Welfare Reform Bill

Baroness Murphy Excerpts

Tuesday 13th September 2011 Lords Chamber

[Baroness Murphy]

My Lords, having worked so happily with the noble Baroness, Lady King of Bow, in east London I am sorry to tell her that I disagree with almost all the points that she has just made. I support the provisions of the Bill. The Government are promoting the necessary cultural change in the benefits system which the vast majority of people in this country want to see. We need a shift in the expectations of what the state will do for us, and a radical shift in attitudes to choices enabled by the state which generate unintentional moral hazard. However, one thing that we seem not to have talked about sufficiently is the fluidity of dependency in populations and how quickly behaviours change as opportunities and threats change. I am talking not about changes in people’s levels of disability but about population changes and how they respond to situations.

The vast majority of people in receipt of benefits are merely making ends meet in ways that make legitimate sense to them. They have no alternative but to depend on the benefits to which they are entitled. However, there are huge numbers of people who do not consciously think about alternatives, because they do not have to and at present have too little support to do so. In my professional life as a psychiatrist I have witnessed many people with mild and more serious mental health problems who had to give up work during a very bad period, but who should have been assisted and coerced—in the best sense of the word; there is such a thing as good coercion—back into the workplace for the sake of their future health; and whose life has been blighted for many years after a brief episode of illness by a system which allowed them to remain unwell and workless, and indeed insisted that they should, in order to qualify for help. I have also seen in my own family how a modest chronic disability can unconsciously perpetuate dependence. Of course, the vast majority of people in receipt of benefits do not consciously make these choices, but some unconsciously make choices that are in no one’s best interests—if I can pray in aid another Freud.

I have a slightly different approach to the conditionality issues. The major problem with implementing conditionality—which can be so helpful for people to move them on to a different state, and remind them of the threat of this thing which will move them on to a different place—is how it is implemented in the DWP outposts in jobcentres and so on, by staff. Putting in the universal credit system—which we all want to see; it is very noble and sensible—and implementing it fairly will be a challenge. My noble friend Lady Meacher has articulated very well the difficulties with training, particularly in relation to some mental health problems, autism and some mild degrees of learning disability, where people are trying to access work and so on. Those problems are so serious that it is not just the culture of the dependent population that needs assistance to change; it is the dependence of the officers—of those who apply the system—that needs to change. If some of the assessment doctors continue to be reported as being unlistening, dismissive, unsympathetic and poorly trained, the Bill will not work.

I turn to the specifics in changes in disability provisions. I have, of course, read the multiple briefings from organisations working with people with various types of disability and I am surprised that more of them do not welcome the shift from disability living allowance to the more personalised personal independence payment, which is better focused on people’s individual circumstances and does not assume that disability is a fixed, unchanging matter. I have to say that I do not think that the disability support organisations have necessarily been very helpful in assisting people through the realities of how this will work. Enormous anxiety has been generated about the assessment and its efficacy, the interpretation of regulations and how sensitive the assessment tools and descriptors can be made. Of course, it is going to be difficult to get it completely right and we look forward to hearing how Professor Harrington’s second report, which is now apparently available, will change matters again.

There are quite marked differences in the proportions of different populations within the United Kingdom on DLA, which needs some thought. We have heard about the increasing level of the use of disability living allowance. For example, in Scotland there are, I think, something like 6 per cent more people on DLA. It is said that this is because of a different population level of disability in Scotland, due to cardiovascular and cerebrovascular disease, but the age range of disabilities simply does not add up. The reality is that there is different interpretation of the rules north of the border. In many other parts of the country there are variations which do not take account of the fact that we need better assessment and recurrent assessment. I do not think it is right that people should be assessed once and left where they are. You lose all opportunities to continue to implement effective support if you do not assess people on a regular basis. Therefore, I completely disagree with the notion that people should not have to go through an assessment, because it gives them an opportunity to get the help that they need.

The housing benefit system has received much attention so I shall keep my remarks on it brief. I have looked at the analysis of the situation in London carried out by Shelter and the University of Cambridge Centre for Housing and Planning Research. I think that 100,000 households in London that are on housing benefit may theoretically be obliged to move to lower rental areas. However, the analysis does not take sufficient account of the possibility of the rental sector changing its rents. In fact, the map that has been drawn up shows that only three boroughs are affected—one is the City of London, which is a very tiny place where very few people live, and the others are Kensington and Chelsea and Westminster. I suggest that many noble Lords in this House cannot afford to live in Kensington and Chelsea or Westminster.

I see that the noble Baroness, Lady Turner of Camden, is in her place. In fact, it has been demonstrated that Camden is one of those areas where the people we are discussing will still be able to afford to live. There is ample opportunity to assist people through a transitional phase. However, I hope that the Minister will say how that might be done. Much has been made of the polarisation of rich and poor neighbourhoods but that has been going on in London since the early 18th century. A mixed neighbourhood does not comprise exceedingly wealthy pockets being situated next door to profoundly impoverished pockets; that does not seem to me a mixed community. After all, these social goods of a mixed community are not available to working people on low wages who are paying taxes and trying to live in London but who do not receive benefits. I find it difficult to understand why the noble Baroness thinks that that social good should be made available to those who are dependent on benefit.

