra aid and assistance. As for what we should do about Zimbabwe, at every level—in the European Union and elsewhere, in the negotiations with the United States—of course we raise the matter.

    I looked very carefully at the words of the shadow Foreign Secretary when he was lambasting the Government for our position on Zimbabwe. I could not find a single sensible, constructive suggestion from him to deal with the matter. This is a classic instance of the Conservatives seizing on an issue, running with it hard, and having nothing but sheer vacuous nonsense to say about it.

    On HIPC, the right hon. Gentleman speaks about the sum barely making up the difference. Let us be clear. When the Government came to office, we had nothing like the help in place for Africa on debt relief or anything else. What we have done through the additional aid means that billions of dollars of debt relief will be saved for those countries, so that the money can be put into education. I should have thought that the right hon. Gentleman would welcome that. [HON. MEMBERS: “We did.”] Well, I suppose that it was a welcome of sorts. It is one of the features of the Conservatives that although in general they are against spending any money, in particular they are always in favour of spending more.

    On the middle east, in relation to Chairman Arafat, let me repeat what I said last week. I believe that if the middle east is to have a chance of getting the peace process that it needs, we need serious people to negotiate with. I have said why I believe that Chairman Arafat has let down the Palestinian people, in particular by rejecting the deal that was offered by Prime Minister Barak: he did a huge disservice to the process of peace in the middle east.

    It is for the Palestinians, of course, to decide whom they elect. We are not in a position to decide that for them, but the point that we must make and that the Americans are making is that if they end up electing leadership that is not serious about partnering the peace process, it will be difficult to make the changes that we want. That is the reality, and it is why we and the Americans have both been saying it. The right hon. Gentleman will find that the vast majority of countries agree.

    In particular, leaving aside for a moment the issue of Chairman Arafat, the key thing that the Bush speech did, and the reason why I think that it should be strongly supported, is that it set out the following principles, which are vital for progress: security for the Palestinian people, and a proper security infrastructure rebuilt; political reform of the Palestinian institutions—that is vital—en route to a viable Palestinian state, living side by side with a secure of Israel. As a result, if there are those changes on the Palestinian side, there must be from Israel in return the commitment to an end to settlements, withdrawal from the occupied territories, and a resolution of the issue on the basis of United Nations Security Council resolutions 242 and 338.

    That is what is important. I believe that we have the basis of a forward plan for the middle east that can work. I believe that it will work, but only if we make sure that those principles are properly implemented. I must say to the right hon. Gentleman that the attempt to make differences between ourselves and the Americans may suit the Opposition, but it does not suit the peace process at all.

    Finally, let me deal with the point that the right hon. Gentleman made, in so far as he dealt with Africa at all. He said that this announcement is a deal. Yes, it is, and it gives us an important chance to make a way forward for Africa, but let us not believe that the whole of Africa is encapsulated in Zimbabwe. It is not. I am pleased to say that, increasingly, Zimbabwe is the exception in Africa, not the rule. At the same time as we take the possible action—not the impossible action—against Zimbabwe, let us congratulate those African leaders on their boldness in coming forward with the initiative, let us support it, and let us make sure that the Africa plan, which initiates the process, is carried through with the determination and vigour that has given rise to it.

  • Tony Blair – 2002 Statement on the G8 Summit in Canada

    Tony Blair – 2002 Statement on the G8 Summit in Canada

    The statement made by Tony Blair, the then Prime Minister, in the House of Commons on 1 July 2002.

    With permission, Mr. Speaker, I should like to make a statement on the G8 Summit in Canada. Copies of all the documents agreed at the summit have been placed in the House Libraries. I pay tribute to Prime Minister Chrétien for his excellent leadership at the meeting.

    This was the first meeting of G8 leaders since 11 September. We reviewed progress made in tackling terrorism, including steps taken to cut off terrorists’ sources of financing, and action in Afghanistan and globally against al-Qaeda and other terrorist networks. I set out detailed UK proposals for curbing opium production in Afghanistan, which is the source of some 90 per cent. of the heroin on our streets, and we agreed collectively to step up efforts to deal with this menace. We also agreed a set of practical measures to enhance the security of the global transport system.

