City of London Corporation: Pensions

Debate between Baroness Hoey and Rishi Sunak

Thursday 22nd February 2018 Commons Chamber

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Rishi Sunak)]

I congratulate the hon. Member for Vauxhall (Kate Hoey) on securing this debate. I had the pleasure of fighting alongside her in the referendum campaign, and I can see that she has for many years applied the same tireless and tenacious campaigning instincts to this case on behalf of her constituent, and I commend her for those efforts. I particularly welcome the chance to respond to the points that she has made and, indeed, I share her regret that we have had to debate this on the Floor of the House.

Pensions are not just about regulations and procedures; they are about security and peace of mind. We all want to retire on a decent income, and as we live longer and healthier lives, we want to be able to save more and make the most of our retirement. Public sector schemes such as the local government pension scheme include insurance-style benefits that help to cushion us against the most unfortunate events. There are protections when staff are made redundant, and provision for their dependants if they die in service, as well as ill-health benefits such as those at issue in this debate.

Throughout the past 100 years, the LGPS developed as a national scheme to become a valuable and integral part of local government, valued by millions. That said, as the recently ensconced Minister responsible for local government pensions, I can attest that it is not a simple scheme. Some of that complexity comes from the need to cover a wide range of possible scenarios. The provisions dealing with injuries at work—such as those suffered by Mr Bell—will interact with statutory schemes of compensation, employers’ sickness procedures and employment law. Injuries can lead to periods of sickness and to permanent or temporary incapacity. Justice comes from treating like cases alike, but also from making fine judgments and distinctions between cases where appropriate. I want the best possible administration of the scheme. It has been a key aim of the Government to improve transparency and accountability in decision making by such public bodies.

The LGPS is a national scheme set out in regulations, but it is important to note that it is administered locally. That has been a long-standing feature of the scheme, and often one of its strengths. As the hon. Lady will know, local authorities are independent bodies and, first and foremost, they are accountable to their electorates through the ballot box, rather than to central Government. That said, there are routes for independent redress where local authorities fail in their obligations—for example, through the council’s complaints procedure, the local government ombudsman or, when appropriate, the pensions ombudsman. Potentially, and finally, the case can be considered by the courts by judicial review.

It is a feature of any legal system of redress that administrative deadlines and statutes of limitation are associated with each of those, and I am sure the hon. Lady will recognise that all sides in a dispute often benefit from the certainty and closure that those afford. I also believe, however, that if local authorities are to retain the trust of the people they serve, they should always seek to act honourably and correct mistakes, even if they are under no legal obligation to do so. Where I feel a need to call out mistakes, I will do so, from the Dispatch Box if necessary. I hope that my voice in these matters will not be without some moral force.

It gives me comfort that in general the LGPS is well-administered, and the vast majority of complaints received about it are resolved internally. It pays out £9.5 billion in benefits each year, and despite that I am told that there were fewer than 91 complaints to the pensions ombudsman, and of those, fewer than 15% were upheld. Clearly some mistakes will be made, and the impact of those mistakes could be hugely significant for vulnerable people or those of limited means who rely on their pension to sustain their dignity and standard of living in old age.

Let me turn to the details of Mr Bell’s case. The hon. Lady forcefully made her case that the City of London has not complied with its statutory obligations or delivered justice to Mr Bell. As she would expect, my officials have been in touch with the City of London to hear their explanation of events.

It is worth stressing at the outset the obvious difficulty of understanding in precise detail events that happened almost 20 years ago. However, from hearing both sides, it strikes me as common ground that as a consequence of the accident on 6 November 2000, Mr Bell suffered some degree of incapacity. The question appears to be about the degree of severity and the permanence of that incapacity. I expect it is difficult for any medical expert to give a very definite answer to those questions. It is for that very reason that I would expect this to be settled as a question of fact by someone that both parties can have confidence in. That is the plain meaning and intent of regulation 97.

I can see no good reason why the City of London Corporation chose not to instruct an independent registered medical practitioner who could have either confirmed or corrected the judgment that was reached, no doubt in good faith, by the corporation’s occupational health team. Not only was an IRMP not instructed, other consequences followed the failure to consider that a decision of any kind was due in respect of Mr Bell’s application for ill-health retirement. The protections and regulations 98 to 102, whereby a member is informed of his rights of appeal and a reference to the Pensions Advisory Service, appear also not to have kicked in as one might reasonably have expected.