We need the cultural shift that I have mentioned. Many changes need to be made to the Bill but its basics are profoundly right and I support it.

Pensions Bill [HL]

Baroness Murphy Excerpts

Wednesday 30th March 2011 Lords Chamber

Moved by

[Baroness Murphy]

3: Clause 1, page 2, leave out lines 3 to 6 and insert—

“6th October 1953 to 5th November 1953	6th May 2018
6th November 1953 to 5th December 1953	6th August 2018
6th December 1953 to 5th January 1954	6th October 2018
6th January 1954 to 5th February 1954	6th November 2018
6th February 1954 to 5th March 1954	6th January 2019
6th March 1954 to 5th April 1954	6th March 2019
6th April 1954 to 5th May 1954	6th May 2019
6th May 1954 to 5th June 1954	6th July 2019
6th June 1954 to 5th July 1954	6th September 2019
6th July 1954 to 5th August 1954	6th November 2019
6th August 1954 to 5th September 1954	6th January 2020
6th September 1954 to 5th October 1954	6th March 2020
6th October 1954 to 5th November 1954	6th May 2020
6th November 1954 to 5th December 1954	6th July 2020
6th December 1954 to 5th January 1955	6th September 2020
6th January 1955 to 5th February 1955	6th November 2020
6th February 1955 to 5th March 1955	6th January 2021
6th March 1955 to 5th April 1955	6th March 2021”

[Baroness Murphy]

My Lords, I am sure that the noble Baroness, Lady Greengross, will be here to speak to her amendment in due course, so I am speaking on her behalf. This is not a filibuster despite the comment I have just overheard. In Committee I spoke to the suggestion that we should have a halfway house and that there should be an amelioration of the difficulties that some people will face. I have today supported the Government in the main thrust of their policy but I think that a modest change to help the few who need it would be very helpful indeed. I am now assured that the noble Baroness is in her place, and no doubt she will outline her amendment in more detail. I beg to move.

[Baroness Greengross]

My Lords, I start by thanking the noble Baroness, Lady Murphy. I am sorry; I did not realise that people had come back into the Chamber. I hope that my amendments will be seen as both positive and fair. They represent a compromise and would ensure that, if the Bill becomes law, no women born between 6 October 1953 and 5 April 1955 will have to work for more than one extra year before they receive their state pension. This is a particularly vulnerable group which was eloquently described by the noble Lord, Lord German, in his remarks on the previous amendment.

We know that life expectancy is rising much faster than many of us had realised, and during the Second Reading debate on this Bill I accepted the argument that rises in the state pension age must take place. However, I also said that while I understand completely that deficit reduction is a priority for the Government, this legislation could have a hugely negative impact on certain women. It will have a negative impact on many women, but some groups will be particularly affected. The 33,000 who are the worst affected will face a two-year hike in their state pension age. They will not have any possible opportunity—because they will not have had notice—that will enable them, even if they could, to plan financially for this delay in getting their state pension.

This group of women will be particularly and disproportionately hit by the Government’s proposals. It will also be the second time that these women have had their state pension age changed. Many will also be totally unaware of the changes and they will not be in any way prepared for them. Many of these women, as the noble Baroness, Lady Hollis, illustrated graphically, will be single women and women on lower incomes, who face, as we know, lower life expectancy on average. Many of them have not had a chance to accumulate any form of private pension. They will be reliant solely on the state pension. Many of these women care for older parents or younger grandchildren, and sometimes both at the same time.

Furthermore, the timetable proposed in the Bill is faster than that laid out in the coalition agreement, which promised that the state pension age would not start to rise to 66 until 2020 at the earliest. I do not think I am alone in having received many letters illustrating this point from people who are going to be caught out by this change, which would in any case not offer any immediate help in cutting the deficit, because, as we have heard, there will not be any savings until 2016, by which time the Government plan to have eliminated the current deficit.

The figures in the table I have produced have been verified by some key experts in the pension field as dealing with a particularly difficult problem. Many people I know feel very strongly about this matter and by accepting these amendments the Government could—and I hope will—demonstrate that they want to help the people most affected and worst affected by this necessary reform of the state pension age. I very much hope that the Minister will support my amendments.

--- Later in debate ---

[Lord Freud]

I thank the noble Baroness, Lady Greengross, for this amendment, and for seeking to achieve a compromise position between what we have proposed and what the noble Lord, Lord McKenzie, put forward—the rather more costly proposition that we were discussing a few minutes ago. No one wants to hear a rehearsal of all the arguments that we have just gone through, so I will avoid it. I thank the noble Baroness for her ingenious approach to trying to develop this compromise position. It is a real achievement that she has got ahead of the noble Baroness, Lady Hollis, on a weekend when she had a towel around her head.

This amendment attempts to recoup at least part of the savings that are lost by a gentler transition to 66 years for women by increasing the pension age for men to 66 years first, and then staying within the European equal treatment directive. As she explained, the amendment is intended to ensure that no women will have their state pension age increased by more than 12 months, which would place women on a similar footing to men at least in respect of the adjustment that they would need to make. Picking up on my noble friend Lord German’s teasing about the kinks, I think that we should look at the intention here rather than at the exact drafting. I am very happy to do that, although it is nice to look at the kinks if you are a little techy about the subject.

