Restriction of Public Sector Exit Payments Regulations 2020

Baroness Bakewell of Hardington Mandeville Excerpts

Wednesday 23rd September 2020 Lords Chamber

[Baroness Bakewell of Hardington Mandeville (LD)]

My Lords, I declare my interest as a vice-president of the Local Government Association. I have briefings from the LGA, the Association of Local Authority Chief Executives and the BMA. All have the same concern—that lower-paid staff will be adversely affected. 

The Government’s aim to reduce the large redundancy payments made to highly paid staff in the public sector is one to which the public readily subscribe. But the way the Government are implementing this not only breaks the law but affects those on lower pay. 

The pension strain payments should not be included in the cap. In 2019, ALACE indicated that including pension strain would affect long-serving staff earning well under £40,000. For these staff in their mid to late-50s, with service between of 35 and 39 years, earning between £31,000 and £34,000, the strain would exceed £100,000 if made redundant. Their redundancy payments would be well under £20,000. The regulations would mean that they would all suffer a reduced pension for the rest of their lives. I ask the Minister to confirm that this is, indeed, the case. 

Junior doctors are similarly affected, in some cases having to make declarations for sums as small as £200. These are the very people who, up and down the country, are currently saving lives on the Covid-19 wards. 

 What the Government are proposing is for contractual arrangements between employers and employees to be broken and for those on very low earnings to be penalised. For local authorities, this is direct interference with the role and responsibility of elected councillors, who are well able to deal with these matters through full council. Instead, it will be dealt with by the Secretary of State. 

 This is at a time when MHCLG, as the Minister said, is currently conducting a consultation on the Local Government Pension Scheme. The regulations under this SI are due to come in immediately, well before the consultation on the LGPS has finished. It would seem that the right hand of government does not understand what the left hand is doing. 

 In addition to there being little communication between government departments, no equality impact assessment has been produced. Why not? Are the Government afraid that, if they produce one, it will be obvious that the bread-and-butter staff of public service are being caught in this trap?

However, I note that the Armed Forces and security services are exempt from this regulation. “Good,” many will say, “our service men and women deserve to be exempt”. But what of the rear admirals, air vice-marshals and lieutenant-generals, in cushy jobs at the Ministry of Defence, earning £120,000 to £150,000? Surely, they should not be exempt. The Government have got this wrong and should realise such and withdraw this SI.