Of course, I cannot say what conclusions the IRMP would have reached, or whether indeed an appeal would have been successful. What I can say is that Mr Bell does seem to have suffered an injustice by being denied an independent assessment of this case. However, I must note that Mr Bell did receive legal advice from a reputable firm of lawyers in settling the terms of his dismissal, for limited efficiency, in 2002. In coming to a decision on how best to pursue his case and whether to accept those terms of settlement, I would hope that the advice he received was complete and accurate.

Let me now address directly the questions the hon. Lady put to me in her closing. First, I am very happy to place on record my concern that the regulations do not seem to have been followed in this case. My clear view is that on the facts available to me at this time an IRMP ought to have been engaged in 2002. If the hon. Lady believes it may serve some purpose, I would be very happy to write formally to the corporation and ask it to justify this omission to me.

On the hon. Lady’s other questions more generally, I personally am not aware and the Department is not aware of any other such cases where this practice was followed, nor of any other specific complaints about the corporation’s administration practices. I would hope that if there were cases similar to Mr Bell’s, they would have found their way, correctly and appropriately, to the pensions ombudsman. There, I believe, the arguments advanced would have received a strong hearing.

The hon. Lady asked if I wish to tighten the rules in this area. Having reviewed it, to my mind the regulations then, as now, are clear about the process to be followed. The regulations then, as now, place the correct emphasis on the need for decisions to be taken in a timely way, based on independent advice and with further avenues for advice or appeal clearly signposted. Having reflected on it, the issue at stake here is not that the regulations themselves were at fault, but whether they were properly adhered to and followed. If they were not, however, then at this point, sadly, I cannot see any specific further steps I can take to pursue this case on behalf of the hon. Lady and Mr Bell.

If we were having this conversation at the time of the incident in question, Mr Bell would have had the avenue of appeal and redress through the council’s own two-stage appeal process. Following that, we could have gone to the pensions ombudsman, the Secretary of State or the courts through judicial review. As I said earlier, however, there are good and necessary reasons why we have time limits and limitations in the determination of rights and liabilities. Statutes of limitation are common across civil and criminal law in this country and across the world. Parties must be allowed to know when a matter has finally been settled. Given where we are now, 18 years after the incident in question, unfortunately the ability to access any of those avenues has obviously expired.

At the time, Mr Bell did receive legal advice and sought a settlement with his employers. I very much hope that his solicitors at the time discussed with him these various avenues that may well still have been available at that time and provided advice to him on the best course of action. It may well be worth Mr Bell or the hon. Lady discussing the matter again with the solicitors to make sure that all the correct procedures and avenues were explored. Owing to the separation of powers between central and local government, I cannot intervene in the day-to-day activities of local authorities, except where specific provision is made by Parliament, and I am not aware of any specific basis on which I could intervene directly in this case.

[Kate Hoey]

I thank the Minister for giving way—I know he is coming to the end of his speech—and for his thoughtful response. Does he accept that it should have been up to the City of London Corporation, a council hugely rich in personnel, to inform Mr Bell of his rights? It should not have been up to a solicitor a few years later. Surely there was a moral duty if not a legal duty—I think there is a legal duty; I think the regulations give a legal duty—to inform him of his rights and to allow that independent medical practitioner. That was where it all went wrong—something so, so simple. Does he agree that there is a moral case in respect of the City of London Corporation? I should add also that I would welcome his writing to it on my and Mr Bell’s behalf.

[Rishi Sunak]

Not only is there a moral duty; but—the hon. Lady is right—there is a legal duty both to have used an independent medical practitioner and to have informed Mr Bell of his rights at the time. Mr Bell would, I hope, have been aware of those rights through many of the other communications he would have received as a member of the scheme, but at the point when it became relevant, under articles and provisions 98 to 102, he should have been made aware of them again. It will be of limited comfort to Mr Bell and the hon. Lady, but the pension scheme’s statutory advisory board is currently reviewing the means of resolving disputes locally and looking at simplifying the rules around ill-health retirement. I expect recommendations from the board in due course, and obviously this matter will weigh on my mind as I review those recommendations.

In conclusion, though we have discussed process, I do not want to lose sight of the individual at the centre of this, Mr Bell. The accident that caused him to lose his job seems such a small and random piece of bad luck. That we are still talking about it today shows how unfairness of any kind—of fate or in administration—can be very hard to accept and live with. I do not know whether he is adequately supported today and leading a fulfilling and satisfying life, but I sincerely hope that he is. I commend the hon. Lady again for her tireless work in advocating so forcefully on behalf of her constituent. I know that she will keep pushing the City of London Corporation to examine afresh whether it acted fairly and in good conscience, and I will support her in those efforts. I wish her and Mr Bell every success as she pursues this case.

Question put and agreed to.