This timetable would result in deferring the point at which a state pension age of 66 is reached until 2021. However, unlike the amendment tabled by the noble Lord, Lord Boswell, in Committee, which had the same end point, her amendment would cost some £2 billion compared to his £7 billion because the increase in state pension age for men to 66 by April 2020 would go ahead as we have planned. That is why this is such an ingenious amendment.

I must now air the issue of the equal treatment directive, which, frankly, has bedevilled the whole situation and created a lot of problems in devising how we approach it. I ought to spend a little time on the directive.

Directive 79/7 deals with the progressive implementation of the principle of equal treatment for men and women in matters of social security. It provides that there shall be no discrimination on grounds of sex in relation to the benefits to which it applies. When the Pensions Act 1995 was passed, the UK legislated to end gender discrimination in the state pension age by April 2020. Any change we now wish to make needs to be considered in relation to the position left by the 1995 Act. In particular, we need to consider whether any alteration would hinder progress towards equal treatment by either increasing the present gender gap in pension age or prolonging the period of unequal pension ages. Doubtless with the first of these considerations in mind, the noble Baroness’s timetable aims to control the gap. It is certainly the case that the difference in pension ages between men and women sharing the same birth date is no greater than it would otherwise have been under the original equalisation schedule. It does, however, result in a difference of treatment between birth cohorts. I shall try to illustrate that.

At the point that the noble Baroness’s timetable parts company with the proposals in the Bill—that is, for women born from 6 October 1953—the pension age gap between men and women for that birth cohort would stand at five months. It falls to three months for the following cohort but then starts to rise again, to a year for men and women born in March 1954, before rejoining the path set by the 1995 Act, albeit at a year older. By reducing and then increasing the difference in the state pension ages between men and women, and by delaying the final point of pension age equalisation by 12 months relative to the timetable legislated in 1995, the amendments can be seen to be adverse to the progressive equalisation of pensionable age both in themselves and by reference to the Pensions Act 1995.

As I said, the noble Baroness’s proposals would still reduce the overall savings by around £2 billion. While this is significantly less than the £10 billion price tag attached to the amendment of the noble Lord, Lord McKenzie, it is still not a negligible sum. As I have tried to explain, the issue around this amendment is the extent to which it runs contrary to the progressive equalisation of pensionable ages currently on the statute book. As structured, it risks breaching the European directive and being unlawful. Therefore, I am not in a position to support the amendment or even to make any warm noises about it or the possibility of action being taken in another place, as the noble Lord, Lord McKenzie, suggested. However, this House has expressed strong feeling on this matter and the message has undoubtedly gone out loud and clear. On that basis, I urge the noble Baroness to withdraw her amendment.

[Baroness Murphy]

I believe that I must respond to the Minister since I moved the amendment. I have listened to the debate very carefully and thank everyone who has spoken in support of the amendment of the noble Baroness, Lady Greengross. I say to the noble Lord, Lord German, that I do not have a clue why the kinks have arisen. If I was the Minister, I would say at this point, “The noble Baroness, Lady Greengross, will write to you with her responses”. I am sure that we would all like to know the answer to that.

I am very disappointed with the Minister’s response.

[Noble Lords]

Hear, hear!

[Baroness Murphy]

Although he is clearly hampered by the commitment to the directive, it does not seem to be beyond the wit of the Minister and his colleagues to devise a rather warmer response to the wish of this House that a compromise should be made. Given my experience on previous occasions, I think that it would be a good idea for the House to express its opinion on this matter. I wish to test the opinion of the House on this amendment.

Employment and Support Allowance (Limited Capability for Work and Limited Capability for Work-Related Activity) (Amendment) Regulations 2011

Baroness Murphy Excerpts

Wednesday 16th March 2011 Lords Chamber

[Lord McKenzie of Luton]

My Lords, I did not want to interrupt the noble Lord, but I think he said that I had said I was in support of these regulations. I am not and I do not believe I said that—if I did it was certainly not my intention. I tried to play back some of the concerns that have been raised with us. I certainly support the concept of the ESA and of the WCA, but I do not support these particular regulations.

[Baroness Murphy]

I will be very brief because the debate has gone on for quite some time now. Other noble Lords have eloquently described the present difficulties with these regulations. However, I sympathise in some ways with the difficulties that the Government have, because we all share the intention that we should get more people who are currently receiving disability support into work; and what the Government are trying to do—and the previous Government were trying to do—is exceptionally difficult to get right. The development of those descriptors and an assessment tool is going to take more than the time allowed.

I am not saying that you should not pilot, try or try to revise the assessment tool, which is actually what the Government have tried to do. That seems perfectly legitimate, so I am not entirely in support of withdrawing these regulations, because unless we continually try to improve them, we will never get to the point at which they are adequate. However, I return finally to what the noble Baroness, Lady Thomas of Winchester, has said, because it is not the descriptors or the work capacity assessment that are the real problem. The real problem, which I think Professor Harrington described so beautifully, is that the process is,

“mechanistic, impersonal and lacks empathy”.

