Public Service Pensions Bill

Cathy Jamieson Excerpts

Tuesday 4th December 2012 Commons Chamber

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

I begin by expressing my gratitude to the Clerks and to Mr Speaker for their forbearance in ensuring that the amendment tabled in my name is debated in the most appropriate group this afternoon. That said, there is but one lonely little amendment—amendment 32, which would amend clause 16—in my name in this group. In some ways, it is a very technical and practical amendment, but it would allow for the closure of existing Scottish schemes by 1 April 2016 instead of 2015. It would put these reforms on a much more realistic time scale.

I am sure Members will be aware that the Scottish Government have devolved executive competence for a number of aspects of a number of Scottish public sector pension schemes. There have been considerable delays in establishing exactly what flexibilities are open to the Scottish Government in those areas for which they have responsibility, and it has been difficult to gain clarity over what that process might look like. That has obviously had an impact on the negotiating process.

Gaining clarity has happened in an extremely piecemeal fashion. Back in March 2012, Ministers initiated partnership negotiations with employers and trade unions about the pension schemes of the NHS, teachers, police and firefighters. On 28 March, a letter arrived from the Chief Secretary to the Treasury—I am sorry he is not with us for this debate—setting out some new constraints regarding the links between normal pension age and state pension age, which we will debate later. In May, there was more communication from the Chief Secretary, who informed the Scottish Government that they would require explicit Treasury consent for cost-sensitive changes to the teachers or the NHS schemes, and in July the Scottish Government were informed that the UK Government wanted to extend the Bill to non-departmental public bodies and Scottish judicial offices. At that stage, there was still no clarity on flexibilities relating to the pension age requirements, which everyone knows is a key sticking point in the negotiations.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I understand the hon. Lady’s point and I know that some of the trade unions have commented on the matter. Is she aware of the correspondence between the Chief Secretary to the Treasury and the Scottish Government in October, in which the Scottish Government were invited to suggest some amendments to the Bill? Is her amendment one of those that the Scottish Government suggested to the Chief Secretary or to other Ministers?

[Dr Whiteford]

I am afraid that I am not privy to the Scottish Government’s processes on this, so I cannot answer the hon. Lady’s question with any certainty whatever. What I can say is that the Scottish Government got clarity only a few weeks ago on the extent to which they can deviate from the proposals for England and Wales, and that the degree is quite limited indeed. I think the Scottish Government will have some flexibilities on accrual rates and some revaluation bases.

--- Later in debate ---

[Sheila Gilmore]

I am more than happy to do so, Madam Deputy Speaker. Perhaps we will have further debate on that topic.

If amendment 11 were agreed to, considerable and greater power would be available for the Scottish Parliament than the current Scottish Government appear to want. Within the context of the politics at present, I do not think it would be idle speculation to suggest that that might be convenient.

[Cathy Jamieson]

With reference to the amendment mentioned by the hon. Member for Banff and Buchan (Dr Whiteford) earlier, notwithstanding the comments I made at that stage, does my hon. Friend agree that it is rather strange that the Cabinet Secretary for Finance, Employment and Sustainable Growth in the Scottish Government is complaining that there are only some 28 months to conclude negotiations on pensions when a great deal of the Scottish Government’s effort appears to be going on other things at the moment? Perhaps some of that resource could be used to resolve these issues.

[Sheila Gilmore]

I thank my hon. Friend for her intervention, but I suspect that it might also be outwith the terms of the new clause, so I shall refrain from commenting.

Finally, there is a risk that we are missing something in Scotland and are not getting—or even trying to get—the powers we could have. That decision might be for purely party political reasons, so that people can lay blame, saying, “There is nothing we can do; we cannot make life better for you because we do not have the power to do so. It is all because of that nasty Government down in London and your only way out of this is to make that amazing leap so that with one bound we are free. Then, everything will suddenly be wonderful,” in the hope that that will persuade the people of Scotland that they should vote for separation. I am confident that the level-headedness of the Scottish people will mean that they will not be taken in by such proceedings.

--- Later in debate ---

I am aware of how pressing the question of devolution is for some of our colleagues in Scotland, but I am sure that the hon. Member for Nottingham East (Chris Leslie) would agree that the Bill is not an appropriate place to rework the devolution settlement put in place by the 1998 Act or the long-standing Sewel convention by making this House’s ability to legislate for local government pensions in Scotland subject to the Scottish Parliament’s consent.

[Cathy Jamieson]

The reason why we tabled the amendment is important. Notwithstanding the Minister’s comments on what the Cabinet Secretary for Finance said, concern has been expressed by the trade unions that the ability to make some of the regulations relating to the local government pension scheme in Scotland might change the relationship that had previously existed. We want to ensure that the existing practice is in the Bill and that there would be no change. That is what the amendment seeks to do.

[Sajid Javid]

I respect the hon. Lady’s intentions, but for the reasons that I set out, I do not believe the amendment is necessary. The situation as it stands is quite clear.

[Cathy Jamieson]

I thank the Minister for giving way once again. In all the correspondence that has gone back and forth between the Scottish Government and the Chief Secretary to the Treasury, did the Scottish Government at any stage ask for any amendments to be made to the Bill, either to clarify it or to give them further flexibility?

[Sajid Javid]

I have not seen all that correspondence, but to my knowledge the Scottish Government have not asked for any such amendments.

On amendment 12, I welcome the opportunity to reaffirm the Government’s commitment to the defined benefit structure of the new schemes. I would hate to think that the hon. Member for Nottingham East is unaware of the 85,000 or so public service workers who are already members of the current career average schemes. His amendment, which he says is designed to reassure public service workers about the nature of their pensions, refers only to final salary schemes. I can reassure all public sector workers, including those currently in career average schemes, that the Government are fully committed to implementing the defined benefit schemes that have been negotiated. I assure the House, just as I assured the Committee, that the Government have no intention of replacing these defined benefit schemes with different types of scheme designs.

There is no secret plot here. We have spent a long time in discussions with trade unions and member representatives to get where we are today. It would be foolhardy to throw away 18 months of work and do something entirely different. We do not intend to move away from defined benefit schemes in public services. Defined contribution schemes would not be the right kind of pension provision for many public servants.

--- Later in debate ---

[Sajid Javid]

No, I do not. The Scottish Government have had plenty of time to look at the proposals, which originated with Lord Hutton’s report. They may feel that they should have acted earlier, but they clearly had control over that.

[Cathy Jamieson]

I heard the Minister say that the Scottish Government had not made any formal request to change the time scale, but the Finance Secretary referred to that in his speech in the Scottish Parliament when he indicated that he was not bringing forward a legislative consent motion. If the Scottish Government were to make such a formal approach, would the Minister, even at this late stage, be willing to consider amendments once the Bill moves elsewhere?