Public Service Pensions and Judicial Offices Bill [HL]

Lord Hope of Craighead Excerpts

2nd reading
Tuesday 7th September 2021 Lords Chamber

[Lord Hope of Craighead (CB)]

My Lords, the Bill affects many people in public service, but I hope that I may be forgiven for concentrating, like others, on the branch of the public service with which I am most familiar: the judiciary. So far as they are concerned, it seems to me that the Bill seeks to do two things that are to be welcomed.

The four noble and learned Lords who have spoken before me have said almost everything that could be said one way or the other, but I should like to stress one or two points. The first is the correction of the mistake that was made in 2015, when the new pension scheme was introduced, that applied to all members of the judiciary still in service, apart from those within 10 years of retirement. That scheme was significantly less advantageous because it was registered for tax purposes. That had very unwelcome consequences for those who had contributed to their own pension schemes while in practice. The prospect of the large and wholly unplanned-for tax bills that would be the result of becoming subject to that scheme was a severe disincentive.

I have experience of this—although the Bill certainly does not apply to me because I retired eight years ago. I made provisions at a very early stage in my career as a self-employed member of the Bar, with no prospect of becoming a judge at that stage, and indeed for a long time in my career. I sacrificed money that might have been used for other things to build up a reserve for myself and my family. This is what people had done, and now they were faced with these very unwelcome tax consequences—so it is no surprise that it was a disincentive, and it is right that the Government should seek to remove it. I also welcome the fact that the Government have decided, in this respect, to treat all members of the judiciary equally.

The legislation that we are presented with in the Bill is not an easy read, but the policy background is very clearly set out in the Explanatory Notes and the impact assessment, and I am also grateful to the Minister for his very helpful introduction. There is one aspect of the judicial scheme—the only one that will be available for everyone after 31 March 2022—which is especially welcome: the fact that the scheme will be unregistered for tax purposes. As I understand it, compensation is also being offered to those who incurred tax liabilities under the previous scheme—and that too is very welcome.

As has been pointed out, all eligible members will be able to opt for the scheme that is most beneficial to them under the options exercise that is to take place in the autumn of 2022. I hope that the Minister can assure the House that guidance will be offered to all those who are involved in that exercise in good time so that they may be fully informed before they take this decision. Guidance of that kind was offered in the past when I had to make that kind of choice, and it would be very helpful if the Government were to assure us that that will be done in this case.

I see this argument about pensions as the end of a long and, for some, very uncomfortable debate about how to balance the public interest against the reasonable expectations of those who have chosen to serve as members of the judiciary. I have been only on the fringes of these debates, but I wish to pay tribute to all those members of the Bar and the judiciary who have contributed to it, spending many hours, in many cases, in doing so.

The other thing that the Bill seeks to do—I follow the noble and learned Lord, Lord Mackay, and my noble and learned friends Lord Woolf and Lord Brown of Eaton-under-Heywood in welcoming this—is the reduction of the judicial retirement age to 70. The noble and learned Lord, Lord Mackay of Clashfern, may remember that some argued that it should be reduced to 65, but that step was fortunately not taken. But it was to overlook the benefits that come with experience.

I was one of those members of the newly formed UK Supreme Court who was able to continue to the age of 75. We tried very hard to persuade the then Government that that age should be retained for the Supreme Court justices—but without success. We pointed out that the new age limit would severely limit the time that some of our newer members could contribute to the work of our court, as was indeed the case, and that the rapid turnover that it would lead to was undesirable.

I noted with great care what my noble and learned friend Lord Etherton said about this, and his suggestion that there should be a phased increase in the retirement age. Perhaps I may continue for a moment or two to reply. The problem we have with legislation of this kind is that often one has only one opportunity. This is an opportunity that may not recur, and there will be consequences whatever happens. I give one example, which is now in the past: my noble and learned friend Lord Neuberger, who became president in 2012, had to retire in 2017, just before his 70th birthday, when he was still very much at the height of his powers. He was succeeded by my noble and learned friend Lady Hale of Richmond, who was already 70—but, because she had been appointed to the judiciary before the change, she could go on until she was 75. One can only guess at what might have happened if the change had been made before my noble and learned friend Lord Neuberger was due to retire.

There is just one other anomaly. There were different retirement ages depending on which part of the judiciary you were serving in. This Bill produces a single retirement age for everybody. As one who had to grapple with complaints about the differences in retirement age and the opportunities for service after retirement when I was Lord President of the Court of Session in Scotland, I very much welcome the uniform approach that this Bill now takes.