Superannuation Bill

Baroness Drake Excerpts

Wednesday 10th November 2010 Grand Committee

[Lord McKenzie of Luton]

The Minister will understand that, as we do not like the caps and do not want them to continue in any form, we cannot support—although will not oppose today—this set of amendments. The Minister says that the amendments put a time-limit on the provisions but, as I read Amendment 14, it states:

“An order under subsection (4)(c) may not be made after the end of the period of 3 years beginning with the day on which this Act is passed (‘the relevant period’ … But the Minister may by order extend (on one or more occasions) the relevant period”.

Am I right that the import of that is: as long as it is done before the end of the three-year period, you can keep it going for another six months, then another six after that, then another six after that and another six after that? What on earth is the difference from the current position? Okay, you have to get your decisions in order so that you do not miss the deadlines but, if I may say so, that does not seem much of an advance on where we are at the moment. I would be very surprised if the Delegated Powers Committee was comfortable with that. What is the magic about three years, in any event, even if it was just three years and six months, which is not what the Bill provides? Is it not the case that if there is to be a legal challenge to the arrangements which are introduced, that is likely to happen quite quickly? It is unlikely that somebody would accept the scheme if they are unhappy with it, and wait X number of years before pursuing that, so why three years? What is the magic of that?

I do not think that the Minister has yet dealt with the issue about the recipients of the relevant orders and of that going only to the House of Commons, which is what the amendment preserves. It does not challenge that at all. I would accept that we have some advance here on where we are but, frankly, it is not much of one. The fact that we will not oppose it today does not mean that we will not wish to raise and challenge it on Report.

Another thing it does not do is to address the issue of being able to extend the sunset clause. That is in subsection (4)(b) of the provisions, while this is particularly addressed at subsection (4)(c), the sunrise provisions. I am not sure that it sets the sun on the sunrise provisions, because if I read it correctly—the Minister will no doubt sort me out if I am incorrect—there is the opportunity to keep this going in perpetuity, which simply cannot be right.

[Baroness Drake]

If I might concur with my noble friend Lord McKenzie, given a sunrise provision with a life of three years and a reading of the amendment which seems to suggest that there can be unlimited occasions on which it can be extended, that does not seem much of a concession—if I may presume, having not been in Grand Committee before. Even listening to the Minister’s argument that there is a need for a fallback position, surely that is still taking the need for it to an extreme extent, because if there were to be a human rights challenge from one or more of the unions I am sure that it would manifest itself very quickly. I cannot see them waiting indefinitely or until thousands of people are made redundant before they would make such a challenge.

I remain extremely concerned that this seems a very open-ended provision, even allowing for the argument put about the need for the Government to have a fallback position in the event of a legal challenge. If I were a trade union negotiator, I would feel very anxious about the integrity of the negotiating process on an ongoing basis if there were such an unlimited sunrise provision.

[Lord Wallace of Saltaire]

My Lords, there were two questions which I will take. One was the question that was rightly raised—I thank the noble Lord for reminding me—of scrutiny only by the other place. The second is on the justification for three years, which might be extended.

On the first, noble Lords will recall that there was some debate in the other place on whether this should be considered a money Bill, because it involves public expenditure. The justification for scrutiny only by the other House is that changes made by order under the Bill could have a direct impact on public expenditure, for example by changing the level of the caps as provided for under Clause 2 or by reviving the powers to impose caps under Clause 2 using the powers in Clause 3(4). These seem to the Government to attract Commons financial privilege. It is therefore entirely defensible for the Bill to have been drafted to allow scrutiny of these delegated powers in that House and not this one.

On the three-year time limit, it is not simply a question of when a judicial or a legal challenge might be mounted; it is a question of how long it might take for a process of appeal—for a legal challenge—to be worked through. I am sure that noble Lords who have been involved in trade union negotiations will recall how lengthy litigation can be as one moves from lower courts to higher courts and, when human rights considerations are at stake, even occasionally appealing to the European Court of Human Rights. The only reason why the three years is there—and why there is a permissible clause for extension by order each time, which has to be laid before the House for six months at a time—is for the extreme case that such successive appeals might be taken in an extended judicial process to try to prevent a compensation scheme being implemented.

I am willing to take this back to see whether it is possible to squeeze the three-year extension any further, but we are playing, as we can, with making the workable scheme possible. On that basis, I hope that the noble Lord may be willing to accept the government amendments as they stand.