Defence Police and Fire Pensions

Alan Reid Excerpts

Tuesday 26th November 2013 Commons Chamber

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

I thank Mr Speaker for granting me tonight’s debate. I want to express my thanks to Mr Eamon Keating of the Defence Police Federation and to Dave Kirby of the defence fire and rescue section of Unite for their help in preparing for this debate.

Many of my constituents work as police officers and firefighters at the naval bases of Faslane and Coulport. They are a dedicated and skilled work force. However, they have been caught out by what I believe is an anomaly in the Public Service Pensions Act 2013. The anomaly arose because defence police and fire personnel have traditionally been on civil service terms and conditions rather than on conditions comparable with the country’s other police and fire services. As they are on civil service terms and conditions, their retirement age had been 60.

The previous Government imposed a pension settlement, which meant that new recruits to the defence police and fire services have a retirement age of 65. However, efficiency savings have meant that very few recruits have joined those services since then and more than 90% of the current work force have a retirement age of 60. Those who have a retirement age of 65 tend to be younger people who have joined recently, so it is unlikely that there is anybody over 60 working at the moment.

The present Government inherited that situation. The unique circumstances of the defence police and fire personnel were then overlooked by Lord Hutton when he prepared his report on public service pensions.

Through the medium of the Public Service Pensions Act, the Government have faithfully implemented Lord Hutton’s recommendations, one of which was that those in occupations for which the normal pension age had traditionally been under 60 should have a normal retirement age of 60. That applies to the uniformed services: the armed forces and all police and fire services except those in the Ministry of Defence.

However, Lord Hutton has subsequently said that he was not aware of the unique circumstances of the defence police and fire personnel when he compiled his report. He added that had he been aware, he would have recommended that they be treated the same as the other uniformed services, with a retirement age of 60. I hope the Government will take on board Lord Hutton’s admission that he made a mistake.

The Public Service Pensions Act implements Lord Hutton’s recommendation of a retirement age equal to the state pension age for public sector workers other than the exceptions already mentioned. That means a retirement age of 65 rising over time to 68. My understanding is that the Government have already agreed that the retirement age for defence police and firefighters will not rise above 65 when the state pension age does. I would be grateful if the Minister could confirm that tonight.

The number of personnel involved is very small—about 3,500 in total out of a civil service work force of about 700,000. Defence police and firefighters do a vital job that involves putting themselves in dangerous situations and requires a high degree of fitness. Fighting a fire on a vessel at sea requires a person to be extremely fit and also extremely quick thinking. The same degree of fitness is required for police officers who have to wear body armour and carry a heavy weapon.

[David Wright (Telford) (Lab)]

Obviously, there are similar personnel in areas such as Telford, where there is a large MOD footprint. Does the hon. Gentleman agree that what we need for this group of people who do a great job for our country, often in difficult circumstances, is a pretty comprehensive review of their terms and conditions? I hope to hear the Government’s view tonight, but a future armed forces Bill might pick up on this issue and consider these workers’ terms and conditions as well as their status. I believe that they deserve a very high status indeed.

[Mr Reid]

I agree with the hon. Gentleman that these workers deserve a high status. The review I shall talk about later is of pensions and the retirement age, but I certainly agree and hope that this Government or a future Government will conduct a wholesale review of those people’s terms and conditions.

Like all other uniformed services, defence firefighters and police have to be ready to go instantly from a state of rest to 100% alertness and high physical exertion. That puts a heavy strain on the body and, as someone nearing 60, I know that we all have to accept that age takes its toll on us.

What makes the uniformed services different from workers in manual jobs is the need to go instantly to a 100% level of alertness and effort. Many other manual jobs involve hard work, but it tends to be done at a steady rate over several hours, whereas the uniformed services have to go to their 100% physical and mental peak immediately.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

The hon. Gentleman will be aware that I, too, represent MOD police in my constituency. They do a job that requires them not only to be fit and alert at times of crisis but to keep up arduous standards of fitness in preparation for any eventuality. The key issue is that it is often a false economy to keep people working beyond the peak of their physical fitness. If they have to leave work owing to ill health, that can be more expensive in the long run.

[Mr Reid]

The hon. Lady is perfectly correct. I shall talk about that aspect of the problem later. She is right that the defence police and fire personnel need a high level of fitness or they will be forced to take early retirement. That question leads me nicely on to the next part of my speech because I want to draw the House’s attention to a report produced for the Ministry of Defence by Dr P. Griffin, a consultant adviser in occupational medicine. The report makes it clear that a person’s ability to function at peak physical and mental alertness declines once they are over 60. I hope that the Government will take that report into account during their review.

Defence police and firefighters have to undertake regular fitness checks and demonstrate a high degree of fitness. I am concerned that if they have to work beyond 60, many of them will fail those tests before they reach the normal retirement age. Having a high proportion of personnel retire early on health grounds is no way to manage vital services such as policing and firefighting.

