Pensions Bill [HL]

Lord Mackay of Clashfern Excerpts

Tuesday 15th February 2011 Lords Chamber

[Lord Mackay of Clashfern]

My Lords, I have listened to many fine speeches on the Bill. I congratulate my noble friend on the way in which he opened for the Government and the noble Baroness, Lady Drake, on the way in which she opened for the Opposition—very clearly and very plainly. If anything is plain it is that this Bill faces huge difficulties. Some of these have been highlighted very clearly this evening. It is very good for us to have the opportunity of hearing these problems because the problems that confront the Government in this area are extremely great and very difficult to cope with. A suggestion, which occurs to me as attractive, is the one which would join a substantial increase in the state pension with these changes. That may or may not be easy. I must declare an interest in the Bill as a former Lord Chancellor, a former Lord of Appeal in Ordinary, a former judge of the Supreme Court of Scotland and a current state pensioner. As I understand the Bill, it does not affect me financially in any way whatever.

It is about 18 years since I introduced the Judicial Pensions and Retirement Bill to this House. The days between its introduction and its enactment were not the happiest of my life. The principle that a serving judge shall not have his terms of service adversely affected without his consent during his term of service is a fundamental principle, part of the rule of law and internationally recognised. It has been followed by Governments in this country, so far as I know, as far back as I can tell. When I came to introduce the Bill to which I have just referred, I made it plain that it did not affect serving judges. Those who were already serving judges were not affected by the Bill, which was introduced in 1992 and passed in 1993, except that they were given an option to enter the new scheme if they wished, and some did so.

However, serving judges were not affected in any way. The reason for that was not because the Government did not want to change things quickly—I remember one of my colleagues saying that we would have to wait a long time before the pension provisions in the Bill took effect. The Government wanted to see change immediately—there is a certain aspect of that in politics which perhaps we should try to resist—but the Bill did not affect any of the serving judges, many of whom were not old; it affected only those who were appointed after it became law. That is fundamental and requires to be observed in this Bill.

The truth is that the newly appointed judiciary has quite a high turnover. It does not take all that long—although longer than my colleague would have liked—for the new regime to come completely into effect. There are some, but very few, existing judges who are under the 1981 system.

The noble and learned Lord, Lord Falconer of Thoroton, referred to aspects of this provision which are enacted. I think that he referred to the Supreme Court Act. He himself changed the title of that Act to the Senior Courts Act, but the statutory reference is perfectly plain, because when we had a new Supreme Court we had, needless to say, to change the title of the old one.

As I said, that was the provision that we made, and I believe that it is the right one. The question about what happens to new judiciary is of course not trammelled in any way by that. The noble and learned Lords, Lord Woolf and Lord Falconer, referred to the considerations that apply to that. I cannot get into that, because that is the area where I suffered a lot in 1993, when I was told that if the new regime of 20 years instead of 15 was introduced, we would not get any judges at all, or the ones that we would get would be people who were not worth having. That is perhaps a slight exaggeration of the way it was put, but it was put very strongly, I can tell you, and lasted for quite a while. The fact is that it did not adversely affect recruitment—at least, not as much as was suggested; I think not at all, but that is my view of the matter.

If that fundamental principle is to be observed, as the noble and learned Lord, Lord Falconer of Thoroton, said, it is necessary to restrict the operation of Clause 24, which makes an insertion after Section 9 of the Act, to those who are appointed after the Bill comes into effect.

The second point made by the noble and learned Lord, Lord Falconer of Thoroton, was about the contributions to be required of the more recently appointed judges. I do not think that it would be right to allow the Executive to increase them by order, but we could well have a formula set out in the statute which increased them—for example, in relation to the indices presently in question which concern how pensions are uprated. Some such statutory formula would be open. As I said, there would be a question about the effect on recruitment, but that is an open question on which people could have very different views.

That is all I want to say; it is a very simple point and the only one I really want to make. I think that it is a sound point that the law—the constitution of our country—requires that, once a judge has become a serving judge, his terms of service cannot be altered adversely to him without his consent. To give effect to that in the Bill would require a minor amendment—a small amendment in its scope—but an important one.

My attention has been drawn to some other problems about additional voluntary contributions and so on, but those are very subsidiary. I want to stick on the principle, which I think is an extremely sound one. My noble friend Lady Noakes says that I should not listen to the lobbying of the judiciary and must not cave in to it. I am not listening to the lobbying of the judiciary; I am applying a principle which we applied when we put our Bill in place and which I believe should be respected today.