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.
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.