During the later stages of the Public Service Pensions Bill, I was pleased that the Government gave an undertaking to review the effects of defence police and fire fighters working until 65. That undertaking became section 36 of the Public Service Pensions Act, and I want some answers to questions I shall put to the Minister tonight.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

Will the hon. Gentleman give way?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. This is an Adjournment debate. Opposition Front-Bench Members cannot intervene from the Dispatch Box in an Adjournment debate. Interventions can be taken from Back Benchers.

[Mr Reid]

The review is to be presented to Parliament no later than 24 December, so time is short. The report will look at the impact of the Public Service Pensions Act 2013 on the health and well-being of defence police and firefighters, and at the ability of those over 60 to meet the strict fitness requirements that are needed for the important and dangerous job that they do. The report will also consider the consequences of early retirement for workers who are forced to retire early on health grounds because they cannot meet the stringent fitness requirements. It will also look at the likely cost to the taxpayer.

If the retirement age is 65 and significant numbers of personnel are forced to retire early on health grounds, both the taxpayer and the worker will lose out. The worker will lose out because they will not get the full pension that they expected; the taxpayer will lose out because the amount that has been paid into the pension pot will not cover the cost of the pension if it is paid out early.

[John McDonnell (Hayes and Harlington) (Lab)]

The hon. Gentleman may recall the debate on the Bill; I was party to it as well. The impression that Ministers gave then was that this category of workers was an anomaly that had not been dealt with in the legislation. There was cross-party anxiety about this issue. I think that the hon. Gentleman will agree with me that, to get the legislation through, the Government gave the impression that this group of workers would be treated fairly and consistently with others working in this field, which meant that they would not be expected to work longer because of the physical capacity problems they would experience.

[Mr Reid]

I remember the hon. Gentleman’s contribution to the debate on Lords amendments. In response to the concerns expressed by hon. Members on both sides of the House, the Government tabled a new clause which became section 36 of the Act, which set up the review that we are now discussing. I hope and expect that that review will recommend an age of 60, for all the reasons that I have given and some that I shall go on to explain. I hope that the review will make that recommendation. If it does, I will certainly expect the Government to accept the outcome.

[John McDonnell]

Perhaps I can make the point more clearly. I think that the passage of the Bill was secured only because of those assurances. There was such strength of feeling across the House and across parties about this group of workers in particular that others would have objected to the Bill overall if the new clause had not been inserted and if assurances had not been given that this group of workers would be treated sympathetically.

[Mr Reid]

My expectation was that the review would recommend a retirement age of 60, and that the Government would accept it, and that is what I hope will happen.

I simply do not believe that it would be right for these workers to work beyond 60. The most appropriate comparison is with other firefighters and police officers. Members of all the other fire services and police services in the country are allowed to retire at 60 under the provisions of section 10 of the Public Service Pensions Act. Those staff whose pension conditions are being investigated by the review have important knowledge about their jobs, so I hope that the review team is consulting them. People who are actually doing the job can give information that no one else can so it is important that they are consulted.

I have some questions which I hope the Minister will be able to answer tonight. What consultation have the Government had with the work force representatives—the Defence Police Federation and the defence fire and rescue services section of Unite? What further consultation will be held with these representative bodies before the review report is completed? Will the Minister confirm that they will be able to see a draft before final publication and feed their views into the process?

Another important question for the Minister is whether the publication of the review will be the final word, or the basis for further consultation and negotiation. What research has been carried out to establish whether people over 60 are likely to have the fitness required to carry out the duties of defence police and firefighters without long absences from work, and what proportion would be likely to retire early on health grounds before reaching the age of 65 because they did not meet the stringent fitness requirements?

[David Wright]

I strongly support the hon. Gentleman. This is not just about fighting those fires that have an impact only on bases. He will be aware that in Telford and Wrekin a few decades ago, there was a huge fire at MOD Donnington, which affected the entire community around that base. It is in the public interest to ensure that those on MOD bases who have to fight fires are capable of doing so in the most efficient way.

[Mr Reid]

Yes, and I certainly remember the fire that the hon. Gentleman refers to; it was in all the news media. He is perfectly correct: this is a vital job. In Faslane in my constituency, there are nuclear submarines. We are talking about a very strenuous and highly skilled job and one that is very important, not just because of the assets on the base but for the general public.

Unite has supplied figures that are specific to age-banding and to ailments including those involving the heart, strokes and blood pressure, muscle and bone, and anxiety and depression. It also looked at long-term sickness over a 24-month period. It obtained those figures from medical and absence data provided by Defence Business Services, and has asked for the inclusion of those figures in the report. Will Unite’s figures be taken into account when the report is compiled? What plans do the Government have for a balanced, fair and equal retirement strategy for those individuals who may not be able to maintain the stringent fitness requirements?