Here we have a population of worried, anxious people with a profound range of difficult disabilities to try to assess accurately, and there needs to be a culture change within Jobcentre Plus, Atos Healthcare and the healthcare assessments themselves. That is the fundamental problem. We could work on these descriptors. I know that the Government are doing so with extra help from specialists in the mental health field. I ought to declare an interest here as a psychiatrist. The work that is going on is essential, but unless we can change the culture of these assessments to make them more user-friendly we will not get people back into the work that would help them to lead better, fulfilled lives.

Pensions Bill [HL]

Baroness Murphy Excerpts

Tuesday 15th March 2011 Grand Committee

[Baroness Murphy]

My Lords, I added my name to the amendment. First, I declare my total lack of personal interest in the matter. I am not a judge, I am not married to a judge and I have no judges in my family. However, I do count many judges among my friends. I have often been up before judges—in a professional capacity, I hasten to add. As a result, I have developed an enormous admiration for the judiciary of this country. The quality of their decision-making, their willingness to be unpopular and their independence from the subtle and not-so-subtle pressures of the Executive are qualities that we should treasure.

What is proposed in Clause 24 is a short-term crowd pleaser that will have an impact far beyond what is presumed. It is in direct contravention of internationally agreed guidelines on the protection of the independence of the judiciary, as the noble and learned Lord, Lord Mackay of Clashfern, so eloquently outlined.

Let us face it, these proposals could lead to a judicial pay cut in real terms of up to 10 per cent. I realise that there may well be little sympathy around the House for what I am saying, in the light of the fact that many people in the public and private sectors are taking serious pay cuts and we are debating how pensions will be arranged in the future. It is difficult, but this is a very particular case. The Government’s impact assessment acknowledges that the key risks are that the impacts of this measure are as yet unknown—as are the cumulative effects of existing and future policy decisions about judges’ pay and pensions—that the assumed behavioural response that it would make no difference to recruitment might not apply and that the measure may lead to negative impacts on judicial recruitment, retention and performance.

I wish to deviate slightly from this issue. Research carried out in 2008 by Professor Dame Hazel Genn of University College London found that senior practitioners—solicitors and barristers—are deterred from applying for judicial roles, temporarily or permanently, by practical issues relating to judicial working conditions that include not only geographical and jurisdictional deployment of the senior judiciary but their salary, workload, location, support, patterns of working and general flexibility. We know that it is difficult enough to persuade a top commercial QC earning £2 million a year to accept a judicial appointment, but frankly they are not the judges whom I am worried about. I am far more worried about those lawyers, barristers and especially solicitors, many of whom are women or from ethnic minorities, who cannot see the advantages of entering the judiciary now because of the poor working environment and rewards, but who are attracted to the pension arrangements that would allow them to retire after 20 years. I remind noble Lords that this is not a job that you can enter as an apprentice; you must be a mature and experienced person in the first place.

People say that the arrangements are generous, but they are actually nothing like as generous as for those who remain as solicitors or barristers. There is the difficulty that when practitioners are at their highest earning potential, say in their 40s, they are obliged to seek part-time judicial experience if they want to progress up the ladder. Few are persuaded now. What will this sudden drop in take-home pay do to the application level? It is not the money alone; it is the signal of being undervalued by an Executive looking for PR advantage, but these numbers will make precious little difference to this nation’s debt.

At a time when we are beginning to see the fruits of the work of the Judicial Appointments Commission in appointing more women and people from ethnic minorities, under the admirable chairmanship of the noble Baroness, Lady Prashar, it seems particularly insensitive to throw a spanner in the works with this unnecessary piece of legislation. The experience needed for a High Court post means that only 20 per cent of the pool of eligible senior lawyers are women and only 5 per cent are people from a black or other ethnic minority background. However, boosting numbers of women and other groups is not just a matter of time and a growing pool. One big disincentive is the earnings cut when becoming a member of the judiciary. People marry later, and people in their 50s still have significant financial commitments until late on—commitments to children do not go away.

Let us think back to the last time the Executive attempted to cut judicial salaries. It resulted, among other things, in the following judges’ memorandum and the eventual restoration of salaries. It stated:

“It is we think beyond question that the judges are not in the position occupied by Civil Servants. They are appointed to hold particular offices of dignity and exceptional importance. They occupy a vital place in the Constitution of this country ... It has for over two centuries been considered essential that their security and independence should be accounted inviolate ... In this matter, our country has set an example to the world, and we believe that the respect felt by the people for an English Judge has been partly due to his unique position, a feeling which will survive with difficulty if his salary can be reduced or if he were an ordinary salaried servant of the Crown”.

Clause 24 raises serious concerns in my mind about placing the power to alter judicial pay of sitting judges after appointment in the hands of the Executive. This should be a matter of concern among those who take an interest in judicial independence. There has been little notice of or consultation on that, or any serious look at the real impact.

It is also unclear whether the proposal would impact on the maximum contribution into the judicial additional voluntary contribution scheme, which currently has a 15 per cent ceiling on contributions, with resulting loss of pension in old age as well as lost salary during service. I ask about that because it is especially important for young judges who might not have acquired pensions in earlier parts of their career. If the proposed statutory contributions reduced the amount that one could make voluntarily, it might well significantly reduce the pension available under the voluntary scheme. I hope that the Minister can clarify that for me.

