(11 years, 2 months ago)
Commons ChamberRead Hansard Text Read Debate Ministerial Extracts
The Economic Secretary to the Treasury (Sajid Javid)
I beg to move,
That this House disagrees with the Lords in their Amendment 78B but proposes amendment (a) to the Bill in lieu of that amendment.
I begin by thanking Opposition Members for their constructive engagement on the treatment of Ministry of Defence police and fire workers’ normal pension age under the Bill. Important issues were explored during our debate on Monday, when views were put forward passionately by Members on both sides of the House. The Government have acknowledged the strength of feeling. In the other place, my colleague Lord Newby has explained that the Government fully accept the spirit of the Lords amendment we are considering today.
We are willing to include a review of defence fire and rescue service and MOD police members’ NPA in the Bill and formalise the approach that I announced we were intending to take. The review will ensure that the issue can be discussed formally by the appropriate parties to consider the best way forward. However, although the Government agree with the amendment, it requires some small changes to ensure that it works as intended. I urge hon. Members to agree to the tweaks put forward in our amendment.
I will explain briefly why the wording of the Government’s amendment differs slightly from that proposed in the other place. First, we have made a small change to the nature of what must be reported on in order to make it more precise and legally certain. Secondly, the names of the work forces were incorrect. The reference to the “Defence Fire and Rescue Service” has been adjusted to make it consistent with the terms of other legislation that describes the same work force.
Thirdly, the amendment passed to us from the other place seems to confer a double role on the Secretary of State for Defence, as he would be included by both references. My right hon. Friend is a very busy man. It cannot be right to require him both to prepare and to lay a report in conjunction with himself—that would defy the laws of physics. I assume that was unintentional, and it is easily rectified by Government amendment (a).
Finally, and most importantly, it is unclear when the amendment is to come into force. The Opposition in the other place have called for the review to be completed within six months. I am keen to address the House on that point, because I believe that there has been some confusion about whether that means six months from the date of Royal Assent, or six months after section 9 comes into effect. The Opposition’s amendment would require a review within six months of the Act coming into force. However, the Act will be brought into force in stages and some sections might not be commenced for more than a year. We do not intend section 9 to be one of those stages.
The Government’s amendment proposes that the review period should be six months from when clause 9, which relates to the state pension age link, comes into force. That provision alters the normal pension ages for those work forces, so that is where the focus should be. It is our intention that the clause should be commenced as early as possible. Standard Government rules require that provisions in a Bill are not commenced until two months after Royal Assent unless the Bill itself provides for earlier commencement, as the hon. Member for Nottingham East (Chris Leslie) will be aware from his time in government.
We should all remember that the key effect of the review is likely to be felt in 2015, which is when the new schemes are brought in, but the important point is that there will be no delay. The Government have every incentive to resolve the terms and conditions of the MOD police and the defence fire and rescue service as soon as possible, since they will be needed to design and implement the new scheme, which will cater for them in time for April 2015.
Sir Bob Russell (Colchester) (LD)
The Minister will recall that on Monday I was very critical of the absence of the Ministry of Defence from the debate. Has there been any involvement with it in the past 48 hours?
Sajid Javid
Yes, absolutely. It is of course a full Government position; it represents the views of not only the Treasury, but the MOD. In fact, I discussed the matter only yesterday with the Secretary of State for Defence.
Dr Eilidh Whiteford (Banff and Buchan) (SNP)
I congratulate the Minister on seeing sense and reaching an accommodation with the Lords on the amendment. Can he assure me that he will continue to work with the representatives of the MOD police and firefighters to ensure that the work force representations are brought into the process?
Sajid Javid
I am not used to getting warm words from the hon. Lady, and when I do I take them with good grace. I thank her for her warm welcome. I can assure her that when the MOD commences the review—it has already begun the preliminary work on it—it will include all stakeholders, and that of course includes the representatives of the two work forces in question.
The clock is already ticking and a delay would make implementation of the schemes all the more challenging. Moreover, I should emphasise that the time scale is already much tighter than that which Members requested during our debate on Monday. My colleague Lord Newby stated yesterday that the Government would not kick the review into the long grass. I reiterate that statement today and fully endorse his comments. I give the House my assurance that the MOD and the Treasury will work to ensure not only that clause 9 and the new clause set out in our amendment are commenced as soon as possible, but that preliminary work on the review will start before the new clause is commenced. I hope that hon. Members will agree that rejecting the amendment passed to us for consideration from the Lords and replacing it with the Government’s slightly more refined version is the most sensible way forward.
Chris Leslie (Nottingham East) (Lab/Co-op)
It is refreshing to have the Minister in this emollient frame of mind. His words suggest a tacit acknowledgment that he has been on the wrong side of the argument to date. I am pleased that the House of Lords continued to insist that the Government should think afresh on the issue. Clearly, there is an unfair disparity between Ministry of Defence and civilian firefighters and police, and every rule of natural justice suggested that that anomaly needed to be addressed.
I make the point in passing that it was a little unwarranted for the Government to tell the Lords that it was not allowed to continue with its point of principle—this was one way of shutting it up—because of financial privilege. Nevertheless, I am glad at the ingenuity of the Lords in keeping the issue alive with their proposal for a review.
