Superannuation Bill

Baroness Drake Excerpts

Tuesday 26th October 2010 Lords Chamber

[Baroness Drake]

My Lords, continuing the constructive approach adopted by my noble friend Lord McKenzie, it is understood that the Civil Service Compensation Scheme needs to be reformed to strike a fair balance between the taxpayer and the legitimate expectations of civil servants and that the Government must have authority to act on behalf of the taxpayer. But the reform needs to meet four criteria: be fair in its level of compensation consistent with the actions of a good employer; show sensitivity and understanding in the manner of its introduction; be the product of meaningful consultation and negotiation; and provide protection for the lowest paid. All these criteria are consistent with good HR practice of a good employer or large company in the private sector.

However, the Bill as drafted fails to meet those standards. In determining the process for changing the Civil Service Compensation Scheme, a process which should have integrity over the long term, it is not necessary for the Government to give themselves unbridled powers. Compelling a change should be a course of last resort not an action of first resort, which the current draft of the Bill allows and facilitates. The Bill should give clear recognition of the need to change to be preceded by meaningful consultation and negotiation. As drafted, it fails to do that. The Bill should provide for safeguards to be put in place to ensure a fair and transparent process for change to take place. As drafted, it fails to do that. Such safeguards need to strike the right balance between the powers of the Government, the involvement of Parliament and the engagement of trade unions. I fear that the Bill as currently drafted does not achieve an equitable balance. When considering Clause 1 of the Bill, I urge the Government to make it clear that proper consultation and negotiation must take place before changes are put into effect. If the Government do not explicitly support effective consultation processes in the treatment of their own civil servants, it sets a poor benchmark for other employers to follow.

Clause 2 seeks to impose caps on the level of compensation which, in my view, are punitive and unfair and far below what constitutes fair and reasonable. That is particularly so when considered against the extent of the movement from the current scheme provisions. There is no necessity for such compensation caps to be in the Bill. As the Government themselves have conceded, these caps are not intended as a long-term replacement scheme. As such, they can be interpreted only as intending to provide the Government with a negotiating tool. The very inclusion of sunrise and sunset clauses in the Bill is confirmation of that opinion. When the Bill seeks to secure the Government's authority to change the terms of the Civil Service Compensation Scheme, it is not then necessary to have these caps laid out in the Bill in the way that they are, precisely because that authority would have been secured, making those caps unnecessary. Furthermore, if those caps ever took effect, the protection offered for the lowest paid is weakened and could produce perverse incentives to select lower-paid staff for redundancy.

It is all too frequent in difficult economic circumstances to observe popular calls for scapegoats and in that vein to demonise civil servants as overprivileged and overindulged. That is unfair and unfounded. The vast majority of civil servants are hard-working, conscientious employees, who come to work to do a good job and are motivated to deliver in the interests of the citizens of this country. The efficient discharge of their functions is an essential component of our democratic structures and delivery mechanisms. Civil servants are not just a set of numbers, but ordinary people who have children to raise, rent to pay, bills to meet, and in common with many private sector workers, feel increasingly insecure about job losses and employment.

Half a million civil servants are covered by this scheme. How change to the compensation scheme is managed will influence their morale and motivation. I welcome the articulation of the Government’s commitment to meaningful consultation by the noble Lord, Lord Wallace, but urge the Government, in securing the process for and the change to the compensation scheme, clearly to recognise in the Bill itself the importance of due process, consultation and negotiation before change is effected both in the short term and over the long term, and to remove the caps, which are both unfair and unnecessary.