When any judge accepts appointment, the basis for that appointment is that, however successful the individual may have been in his or her previous career, he or she may never return to it. Financial security and pension provision are an essential part of the decision whether to accept appointment. That is particularly the case with the 52 masters who are on the lowest salary band of the judiciary. They earn the same as a basic NHS consultant salary or approximately two-thirds of what a family GP earns. They are not generously paid for the level of responsibility that they carry and many will not serve 20 years to maximise their pension.

I echo what the noble and learned Lord, Lord Mackay of Clashfern, said about the internationally accepted constitutional safeguards for judicial independence since at least the Act of Settlement in 1701, with restrictions on post hoc adverse variation of judicial terms of service. Those were incorporated into Latimer House guidelines in 2003 and repeated in the Bangalore principles and implementation measures published by the UN-sponsored Judicial Integrity Group in 2010. Then there is the draft Universal Declaration on the Independence of Justice by the UN, also known as the Singhvi declaration, and the Universal Charter of the Judge, approved by the International Association of Judges on 17 November 1999. I could go on: there were also the Council of Europe recommendations, the Consultative Council of European Judges’ opinion and the Burgh House principles. There are clearly numerous guidelines about maintaining the independence of the judiciary by not varying their terms and conditions of service after appointment.

The present judiciary had a legitimate expectation when accepting offers of appointment that their pension arrangements would not be adversely changed after appointment. It would be wrong and damaging to our international reputation for this country not to respect that principle.

Finally, I pray in aid the report of the noble Lord, Lord Hutton, which was published earlier this week. He states at page 146, paragraph 6.92:

“The protections might also cover the extent to which there might be limitations on adjustments to existing judicial pensions to meet international conventions for protecting judicial remuneration, while also having regard to factors such as increases in the value of pensions from increasing longevity”.

In summary, Clause 24 will affect a modest number of people seriously and adversely and contravenes our international agreements on judicial pensions. We are not saying that people who are appointed in future could not make further contributions, but they would be appointed knowing that that was the case. I strongly support the amendment in the name of the noble and learned Lord, Lord Mackay of Clashfern.

[Baroness Butler-Sloss]

My Lords, I have wondered whether to speak on this amendment. First, perhaps, I should apologise to the noble and learned Lord, Lord Mackay of Clashfern, and to the Committee for arriving late. I had not appreciated that Amendment 55 was up on the monitor, but I came in as soon as I could.

I must declare an interest, not only as a former senior judge but also as someone whose father was a High Court judge, so I have spent my entire legal life in the shadow of the judiciary. I strongly support not only the noble and learned Lord, Lord Mackay of Clashfern, but particularly the noble Baroness, Lady Murphy, who made points that are really worth taking into account. It is not so much the senior judiciary—there are probably not more than 110 to 120 of them—as the middle-ranking judiciary who ought to be considered. They labour in the fields, with not particularly generous salaries, as the noble Baroness, Lady Murphy, said. I would add to her Queen’s Bench masters the judges of the various tribunals, who are crucial to the administration of justice in the tribunals; the district judges in the magistrates’ courts; and the district judges across the country trying civil and family work. They are a very important part of the judiciary. Many of them accepted a reduction of income. It is not only the top incomes that senior QCs can make that are reduced, as the people taking these middle-ranking posts also earn reasonable incomes. Almost every person who becomes a judge takes a cut in income.

People generally become judges because they feel that they ought to be paying back to society what they have gained by being barristers and solicitors. It is an important part of the judiciary that they are there to serve the public. They are a special group of people in the country. They are significantly independent and they have to remain independent to be able to challenge the Government in the courts. The Administrative Court is a thorn in the flesh of every Government, of whichever political persuasion. I believe that there is a book called “Looking Over Your Shoulder at the Administrative Court”, which trains new civil servants to cope with the slings and arrows of not so much outrageous fortune as the decisions of the Administrative Court.

I think that the public and perhaps noble Lords ought to remember that our judiciary is not only significantly independent but significantly incorruptible. Since I have left being a judge, I have been on parliamentary visits to various countries. In one of the eastern European countries that had been under the control of communism, I was told by one of the Ministers that the corruption of their judges was the most worrying part about their efforts to improve their country to meet the requirements of the European Community. My husband was a judge in Kenya at one time, under the ODA system, and I was told by my friends who were in the law in Kenya about the judges whom they knew to be corrupt. Eighteen were sacked at one time and my particular friend said that that was not all who should have been sacked. Very recently I was at one of the IPU meetings here in this building. I was talking about human rights and two Kenyan lawyers got up and said, “What do we do about the corruption of our judiciary?”. Forgive me for saying this as a former judge—since I no longer sit, I think that I can say it safely—but we are lucky in our judiciary. What the Government are proposing is in effect to break the contracts of the existing judiciary by substituting something else by statute.

I am well aware that everyone in the pensions system is going to suffer and I well understand people asking why the judiciary should be immune from the suffering of the public. So far as the future is concerned, as the noble and learned Lord, Lord Mackay of Clashfern, said, I express no view. It may well be entirely appropriate that the judiciary of the future should be asked to make the contributions that it has not been asked to make in the past; if I may say so, the Government ought just to think of the points that the noble Baroness, Lady Murphy, has made about that. However, breaking the existing contracts of existing judges who have given up their practices as barristers and solicitors to serve the community under a certain arrangement, where you take on that job without making a contribution, is something that the Government ought to think about long and hard. I very much support the amendment.

