Restriction of Public Sector Exit Payments Regulations 2020

Lord McCrea of Magherafelt and Cookstown Excerpts

Wednesday 23rd September 2020 Lords Chamber

[Lord McCrea of Magherafelt and Cookstown (DUP) [V]]

My Lords, although I recognise that these regulations will not apply in Northern Ireland, the fact that devolved policy on public pensions and compensation is broadly benchmarked against terms in GB means that they remain of clear relevance to employers and employees in the Province.

I agree with the Government that it is important that public sector exit payments are proportionate and fair to the taxpayer. There has been an increasing number of six-figure sums paid out that exceed three times the average annual salary. However, at the same time, I would not favour a blanket cap that fails to allow circumstances to be considered on a case-by-case basis. The safeguards built into this legislation to waive the cap in cases of illness, death and statutory redundancy pay, for instance, are therefore positive.

The role of exit payments is vital to an employer’s ability to make reforms and broaden the skills and talent base for the future. The use of exit payments as part of early retirement arrangements often incentivises young people to enter a specialism where there will be gaps in the skill base in the future. I think, for example, of the previous scheme for mental health nurses in Northern Ireland, which allows those who entered the scheme several decades ago to retire at 55 without detriment. This positive role that exit payments can play should be retained, albeit with a recognition that we need to balance it against the interests of the public purse.

It is important that those whose early retirement could be disrupted by these arrangements are not disadvantaged by being unable to re-enter the workforce to apply their skills to temporary roles in our hospitals and schools that desperately need to be filled —although without, of course, taking jobs from young people who desire full-time employment. We need to see a close and regular review of the impacts of the regulations. Back in Northern Ireland, it will be important for local Ministers to review the changes in England to ensure that public sector roles and payments in Northern Ireland are both competitive and fair.