Pension Schemes Bill

Debate between Lord Moynihan of Chelsea and Lord Davies of Brixton

Committee stage
Monday 23rd February 2026 Grand Committee

[Lord Davies of Brixton (Lab)]

I am glad that we are having this debate now, but only as a taster for a proper debate at a proper time—I am quite surprised that the clerks accepted this amendment as being within the scope of the Bill. I have no objection to a debate on public service pensions; I encourage one. I feel totally comfortable with having a debate on public service pensions, because I think they are eminently defendable. I accept very little of what the noble Lord has said, and the doom and the gloom that has been expressed, and a proper opportunity to have that debate would be very welcome, but I shall focus on the need for a review.

Of course, as we have been told, my noble friend Lord Hutton of Furness undertook an independent review of public service pensions in 2010-11. That review was established by the coalition Government; they set it up, they accepted its recommendations and they gave a guarantee. In a Written Statement on 20 December 2011 about Civil Service pension arrangements, the noble Lord, Lord Maude of Horsham, who was then an MP and Minister for the Cabinet Office, gave

“a guarantee, outside of the scheme designs parameters”—

that is what the benefits were—

“of no further reform for the next 25 years”

I do not know what people think a guarantee means, but to me it means no more changes for 25 years. Of course, the Statement was repeated in your Lordships’ House and the noble Lord, Lord Wallace of Saltaire, repeating the Statement, also gave a guarantee for the next 25 years. I mentioned to both noble Lords that I would be quoting their words in this debate, and it would be worth asking them what they think the word “guarantee” means. A guarantee was given to public service workers as part of their terms and conditions of employment. It was not just a policy objective; it was part of their terms and conditions of employment. I think that to make changes without breaking the guarantee would be an extremely bad approach to the settlement.

I agree with very little of what was said criticising public service pensions, but I think there is a need specifically to understand the arrangements. First, retirement age will increase in line with state pension age. That is an adjustment mechanism. The more important adjustment mechanism is that there is a cap on employer costs, and it is members who stand the risk of having their benefits cut if the cost escalates. None of that was reflected in the remarks made so far. That cap, as has been explained, is calculated using a discount rate, and that discount rate is determined in a way that adjusts for economic changes. As mentioned, a higher discount rate reduces the cost of future benefits. At the same time, a lower discount rate increases the cost of benefits. If the cost of benefits increases, as part of the settlement that was reached, members’ benefits have to be cut or their contributions increased. That is the nature of the settlement that was reached in 2011. I think it is totally wrong to mislead the Committee about the nature of the deal that was done. Am I allowed to say “mislead”?

[Lord Moynihan of Chelsea (Con)]

I hope the noble Lord will withdraw that word. I do not recognise what he is saying. My noble friend was talking about the NHS. Was it NHS workers who were required to put in that extra money?

[Lord Davies of Brixton (Lab)]

It is interesting. I thank the noble Lord for his intervention. Okay, I withdraw the word “mislead” and I apologise for using it, but the full picture was not given to members of the Committee about the nature of the public service pension arrangements. Member contributions are adjusted and have been adjusted because of increasing costs. In fact, at the valuation before last, because of the way the economic indicators work, the cost actually fell, and the last Government had to push through urgent legislation in order to stop members’ benefits being increased. I will not use the word “fiddle”, but the terms were adjusted to protect the employer rather than giving additional benefits to members, so if anyone has a complaint about the way this system has worked, it is the members, even before we get to the problem of the 10-year guarantee that arose.

As I said, I would welcome the opportunity of a proper debate defending the way in which public service pensions are provided in accordance with the Hutton report as agreed by the coalition between the Conservatives and the Liberal Democrats. The one thing on which I agree with the noble Lord is that we need pension arrangements in which we are all together. I agree totally. Given that the underlying question is what sort of incomes we want people to have in retirement and whether we want them to be adequate, I think the objective should be to offer people in the private sector the opportunity to accrue pensions on the same terms as those provided to people in public service. I will be setting that all out in my submission to the Pensions Commission.

Employment Rights Bill

Debate between Lord Moynihan of Chelsea and Lord Davies of Brixton

Report stage
Monday 21st July 2025 Lords Chamber

[Lord Moynihan of Chelsea (Con)]

Noble Lords should read the Bill. Payments will be made if the Central Arbitration Committee decides that a request to meet was unfairly refused. I checked it all this afternoon. I did not really expect noble Lords to challenge me on it.

[Lord Davies of Brixton (Lab)]

I think the reaction from noble Lords was to the use of the word “Orwellian”. No one is questioning the facts; it is the suggestion that a central arbitration commission is Orwellian.

[Lord Moynihan of Chelsea (Con)]

My Lords, a central arbitration commission might not be Orwellian but I feel that a Central Arbitration “Committee” is. We can agree to disagree on that, but the word “committee” is in the actual name.

Imagine how all this will be taken by the neck on which this regulatory boot is going to be placed by the Bill. All my amendment does is suggest some small limit to when a trade union might announce the date on which it wishes to meet its members. That would provide a proper, proportionate and fair way of giving both sides, company and union, what they need. Indeed, the delay would actually help the union, by allowing it to find a time when more staff were present for the mooted meeting.

The Bill gives the union three months in which to complain if management refuse the proposed time to meet. Surely if three months can be given to the union, two days is not too much to ask for the employer to consider any such request.