--- Later in debate ---

[The Minister of State, Ministry of Justice (Lord McNally)]

My Lords, as always, this has been an interesting debate. It is always difficult to respond to the noble and learned Lord, Lord Mackay, because his wonderful accent means that if he read from the telephone book it would sound like he was reading tablets of stone. Nevertheless, I may have to challenge him before the end of my remarks. The noble Baroness, Lady Murphy, was almost unique in her contribution, until the 7th cavalry arrived in the shape of the noble Lord, Lord Stoneham, but she at least is a friend of judges. She was quick on the attack by calling the government plans a “short-term crowd pleaser”, and saying that the Executive were looking for short-term advantages and imposing a real-terms pay cut of 10 per cent.

Running through many of the contributions has been an “Apocalypse Now” threat that does not stand up against the content of the proposal. I listened to what the noble Baroness said about women and about black and other ethnic minorities in the judiciary. I am the diversity Minister at the MoJ. Having looked at the problem of diversity in the judiciary, I honestly do not think that a modest request for contribution to pensions is the real problem about the disgraceful level of employment of women and other groups in the judiciary. I assure her that I am in close touch with Dame Hazel Genn and the noble Baronesses, Lady Neuberger and Lady Prashar, on those issues.

We went right back to 1701 to find the threat to our judiciary. The noble and learned Baroness, Lady Butler-Sloss, is not only a judge but the daughter of a judge. She made a moving appeal for the middle ranking judiciary—the toilers in the field, as she put it. Nobody challenges the fact that we have a judiciary motivated by public service, independent and incorruptible. I believe, and the past 10 months have deepened my conviction, that we are extremely lucky in our judiciary. Again, the arguments deployed do not bear close examination against the Government’s modest proposals. I also have to disagree with the noble and learned Lord, Lord Scott. I do not think that the proposal will affect those applying for the Bench.

I understand why the noble and learned Lord, Lord Falconer, is not here. We are not arguing that the contributions will have a significant impact on the economy. Of course not; the numbers are not large enough. I will not even try to suggest that we are all in this together, but I take up the point made by the noble Lord, Lord McKenzie: before fighting this to the last ditch, the judiciary should look at their reputation in appearing to fight so hard on a matter of self-interest—even if dressed up in constitutional garb—when others much less well equipped to do so, as the noble Lord, Lord Stoneham, said, are having to face serious sacrifice.

I take up the challenge of the noble and learned Lord, Lord Falconer: is what we are proposing reasonable? I believe that the vast majority of people in this country would find what we are doing reasonable. To suggest that the Government are somehow threatening the independence of the judiciary or the rule of law is not sensible. There is no sword of Damocles or anything like it. I urge the judiciary not to cry wolf too loud on this.

I turn to the noble Lord, Lord McAvoy. My goodness, I am sorry that we are in the Moses Room, because his intervention deserved a much wider audience. I thought that he was going to say that even his old colleagues in the Unite shop stewards’ movement would have blushed at some of the arguments deployed today, but as he rises ever higher in the hierarchy of this House by defending its institutions, it did not surprise me when he intervened on the side of the judges.

I am grateful to the noble Lord, Lord Stoneham, for his intervention. Judges’ pensions are extremely generous: 648 former judicial officeholders receive a pension of between £40,000 and £70,000; 23 former judicial officeholders receive a pension of between £100,000 and £110,000. The average annual pension across the judiciary is just over £41,000. That is not at the lower end of the mass of our society.

That is why the noble Lord, Lord McKenzie, was quite right to warn about reputational risk. I do not believe that this is a slippery slope. I do not believe that it is a reputational risk. On the specific point of how we would handle the powers of the Bill, regulations would be brought forward by statutory instrument subject to negative resolution.

The noble Lord asked me: what is our response to the amendment? I have to tell your Lordships that we believe that it is simply incorrect to assert that the clause could have any impact on judicial independence or raise any concerns about judges’ terms of service. This measure is part of a wider action aimed at ensuring that public service pension provision remains fair and affordable. The Government will not do anything to undermine judicial independence and the rule of law, which is of fundamental constitutional importance. The measures will not affect the pension entitlement of judicial members in any way. Once a member of a judicial pension scheme satisfies the provisions regarding entitlement under the particular scheme, they will still be entitled to their pension benefits, which will not be affected by the contributions they have made. The aim of the measure is that the contributions, when payable, will go towards the cost of the scheme overall—a situation which, as the noble Lord, Lord Stoneham, pointed out, is not enjoyed by many people in many other pension schemes.

The principle that serving judges must pay contributions out of their salary towards the cost of pension provision is already well established. I am pleased to note that the amendment does not object to the principle of taking personal contributions from judges. To take the Judicial Pensions and Retirement Act 1993, which provides the main scheme referred to by the noble and learned Lord, Lord Mackay, members of that scheme pay contributions towards the cost of dependant benefits. That is provided for by Section 9. When the provision was implemented under the Judicial Pensions (Contributions) Regulations 1995, it applied to all those who held qualifying judicial office under the scheme at that time. There were no exceptions for serving judicial officeholders.