    The events of 11 September proved beyond doubt that terrorists will use any means to attack our countries and our people. We therefore agreed at Kananaskis to launch a new global partnership against the spread of weapons of mass destruction, and so help ensure that these deadly materials cannot fall into the hands of terrorist groups. The world’s largest stocks of sensitive nuclear and chemical materials are in the countries of the former Soviet Union, above all in Russia. The G8 therefore agreed collectively to raise up to $20 billion over the next 10 years to fund projects under the global partnership. Among our priority concerns are the destruction of chemical weapons, the dismantling of decommissioned nuclear submarines and the employment of former weapons scientists. As part of this programme, the UK plans to commit up to $750 million spread over the next decade.

    We also discussed pressing regional issues. On the middle east, G8 leaders reaffirmed their commitment to the two-state vision first set out in the Saudi peace initiative: a state of Israel, secure and accepted by its Arab neighbours, living side by side in peace with a stable and well governed state of Palestine. We called for continuing efforts also on India and Pakistan.

    The Kananaskis summit also marked a major shift in the G7’s relationship with Russia. G7 leaders agreed that Russia will assume the G8 presidency in 2006 and host our summit that year. Taken together with agreement by both the European Union and the United States to grant Russia market economy status, and with the launch of the new NATO/Russia Council, these moves constitute a significant further step in building a strong partnership with Russia on security and economic issues. The next step is Russia’s accession to the World Trade Organisation.

    But the main focus of the summit was Africa. Let me remind the House why. The tragedy of Africa is that it is a rich continent whose people are poor. Africa’s potential is enormous, yet a child in Africa dies of disease, famine or conflict every three seconds. These are facts that shame the civilised world. In Genoa last July, G8 leaders agreed to draw up a comprehensive action plan for Africa. Central to this proposal was the concept of a deal: that African Governments commit themselves to economic, political and governance reforms, and that the G8 responds with more development assistance, more debt relief and greater opportunities for trade.

    Over the past year, African leaders have developed the New Partnership for Africa’s Development—NEPAD. This is an African-led initiative, which puts good governance at its heart. African countries have pledged to raise standards of governance and have committed themselves to a peer-review mechanism that will provide an objective assessment against these new standards. In response, at Kananaskis the G8 published its action plan for Africa. The plan sets out specific measures in eight areas, and I shall deal with some of them.

    Peace and stability are preconditions for successful development everywhere, and especially in Africa. Eight million Africans have died in conflicts in the last 20 years. The G8 committed to intensify efforts to promote peace in the Democratic Republic of Congo and in Sudan, two of Africa’s bloodiest wars, and to consolidate the peace efforts now being made in Angola and Sierra Leone.

    For the long term, we need to develop the peacekeeping capacity of African countries themselves. We agreed that by 2003 we will have in place a joint plan to build regional peacekeeping forces, trained and helped by us. But we must also tackle the underlying issues that so often drive conflict. We pledged our support for the UN initiative to monitor and address the illegal exploitation and international transfer of natural resources from Africa which fuel armed conflicts, including mineral resources, petroleum, timber and water, and to support voluntary control efforts such as the Kimberley process for diamonds.

    Around 50 million children in Africa are not in school of any kind. We agreed therefore to implement the education taskforce report, prepared for the summit, which will significantly increase bilateral aid for basic education for African countries that have a strong policy and financial commitment. Recent analysis by the World Bank sets out clearly which policies work. We agreed that where countries have those policies in place, we will ensure that they have sufficient external finance to meet the goal of universal primary education by 2015.

    We also agreed to continue our efforts to tackle HIV/AIDS through the new global health fund, and G8 countries committed to provide the resources necessary to eradicate polio from Africa by 2005. Twenty-six countries, including 22 in Africa, have already benefited under the enhanced heavily indebted poor countries, or HIPC, initiative, receiving about $62 billion in debt relief. Eventually, 37 countries are expected to benefit.

    At Kananaskis the G8 agreed to provide up to an additional $1 billion for the HIPC trust fund. That will help to ensure that those countries whose debt position has worsened, because of the global economic slowdown and falls in commodity prices, will get enough debt relief to ensure that they are able to exit HIPC with sustainable levels of debt.