The civil service pension scheme historically had a lower employee contribution than police and fire service pension schemes, so defence police and fire service workers had net pay deductions and abatements taken off their pay in an attempt to give parity with other police and fire services. However, the impact of these deductions has been that the defence firefighters’ pension is based on net pay after those deductions, rather than on their gross pay. Other police and fire service staff receive a pension based on their gross pay before employee superannuation payments are deducted. An actuary engaged by the Defence Police Federation has said that the abatement and net pay deduction system is antiquated and very unfair. There may have been a logic to the system when it was introduced 30-odd years ago, but over time it has become antiquated. I hope that that will be looked into as part of the review.

If defence police and firefighters have to work on beyond 60, they will be contributing more towards their pension and collecting it for less time than their colleagues in other police forces and fire services. I hope that the Government agree that there should be parity, in pension terms, between defence police and firefighters and those who come under the remit of other Government Departments and the devolved Administrations. In addition to investigating whether people over 60 are likely to be physically fit enough to carry out policing and firefighting duties, the review should look at levels of abatement of pay and net pay deductions. In that regard, I draw the House’s attention to what was said during the final debate on the Public Service Pensions Bill on 24 April by the hon. Member for Bromsgrove (Sajid Javid), then Economic Secretary to the Treasury, and now Financial Secretary to the Treasury:

“I agree that abatement, which the hon. Member for Nottingham East and my right hon. Friend the Member for Bermondsey and Old Southwark raised, is an important issue. It is therefore important that the MOD review considers it. It will have to consider a broad range of issues affecting the workers in question, including all pay and remuneration conditions and other potential benefits. It will have to examine the matter in its totality, and I would expect nothing else.”—[Official Report, 24 April 2013; Vol. 561, c. 912.]

I hope that the Minister can tell us tonight about that aspect of the review. Pensions calculations are notoriously complex, and I would ask that as well as a recommendation in the review on the level of employee superannuation contributions, all the calculations behind this recommendation be published for checking and comment.

Defence police and firefighters do an extremely important and strenuous job. I simply do not think it is right that they should be asked to continue doing it beyond 60. Sixty-five-year-olds should not be fighting fires or tackling terrorists. I draw the attention of the House to what was said by Phil Salt, the chief fire officer of the Defence Fire Risk Management Organisation, who is on record as fully backing a retirement age of 60. I understand that senior officers in the Ministry of Defence police share this view.

Police, fire and rescue personnel working in the Ministry of Defence should be allowed to retire at the same age as their counterparts in the country’s other police and fire services. I hope that that will be the outcome of the review and I look forward to the Minister’s answers.

--- Later in debate ---

[Anna Soubry]

I see no reason why not, so I am more than happy to do so. I should have explained, as I often do in these debates, that if I do not answer the various matters raised by hon. Members in the course of my speech, I will write to them.

[Mr Reid]

My hon. Friend said that there were discussions with the trade unions. For clarification, the Defence Police Federation has reminded me that it is a professional association, not a trade union. I just wanted to check whether it had been consulted along with the trade unions.

[Anna Soubry]

I am so sorry—this is entirely my fault, because I was specifically briefed on that—but I have completely forgotten the answer to that question. I am grateful to my hon. Friend for rightly raising that point about the Defence Police Federation. I know that there is an answer to his question, and it might be provided to me in the course of my speech. If it is not, I undertake to put it all in the Library. There is no difficulty at all in doing that.

I will now turn to the specific points my hon. Friend raised. I thank him for providing a copy of his speech, which is so helpful in these circumstances. I fear that I will be unable to answer all his questions, because of the short time available to us. The MOD will review the levels of abatement of pay and net pay deductions as part of the continuing and wider work into the terms and conditions of service and the future of both the MDP and the defence fire and rescue service. It is as part of that work that we are reviewing pension calculations.

We are also reviewing all pay and remuneration conditions and other potential benefits. For the purposes of that report, the Defence Secretary directed that the review should concentrate on the questions posed by the Act. As I have already stated, a separate continuing review is looking at the broader issues. The Department has engaged with the Defence Police Federation—I think that that answers my hon. Friend’s question—and the defence fire and rescue service section of Unite. Engagement with the federation has been through the quarterly police committee, the monthly Ministry of Defence police management board, and regular meetings in respect of the separate terms and conditions of service review.

Unite was briefed by relevant business units at the outset of the review. It has been engaged in agreeing the statement of requirement that, as I explained, was submitted to the Government Actuary’s Department, and it was invited to attend workshops and make separate submissions to the review as it has progressed. Unite is fully aware of the business units’ conclusions, and its concerns and points of view have been considered by the review. The reports due to be laid in the House—I will give the dates in a moment—will form part of the continuing discussions regarding future changes to the terms and conditions of both groups, including their pension age. I am reliably informed that staff representatives will have a copy of the report before it is published, and that is an eminently sensible idea.