The inability of the Government to reduce judges’ pay is seen as an important element of judicial independence by a number of international agreements and recommendations, which have been referred to in the debate by several speakers—the fear being that in some parts of the world, judicial salaries may be reduced if justices do not make the right rulings. I am sure that none of us would seriously suggest that we are in danger of that in this country.

However, that aside, as a matter of ordinary language it would not be usual for a requirement to pay a contribution to a pension scheme to be characterised as a reduction of salary; gross levels of payment to judges will remain unaffected by this measure. Crucially, it would not be correct to assert that the Executive will establish and vary the level of personal judicial pension contributions because the rate at which such contributions will be taken will be set by secondary legislation and so will be subject to the scrutiny and will of Parliament.

Furthermore, this measure does not contravene the letter or the spirit of statutory provisions covering judicial salary protection. Just as it would be incorrect to assert that this measure could impact on judicial independence, so it would be wrong to state that it is inconsistent with the terms of appointment of judicial officeholders. The entitlement to, and benefits derived from, a judicial pension are set out in legislation. Judges’ terms of appointment do not add to, or repeal, the provisions of judicial pensions legislation and do not, therefore, provide any independent source of “right” to the maintenance of the present legislative arrangements in respect of those already appointed to qualifying judicial office.

Any expectation that Parliament may not legislate to alter judicial pension schemes enshrined in legislation cannot be right, particularly when the proposed measures are designed to ensure that such schemes remain affordable and are proposed as part of a consistent range of measures regarding public service pension schemes as a whole. Concerns about judicial independence and judges’ terms of service with regard to this measure are, therefore, unfounded.

It is important to be clear that this measure will apply to judicial officeholders in post in April 2012. However, I should also emphasise a point made by my noble friend Lord Freud during the Second Reading of this Bill; that is, that contributions will only be taken during the period in which an individual judge is accruing pension benefits. For those judges already entitled to a full pension before implementation in April 2012, contributions will not be taken from their salary. Those judges who have part completed their full accrual period before April 2012 will pay contributions only for the outstanding balance of that period. The value of the pension benefits accrued up to the point of introduction of the measure will be unaffected.

At the spending review, the coalition Government took the tough decision to put the economy back on a sustainable footing. To do this they had to consider carefully where spending could be reduced and where costs could be rebalanced to reduce the burden to taxpayers. The noble Baroness, Lady Murphy, called in aid the noble Lord, Lord Hutton, and so do I, for he states clearly that there is a strong case in the short term for increasing the contributions to meet the costs of providing these pensions. This is what we are doing. It is right that judges should begin to contribute towards their own pensions just as other public service pension scheme members will be expected to contribute more.

There are currently around 2,200 salaried judges. Of these, around 200 are estimated to have already accrued a full pension and so would not make personal pension contributions. Therefore, the requirement to pay personal pension contributions will apply to approximately 2,000 salaried judges when it is introduced.

On average, in recent years, around 120 salaried judges have joined the judiciary each year. To restrict the introduction of personal contributions only to new judges appointed from April 2012 would, therefore, either not allow us to make the level of short-term savings on judicial pensions costs which we need to seek in tackling the deficit, or would require an extremely high level of contribution by new judges to help cover the costs of existing judges’ pensions. There is, anyway, as I hope I have made clear, no justification for restricting the measure in this way.

As I said, I will not try to persuade noble Lords that we are all in this together but it would be widely misunderstood if judges seemed to opt themselves out of the realities faced by the rest of the population.

[Baroness Murphy]

Before the Minister sits down, will he clarify the point about the judicial additional voluntary contributions scheme? I believe that at the moment individuals can exercise their right to add up to 15 per cent. What impact would this new proposal have on the ability of individuals who have a relatively short time to make their contributions before retirement to add to that scheme?

Pensions Bill [HL]

Baroness Murphy Excerpts

Tuesday 1st March 2011 Grand Committee

[Baroness Turner of Camden]

My Lords, I support my noble friend Lord McKenzie with regard to this section of the Bill. I have received many letters from various organisations about the Bill—like most people, I expect—and one thing that they all have in common is that they are all very concerned about what they regard as the acceleration of the timetable for women. I have had correspondence from Saga, which tells me that it believes that 2.6 million women will be adversely affected. It points out that the women concerned had not expected such an accelerated timetable. The TUC has also said that it is concerned about the acceleration and its effect upon women. Age UK is taking a similar posture, and so is Which?.

A number of noble Lords who contributed to our Second Reading debate concentrated on what they saw as the unfairness to women in the accelerated timetable. The amendments proposed by my noble friend are an attempt to deal with that, for which I thank him. I hope that the Government will be prepared to take on board that this is a real concern about a Bill that basically many people accept. Practically everyone who has written to me says that they accept the whole idea of auto-involvement—of people being in the pension industry, so to speak, and being pension savers for very often the first time in their lives. It therefore seems a shame that we might get some difficulty and some opposition to a Bill that I basically accept. I accept that we have to have a different age of retirement and so on because of longevity and the various other arguments that have been advanced in favour of the Bill, but on the other hand there is a lot of concern about the accelerated timetable. I hope that the Government can do something to help us in that regard.