    On trade, we agreed to make the WTO Doha round work for developing countries, particularly in Africa. We reaffirmed our commitment to conclude the negotiations no later than 1 January 2005 and, without prejudicing the outcome of the negotiations, to apply that Doha commitment to comprehensive negotiations on agriculture aimed at substantial improvements in market access and reductions in all forms of export subsidies with a view to their being entirely phased out.

    At Monterrey in February the international community pledged to increase official development assistance by $12 billion a year from 2006. In Kananaskis the G8 agreed that at least half of that new money would go to reforming African countries, for investment in line with NEPAD’s own priorities. That is a substantial commitment by any standards—an additional $6 billion a year for the world’s poorest continent. It recognises Africa’s needs, but it is also a strong signal of the G8’s confidence that the commitments that African leaders are making under NEPAD really will transform the environment in which our aid is invested.

    The UK will contribute its share of those additional resources. I can tell the House that we expect UK bilateral spending on Africa to rise from around £650 million a year now to £1 billion by 2006—three times the level that we inherited from the last Conservative Government.
    President Mbeki of South Africa said of the plan that

    “there has never been an engagement of this kind before, certainly not between Africa and the G8…it is a very, very good beginning.”

    President Obasanjo from Nigeria called it a

    “historic moment for Africa and for the whole relationship between the developed and developing world”.

    Africa is not a hopeless continent, as some have described it. Uganda, for example, has reduced poverty by 20 percentage points in the last 10 years, and growth has averaged around 7 per cent. a year. HIPC debt relief and aid have been used to help to provide free primary education. As a result, enrolment has doubled, putting millions of children into school. Mozambique has seen growth of 9 per cent. in the past 4 years, and Tanzania is now providing free primary education. As a result of courageous new policies, Mali has reduced poverty dramatically in the past 4 years.

    Of course, we need to do more—much more—but for the first time there is a comprehensive plan, dealing with all aspects of the African plight. For the first time, it is constructed with reforming African leaders as partners, not as passive recipients of aid. For the first time, we link explicitly and clearly good governance and development.

    So this is not our destination—of an African renaissance—achieved, but it is a new departure. It is a real signal of hope for the future, and it is up to us now to make it a reality. I am proud of the part that Britain has played in it. There are those who say that Africa matters little to the British people. The millions who donate to charities—who give up time, energy and commitment to the cause of Africa—eloquently dispute this. Africa does matter: to us and to humanity. We intend to see the plan through.

  • Tom Tugendhat – 2015 Maiden Speech in the House of Commons

    Tom Tugendhat – 2015 Maiden Speech in the House of Commons

    The maiden speech made by Tom Tugendhat, the Conservative MP for Tonbridge and Malling, in the House of Commons on 11 June 2015.

    Thank you, Madam Deputy Speaker, for calling me to speak in this important debate. I praise the hon. Member for East Lothian (George Kerevan), whose tour de force demonstrated the strength of speaking skills in the northern part of our nation. I am grateful to be called to speak today, because the financing of Europe is a matter in which I must declare an interest. As the husband of a French wife, I know all about foreign powers deciding on British finances.

    It is an honour to represent the people of Tonbridge, Edenbridge and Malling in this wonderful House. Our beautiful towns and villages prove that England is today enjoying a bountiful summer. The fruits of our fields are enjoyed nationwide and I hope that this summer you, Madam Deputy Speaker, will be among the many who relish the Mereworth strawberries when you go to Wimbledon. I could give you a tour of my wonderful constituency based on the pubs, but for brevity I shall stick to the numerous towns and villages.

    In the west, Edenbridge is a wonderful market town that once made cricket balls—indeed, the balls that Lord Cowdrey of Tonbridge smacked out of the ground to the delight of Kent and England fans. Chiddingstone is home to one of the finest ales in our nation, Larkins, which will, I hope, one day be on tap here. A little further on is Wolf Hall or, as it is known on the maps, Penshurst. Sadly, these wonderful communities are not entirely tranquil. As I reminded my right hon. Friend the Secretary State for Transport this morning, Gatwick’s low flights are blighting our days.

