Pensions Bill [HL]

Lord McAvoy Excerpts

Tuesday 15th March 2011 Grand Committee

[Lord Falconer of Thoroton]

I apologise for rising again, but I should have made a declaration of interest; I made it at Second Reading but I should make it here, too. I was Lord Chancellor—I do not know whether anyone noticed—and therefore am covered by the judicial pension arrangements. However, none of this would affect me. Secondly and separately, I have close relatives who in future might be affected by this. I apologise profusely to the Committee for not making that declaration before. I also apologise if I have to leave before the end of the Front-Bench speeches. I hope that I will be able to hear them but I am also supposed to be in the main Chamber for the Fixed-term Parliaments Bill.

[Lord McAvoy]

My Lords, I rise as a former Unite shop steward to come to the rescue of my trade union colleagues among the legal fraternity. I am impressed by the campaign launched by my fraternal trade union colleagues. The noble and learned Lord, Lord Mackay of Clashfern, would have made a wonderful shop steward in Unite.

I started off by listening to the point, the sums and the principle. I am sure that it was not organised, but the turnout of legal colleagues had perhaps a whiff of vested interests about it—legitimate vested interests, but vested interests nevertheless. The more that I listened and thought about it, though, the more I thought that there is a trade union principle involved in this that has led me to support the amendment. That principle is that when you come to an agreement with your employer, it should not be changed in this manner. I hope that my saying this does not result in any more furniture being damaged but there is a principle here, a wonderful trade union principle, and I am delighted to be able to support my comrades.

[Lord McKenzie of Luton]

My Lords, I was going to be simply in listening mode on this, awaiting the wisdom of the Minister, with a few questions that may or may not be helpful but with a few comments as well.

I shall start with a point that I raised with my noble and learned friend Lord Falconer just before our proceedings about the precise wording of the amendment. We would not be happy with anything that linked any change to the CPI. We are having a broader debate about that switch and there is an issue, were there to be progress on putting in place a structure like this, about whether that should be linked to some sort of price base or to factors relating to longevity. That is a point of detail.

What we have in the Bill is a framework opportunity. The Minister can tell us about what specifically is currently proposed in respect of that. Can he say anything about the process of making regulations? The Bill just says:

“The appropriate Minister may, by regulations made with the concurrence of the Treasury, make provision”.

Is it envisaged that there would be some parliamentary process attached to that? Yes; he is nodding. I would hope that there would be, but how would that proceed? The point about any changes to the pension arrangements possibly being a slippery slope to undermining the judiciary is one that we need to be mindful of. I accept that, although we do not need to see it as the overriding point. If changes were to be a sort of Trojan horse, though, we would all deplore that.

I was going to raise the issue that the noble Lord, Lord Stoneham, raised—he made the point very effectively—about what counts as a diminution in the terms of service of a member of the judiciary in circumstances where the benefit of the pension, because of longevity, is actually increasing. There is a point there that needs to be answered. I can see that that itself creates difficulties. If you have a judge who has served for 20 years, longevity projections 20 years ago would have been quite different from what they are now; if you have someone who is new in post, that is potentially a different issue. That is a reasonable point. If you are looking at a reduction in someone’s terms of service, if you have a component that is improving in terms of the value of the pension, could you, at least in theory, net them off?

The movers of the amendment seem to have accepted the principle of some change to the pension arrangements because it would relate to new appointments. I wonder whether there are issues about what it would mean for a profession where you basically have two different sets of terms and conditions. Is that a particularly healthy position to end up in?

I wonder whether in all of this there is some sort of process of discussion to try to reach agreement on the way forward which current members of the judiciary would feel comfortable with; or will it always be the position whereby current judges will simply put up the shutters and say, “We don’t have to do this because we have a contract that says you can’t do it”—if that is what the contract says? As has been said, across the public sector people are taking pay cuts and facing large-scale redundancies and increases in contributions to their pensions, and it seems difficult for the judiciary, notwithstanding the constitutional arguments, potentially to be seen as standing aside from that. We should be eternally thankful for our judiciary in this country; they have a quality and integrity, and the public generally support them. However, is there not a risk that if you hold out on this, the trust and standing of judges might be undermined?

I have another point on which I should caution noble and learned Lords, although I hesitate to do so. I accept entirely the argument that judges have given up high-flying careers and high earnings because they want to put something back. That is a motivating force. However, you could say that equally of many others in the public sector. In our schools, how many first-rate, first-class teachers have given up or never pursued high-flying careers in the City because they had a passion, wanted to teach and put something back? I am sure that that is true in respect of the judiciary, but I caution against advancing that as part of the noble and learned Lord’s argument.

Does the Minister accept that the amendment would break the contract arrangements for existing judges, because that is the bone of contention here? Is that not the slippery slope towards undermining the independence of the judiciary? If he does not accept that analysis, it would helpful if he explained, from the Government’s point of view, why he does not. If we are in an environment where it is accepted, because we are all in this together, that there should be provision for new judges to make a contribution, it would be entirely reasonable for those provisions to be constrained in terms of how they might be used so that the floodgates are not opened with a fear that the measures could be used arbitrarily. I am sure that all sorts of legal remedies could be advanced, should the Government seek to do that. However, some sort of constraint would not be unreasonable.

Is there not, in all of this, some process for trying to achieve agreement with existing judges to participate and come into the fold on some basis, rather than have this stand-off and all the negative connotations that that entails? I should be interested to hear the Minister’s responses.