[Baroness Murphy]

My Lords, I very much support the amendment of the noble Lord, Lord McKenzie, but I have to say I am very attracted to the halfway position, as it were, of the noble Lord, Lord Boswell. The difficulty is, as Machiavelli said, that you should not have a second line of defence—that you should just go straight through—so I am nervous in saying that I like the compromise idea but there is a basic serious unfairness to a very small group of women. We are talking about a one-off event over a period of three to four years, I think it is, and it would be a good idea to address this. If the halfway house makes more sense in overall financial terms, though, I would support that.

[Lord German]

There is a general sense that there is a group of people who are being treated unfairly because of the rate of acceleration, although maybe I will explain later that they shall actually be decelerating towards their pension. The general aspect here is that something needs to be done to ameliorate that unfairness. One of the key ways where that could take place, and I hope that the Government are minded to tell us about this, is to seek an upward revision and a much enhanced state pension as a right for all. That is an issue that would affect people in a much more radical way if it were the case. I have read many of the newspaper articles about the uprating of the state pension, but this seems to be almost a hand-in-glove issue. If you use the financing that comes from this measure and put it into a pot, you will be doing something to ameliorate the situation.

I am keen to examine the issue raised by my noble friend Lord Boswell about trying to make sure that we do not overly deal badly and unfairly with a particular cohort of people. The issue primarily relates to a singular group of women. This is a one-off group, because there will not normally be a similar group of people who are so badly affected by the one-year to two-year increase in such a rapid space of time. After all, there is an acceleration of something like three months in age and four months in pension age. You could not get much faster than that, unless you went to three months and 29 days, or whatever; you would be talking shades. It is a very fast rate of acceleration for a particular cohort of women, who will disappear when the system has worked its way through. That acceleration will not be apparent.

There must therefore be some measure which the Government can take to either improve the post-retirement abilities of women in this cohort or lengthen the timetable somewhat to accommodate the interests of a particularly badly-done-by group. When two people whose ages differ by as little as three, four or eight months, or whatever, stand shoulder to shoulder within a year, they will find that the differential in the rate of change in their retirement age is magnified. I hope that the Minister will reflect upon the amendments before us and try to see whether measures can be taken to ameliorate the situation of this group of women.

--- Later in debate ---

[Baroness Murphy]

My Lords, one cannot help but sympathise with the case put forward by the noble Baroness, Lady Turner of Camden. I think it is what we would call the plumber’s knees problem. The noble Baroness, Lady Hollis, is addressing another issue entirely. However, I am concerned about the procedures that would have to be put in place to give effect to the provision. We already have a vast machinery of state tribunals assessing when people do this and when they are entitled to that. If we were to vary the state pension age, through whatever reasonable means, you can bet your bottom dollar that a bureaucracy of tribunals would grow up to implement it, just as we have had now for other areas. Therefore, this needs addressing; certainly what has been called heavy-end caring needs addressing. In the case of the terrible differential between people who work in very physical environments and those who do not, where there is clearly often an age-related difficulty, this does not seem to be the mechanism.

If I may, I put in my epidemiologist’s tuppenceworth on the prediction of whether people who live longer have age-related disabilities—or disabilities of long duration, which is worse. The evidence is extremely difficult to predict because it changes from cohort to cohort and has changed during the course of my research life. It is true that disease-free life expectancy is growing dramatically, and so is the number of disability-burdened years, although the rate of disability-burdened years may not be growing very fast. It is extraordinarily difficult to predict, because of the lifestyles now of people aged 40 to 60, what the rate of disease-free life will be in 20 to 30 years. We all want to live longer, and die faster, do we not?

What the noble Baroness, Lady Hollis, said was correct, but the Minister’s response was equally correct. It is extremely difficult to predict. However, on this amdendment, I worry about the bureaucracy that might be put in place to respond to such flexibility, but I recognise that we ought through some mechanism to address the early disability of people to respond to their own employment and that they should have the flexibility to stop and not be impoverished by stopping.

[Lord Flight]

I echo the comments of the noble Baroness. One of our failings as a people is that, because people are decent, we try to provide for everything and clutter it up to the extent that the system becomes difficult and expensive to operate. I was interested to note, in seeking to check my state pension entitlements, that the office that you approach got them wrong; we had a pleasant correspondence. I hate to think, even as we stand, that in people’s combination of straightforward state pension, SERPS and whatever else they may have, the records are all over the place. We may sit here and think that it is lovely, but actually it is a shambles.

I can well imagine that, if you start adding all sorts of groups and special things out of decency, you will get, as the noble Baroness described, a huge increase in bureaucracy. It strikes me that pensions is one area that has suffered in this country from too much complexity. My view is that the issues raised need addressing, but that they will have to be addressed in a separate box through welfare arrangements.

Finally, I still take the view that when the arrangements came in after the war, the age of 65 then was something like 78 today in terms of equivalent fitness and health. I desperately want to see a decent state pension for everyone at the age of 70 that will lift them right away from dependency, pension credits and everything else. I should like to see things tidied up, slimmed down and done as cheaply as possible to achieve that as soon as possible. It strikes me that for the overwhelming majority, that is the need. Although there are cases of people who have done heavy work with physical demands and whose bodies have worn out, the great majority of people will be pretty fit until they are 70.