    A little to the east, our largest town, Tonbridge, is home to some of the finest schools in our country. I declare an interest again, as a governor of Hillview School, which is committed to the arts, to drama, to design and to fashion and through that enriches the lives of many young people. West Malling’s High Street shows that commerce and community can combine. The award-winning florists and shoe shops are indeed a delight to all. East Malling is more famous abroad than at home, as its agricultural research has introduced new varieties to farmers around the world, while at Hadlow College those innovations are translated into reality by the teaching of a new generation.

    Our community is not cut off from modernity, but communications too often hamper rather than improve lives. Borough Green, for example, is shaken by heavy traffic while many across our area suffer from poor trains and failing phone signals. The response of my right hon. Friend the Secretary of State for Culture, Media and Sport and of the Rail Minister, the Under-Secretary of State for Transport, my hon. Friend the Member for Devizes (Claire Perry), has been exemplary, and I look forward to seeing both issues improved with their welcome support.

    I am not the first to campaign on these matters. The right hon. Sir John Stanley did so before most people can remember and, indeed, before I was born. In his maiden speech, he tested Hansard with the names of some of our wonderfully yclept villages: Wrotham, pronounced “Routem”; Trottiscliffe, pronounced “Trozlee”; and Ightham, pronounced “Item”. As I say them, I know that I am testing Hansard again 40 years later.

    The House knows Sir John’s formidable legacy. His close links with the councils he served alongside and his dedication to every part of the constituency have left an integrated approach and exemplary work ethic that I am determined to maintain. Furthermore, his dedication to our country saw him serve as Minister for housing, for Northern Ireland and for the armed forces. That connection to the armed forces is very strong in Tonbridge and I am proud to join the line of representatives that our town has sent to this House still holding a commission in her Majesty’s armed forces. Sir John continued that tradition of service and his personal courage was clear both from the ministerial offices he held during the darkest days of the troubles and, perhaps most dramatically, as Parliamentary Private Secretary to Baroness Thatcher. That really took courage. I wish Sir John and Lady Stanley well. They deserve our utmost praise and gratitude.

    My time in this House is, to be honest, unlikely to match the length of Sir John’s, so I shall briefly outline my reasons for seeking a voice in the heart of our democratic Union. The first is the law. As St Thomas More, a former occupant of your seat, Madam Deputy Speaker, once put it:

    “I would uphold the law if for no other reason but to protect myself”.

    Though my learned father invariably displayed the judgment of Solomon, I learnt clearly that the rule of law is not the same as the rule of lawyers. Those are not just words of filial rebellion but a call for the sovereignty of the people—the fundamental principle of British governance reasserted many times since Magna Carta 800 years ago—that finds expression in this House, the court of Parliament, and not through the Queen’s courts nor Strasbourg’s.

    My second reason for seeking a voice is dementia. That silent time bomb is affecting the whole community, both directly and as carers, and that in turn calls for community response. That is why I am working with the whole community to help Tonbridge, Edenbridge and West Malling to become dementia-friendly towns that can offer the support we need across west Kent.

    Finally, I come to the armed forces. Having served in combat in Afghanistan and Iraq and latterly as military assistant to the Chief of the Defence Staff, I know that numerical totems are for accountants, not soldiers. It is capability that matters and that is measured in assets and readiness. As we face an uncertain future in a world in which Russia threatens our allies in the east and Islamic-inspired violent extremism is redrawing the maps of the middle east, we must not only have the ships, the soldiers and the aircraft but must be certain that they are ready. Only by demonstrating our readiness on exercises and operations can we reassure our friends and deter our enemies. Deterrence is about much more than the nuclear boats that are the British people’s ultimate guarantee of sovereignty. It is about the morale and training of our soldiers, sailors, airmen and marines. Like a fiat currency, defence relies on confidence in our ability and only truly works when no one dares test it.

    As we continue our debate on financing the European Union, I pay tribute to my right hon. Friend the Prime Minister—the only Prime Minister to have lowered the budget. I am also grateful and humbled to be the voice of my community in this Chamber. I will speak for the thousands who supported me and for the thousands who did not. I pledge to serve them all and the interests of our United Kingdom to the best of my ability, as long as the people of Tonbridge, Edenbridge and Malling will grant me that privilege.