The Government could not resist tinkering with that proposal. The Minister has explained why he made some of those changes, but I want to press him for a few reassurances. We welcome the proposal for a review, as broadly agreed by the Lords, but we now need—if you will forgive the pun, Mr Deputy Speaker—to keep the Government’s feet to the fire.
The Government have to address the issue of the physical demands on individual personnel and whether it is reasonable to insist that they should keep working in arduous and dangerous conditions until they are 67. The review has to get the Government and Ministers finally to answer the question about how it can possibly be fair for one set of firefighters and police to work until they are 60 and for MOD staff to work until they are 67. The review should address whether the job description can realistically be fulfilled by those who continue to work into their late 60s.
Ministers have changed the Lords amendment so that it no longer mentions the need for statements of requirements, which are official MOD documents and would address any concerns, especially among heads of forces. However, I think that the Government’s amendment sort of preserves the original meaning. The review should also reveal whether an insistence on staff working until they are 67 would have a perverse effect on the taxpayer, because it might cost more as a result of the numbers forced into early retirement on the grounds of sickness or illness.
I have three principal questions on which I would like the Minister’s reassurance, although he has addressed them in part. First—the hon. Member for Colchester (Sir Bob Russell) alluded to this—the Lords felt that it was important that Treasury Ministers and the Secretary of State for Defence should undertake the review jointly, that it should not be brushed off to one Department or the other, or to a third, independent reviewer, and that it should be the Government’s set of conclusions. Sometimes Treasury documents refer to a Secretary of State and sometimes they refer to the Chancellor of the Exchequer. I sensed from what the Minister said that both Departments would be involved in the review. Will he give that reassurance?
Secondly, when will we get the review? The Minister said that it is not normal practice to refer to Royal Assent as the date that triggers the announcement of how many months it will take before reports and reviews will be produced. I am not sure whether I agree with him, but I will go with it on this occasion, given that he has spoken in the spirit of compromise today. He said that the process would start as soon as possible. I got the impression that he was implicitly saying that it would take two months or similar to trigger clause 9 and then six months thereafter. He implied that we would get the review at the end of this calendar year, so it would be helpful if he could confirm that general time frame. He also responded to the intervention by the hon. Member for Banff and Buchan (Dr Whiteford) by reassuring us that there will be ongoing consultation with employee representatives.
Thirdly, a source of anxiety since our debate on Monday—the Minister has not touched on this—has been the question of the abatement of MOD firefighter and police pay as part of the necessary adjustment to ensure parity between the civilian and civil service pension schemes. Obviously, it would be unfair to deduct a sum from the pay of MOD firefighters and police at source—that seems to be the case historically—as well as to ask them to pay again when additional contributions begin under the new scheme. Will the Minister assure us that that discrepancy will be properly addressed in the review? The risk of a duplication of contributions would be unfair and there is some anxiety about this. The level of the abatement needs properly to reflect the relative value of benefits in the new scheme. This is a complex point, but it would help if the Minister could assure us that the abatement issue will be drawn to a conclusion.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I join in the thanks to the Minister and our noble friend Lord Newby for their work during all the stages of this end-of-term attempt at reconciliation, which has at last been achieved. I also thank colleagues on the Labour Benches and those on our Back Benches and on the Cross Benches in the Lords who made sure that the remaining issue in this huge Bill could be resolved amicably. The Lords’ proposal and the Minister’s amendment mean that this is not a closed book and I hope that this hugely important Bill to reform public sector pensions will be put on to the statute book this week. There is now a fixed time frame in which to address further the anomaly that was not spotted by the previous Government or by Lord Hutton, but that has since been brought to our attention.
I also join in the thanks to Mr Kirby and his colleagues for their efforts in making sure that we understood their concerns. Their request is not unfair. They are asking to be put in a position similar to those who do similar jobs—they are not identical jobs—in the civilian services. My hon. Friend the Member for Colchester (Sir Bob Russell) made the obvious point about the logic of that position when he said earlier this week that the argument in favour of Ministry of Defence firefighters and police and rescue people retiring at 60, as is the case in the civilian services, is, bluntly, that they do dangerous jobs that require them to be particularly fit. The argument that they can be expected to do their job properly and protect themselves and others after they reach 60 has not been made. We are all in favour of more flexible ages of retirement. I buy the argument that the retirement age has to go up, both in general and in relation to public servants, and I support the Government’s proposals, but we have to accept that the time when people are not fit enough to do certain jobs will come earlier than others.
I have a few questions. The Bill’s provisions will commence when it is enacted, but that does not apply to those in clause 9—the pension age provisions—which will be subject to an announcement by the Chancellor or a Treasury Minister at a later date. That is a perfectly normal procedure. Will the Minister explain in his response to the hon. Member for Nottingham East (Chris Leslie) when he expects that announcement to be made? That will be of wider interest, because it is a hugely important issue.
Secondly, I ask the Minister to accept that some of the facts and figures that he has used, which I think have also been used by the Government in the other place, are not accepted as facts and may be misinformed. I am not accusing the Minister of doing that wilfully. For example, he has made the fairly strong argument that an 8% increase in contributions would be required from these firefighers, rescue workers and police to fund a pension age of 60. The workers say that it would be a very small figure of about 2%.
