Superannuation Bill

Alan Reid Excerpts

Tuesday 7th September 2010 Commons Chamber

[Mr Maude]

My hon. Friend is exactly right and puts his finger on an important point. Because it is so disproportionately expensive under the current scheme to make redundant long-serving and high-paid civil servants, instead of one civil servant who earns 10 times the average—there are some—losing their job, 10 or more lower-paid civil servants might lose their jobs to save the same amount of money. We are seeking to address exactly that issue.

[Mr Alan Reid (Argyll and Bute) (LD)]

I, too, was pleased to hear the Minister say that the Government want a scheme that will be better for the lower-paid, but the Bill does not differentiate the lower and higher paid. Will the Government seek to amend it to allow better compensation for the lower-paid?

[Mr Maude]

It is not my intention to propose amendments of that nature, because in our view such arrangements are difficult to engineer—this is tricky stuff—and are not amenable to incorporation in primary legislation. Such matters should be negotiated. It is precisely for that reason that we are engaged in a parallel process of negotiation with the Council of Civil Service Unions, which I shall talk a little about in a moment, because we are seeking to achieve two things.

--- Later in debate ---

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

We have had a good and thorough debate, with some thoughtful and powerful contributions from Members on both sides of the House, including my hon. Friends the Members for Edinburgh East (Sheila Gilmore), for Glenrothes (Lindsay Roy), for Derby North (Chris Williamson) and for North Ayrshire and Arran (Katy Clark), as well as the hon. Member for Brighton, Pavilion (Caroline Lucas).

The difficulty that we face as we prepare to vote on this issue is that the words we have heard from the Dispatch Box are very different from those that are written in the Bill. On 14 July, the Minister for the Cabinet Office set out his approach to the reform of the civil service compensation scheme. He said:

“I want to engage with the unions quickly to develop a scheme that protects the lowest paid…we need to negotiate”.

When I pressed the Minister to take the previous Government’s reform package as the starting point for those negotiations, he accepted, as he did again at the Dispatch Box this afternoon, that had

“that scheme been in existence when the coalition Government came into office, a pressing case would have been made to leave it as it was and work on that basis.”—[Official Report, 14 July 2010; Vol. 513, c. 932.]

It was a good beginning, with an acknowledgement of the merits of the previous Government’s reform package, set out in February, and a clear undertaking to protect the lowest-paid.

Unfortunately, our hopes were dimmed when this draconian Bill was published just 24 hours later, with no prior consultation with staff or the trade unions. The Minister was open and transparent about the purpose of the Bill. He said that it is not the final word. Indeed, in a phrase echoed by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), the Minister described the Bill as a “blunt instrument”. It contains a sunset clause and powers to repeal at any stage. In no sense is it a reformed scheme: it simply places a cap on the existing unreformed scheme. It means, typically, that a civil servant earning £21,000 a year who is made compulsorily redundant and who would get £63,000 under the existing scheme—and would have got £60,000 under the February 2010 scheme—will get just £21,000. Someone earning £18,000 who would have got £54,000 under the existing scheme or the February 2010 scheme, will get just £18,000.

The truth, which has been freely acknowledged by Ministers, is that the Bill is a negotiating device to ensure drastic cuts in the civil service compensation scheme. But as legislators we have to ask what will happen if those negotiations do not succeed. The Chair of the Public Administration Committee, in a thoughtful speech, warned about the dangers that might lie ahead in terms of legal challenge and delay. It is good to know that he and his Committee will keep a watchful eye on this legislation and other matters.

My hon. Friend the Member for Hayes and Harlington (John McDonnell), who chairs the PCS parliamentary group, has described this Bill as a landmine Bill, and he set out his definition of that. Whether that is true or not, there are real dangers if this Bill passes through Parliament while parallel negotiations go on outside that remain uncertain and, if unsuccessful, could create real resentment among those whom they affect.

There is no argument from my party about the need for reform. Indeed, we engaged in considerable detail in those reforms before the election. The focus of our reform was the vast majority of civil servants who do vital work on the front line of our public services. They include those who work in jobcentres trying to reconnect unemployed people with work; those who work in our prisons dealing with difficult and dangerous offenders and ensuring that our communities are safe places to live; and those who deal with tax credit claimants, ensuring that families have at least a decent minimum income on which to live. Most of those people, as we have heard from many hon. Members, work for modest rewards. Indeed, the Minister has said on several occasions that half of all civil servants earn £21,000 a year or less.

I genuinely want to give the right hon. Gentleman the benefit of the doubt—that is my starting point. I want it to be true when he keeps repeating the claim he makes in the Chamber and the media that he wants to protect the lowest-paid, but at some point those words have to turn into action, and he has to put flesh on the bones. My real concern this afternoon is that his comments have raised expectations above anything that his Government are likely or willing to deliver.

In particular, I urge the right hon. Gentleman and his ministerial colleague, the Parliamentary Secretary, Cabinet Office, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), to look again at the proposal that the previous Government agreed with five of the six trade unions, and which even now could provide a realistic, practical starting point for negotiation with all six of the unions—namely, that any civil servant on a salary of less than £20,000 a year who is made redundant would be entitled not to 12 months’ or 15 months’ salary, but to three years’ salary. Labour Members will be tabling an amendment to that effect in Committee, and I encourage the Minister to indicate this evening that he and his colleagues will, when that moment comes, show that they mean what they say when they talk about protecting the low-paid and support that amendment. At the very least, that would be a clear indication, in their discussions and negotiations with the trade unions, that they are acting in good faith and mean it when they say that they want to protect the lowest-paid.

My hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) was among a number of Members on both sides of the House who reminded us that this debate and these proposals come before us in the context of deficit reduction, so it is important to remind the House, as my right hon. Friend the Member for Dulwich and West Norwood (Tessa Jowell) made clear, that our reform package would have saved £500 million over three years. The Government have pledged that, however tough life becomes as a result of the cuts that they introduce, fairness will be the watchword. How many times have we heard that from the Government Front-Bench team? But what is fair about the regressive provisions in the Bill that mean that maximum redundancy payments mirror exactly what an individual earns? If someone earns £100,000 a year, under the terms of the Bill their payment would be £100,000. If someone earns £50,000, the payment would be £50,000. And if someone earns £20,000, it would be £20,000, not the £60,000 promised in the reform package that we negotiated and set out in February.

What is fair about a set of negotiations carried out against the backdrop of a Bill that threatens severe cuts if the trade unions do not agree to a new scheme that dramatically reduces the provisions in the civil service compensation scheme? And what can be fair, as the hon. Member for Southport (Dr Pugh) asked pointedly, about unilaterally rewriting a contract with staff, either from a moral or even perhaps a legal standpoint?

[Mr Reid]

I agree with much of what the right hon. Gentleman is saying, but surely the Labour party believes in reforming the present system, so should it not be supporting the Bill on Second Reading, moving its amendment and then voting against it on Third Reading only if that amendment fails?

[Paul Goggins]

Absolutely not. Our starting point is, and the Government’s starting point should be, the February 2010 proposals agreed by the then Government with five of the six trade unions, not this miserable backstop provision in the Bill.