That ties in to my third question. It is important that we take into account what this change would cost the Treasury and the taxpayer. The Government have in both Houses given the estimate of £10 million a year. The people who have come to see me have argued that the sum will be much smaller and may be in the order of £2 million a year. I do not pretend to be an expert on these issues, but I am sure that the Minister will say when he winds up that the Government will not go into this process with a closed view. It is a negotiation, so the arguments will be heard and I hope that the true facts will be accepted.
It has been accepted already in the conversations with the Ministry of Defence that the pension age for fire and rescue workers and police in the services can be held at 65 and not rise in line with the provisions of the Bill, which take account of increasing life expectancy. I want to reinforce the point that the people who will be affected argue not that their pension age should held at 65, but that it should be 60, in line with similar civilian workers. If that age is later renegotiated across the piece for firefighters, rescue workers and police, that is fine. I think the Minister understands that, but I wanted to put it on the record that that is where the workers want to start from. That is a reasonable expectation.
I am grateful to the Minister and am pleased that we have been able to carry out this bicameral activity again in a spirit of determined resolution, which I hope will mean that this important Bill becomes an Act on the statute book this week.
Sir Bob Russell
I am delighted that the trust and confidence that I placed in the Minister on the public record on Monday has been justified. I thank him, those around him and those in the other place for bringing matters to a resolution that, although a compromise, is one that I hope we can all live with. In that spirit of concord, I thank Opposition Front Benchers for their contribution. We should praise the representatives of the Ministry of Defence police and fire and rescue service, because without their sterling endeavours, we might have ended up with a right mess.
I remain critical of the Ministry of Defence, because if it had been involved at an earlier stage, we would not have got to the stage where a resolution was needed. I am still concerned that we are looking at this matter the wrong way around. It is the fitness of the people to do these very dangerous jobs that should be paramount, not the retirement age or the pension. They defend and provide security and fire services for nuclear installations. I urge the Ministry of Defence, notwithstanding the resolution of this particular matter, to look calmly at the security and fire protection that its police and fire and rescue services provide in the national interest to ensure that they are fit for purpose. Nobody doubts the courage and commitment of the individuals concerned. However, as I said on Monday, do we really want our nuclear installations to be looked after by people of my age?
Mr Alan Reid (Argyll and Bute) (LD)
I am pleased that the Government have agreed to make this amendment. My constituents who work as police officers and firefighters at Faslane and Coulport will be pleased that the Government have listened to their case and tabled this amendment.
The report will look at the impact of the Bill on the health and well-being of defence police and firefighters, and at the ability of those over 60 to meet the strict fitness requirements that are necessary for the important and dangerous job that they do. The report will also consider the consequences of early retirement for the workers who are forced to retire early on health grounds because they cannot meet the stringent fitness requirements in their 60s, as well as the cost to the taxpayer.
The Government inherited this anomaly and it was missed by Lord Hutton in preparing his report. The Government have been faithful to the Hutton report in the Bill. I am pleased that they have listened to the concerns of defence police and firefighters, and have agreed to table this amendment.
After Monday’s debate, defence police and firefighters in my constituency expressed concerns to me about the size of the abatement of their pay that it was suggested might be necessary to reduce their retirement age to 60. I hope that all the calculations on the abatement of pay will be transparent in the report. Calculating pension contributions is an enormously complex process. Following a review by the Government Actuary’s Department, the abatement on pay rates for MOD firefighters has been reduced retrospectively from 9% to 7.8% from 1 April last year. The fact that that calculation has been made only recently and has been backdated is an indication of how complicated a subject this is. It is important that during the review, all the calculations are transparent and independently verified, and that the workers are allowed to ask questions about them.
I am delighted that the Government have listened and brought forward the review. I am fairly confident that the review will find that it is not good for the workers or for the taxpayer for people doing these strenuous and dangerous jobs to work beyond 60. The calculations will show that if the retirement age is 65 or 68 and significant numbers of people are forced to retire early on health grounds, both the taxpayer and the worker will lose out. The worker will lose out because they will not get the full pension that they had expected. The taxpayer will lose out because the amount that has been paid into the pension pot will not cover the cost of the pension if it is paid out early.
It would not be right for these workers to work beyond 60. The right comparison is with civilian firefighters and police who work for local authority fire services or other police forces. I am fairly confident that the review will recommend a retirement age of 60. I congratulate the Government on listening to the legitimate concerns that have been put forward.
Sajid Javid
I thank all hon. Members who spoke in the debate on Monday and who have spoken to me outside the Chamber. In particular, I thank my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) and my hon. Friends the Members for Colchester (Sir Bob Russell) and for Argyll and Bute (Mr Reid) who have spoken today. I also want to put it on the record that my right hon. Friend the Member for East Yorkshire (Mr Knight) has made representations on behalf of his constituents on this important issue. He has been robust in representing them, even though as a member of the Whips Office he is not able to speak on their behalf in the Chamber, and that is reflected in the Government’s amendment.