Public Service Pensions and Judicial Offices Bill [Lords]

Debate between Chris Stephens and Simon Clarke

Report stage
Tuesday 22nd February 2022 Commons Chamber

[Chris Stephens]

I will be brief, having been on the Bill Committee. First, I should probably declare that I am a member of the Scottish local government pension scheme. I have always taken the view that a pension is deferred pay. In the past few weeks, university lecturers have taken industrial action because of the threats to their pension schemes; I have been very proud to visit their picket lines and offer my solidarity and support.

I wish to raise a couple of issues. I view new clause 1 as a Trojan horse. The main points that I want to raise are my support for the amendments tabled by my good friend the right hon. Member for Hayes and Harlington (John McDonnell), and the effects on employees and workers. In Committee, the Chief Secretary assured me that discussions were ongoing with trade unions to fix the issues. I hope that he will update the House on any discussions that have taken place since then and on the progress of those talks.

A basic principle that has been identified in relation to many of the amendments is that workers should not be penalised financially for mistakes that have been made in calculations by the Government or employers. It is a clear principle for many of us on the Opposition Benches that no worker should be penalised for such mistakes and that their pensions should not be affected. I therefore support the Opposition amendments in that regard.

[Mr Simon Clarke]

I thank all right hon. and hon. Members who have spoken today. I appreciate the constructive way in which all Opposition parties have handled the Bill. Today’s debate has focused on several important themes, which I will address in turn.

One central theme was the clarification requested by the hon. Member for Hampstead and Kilburn (Tulip Siddiq) and other Members about whether the estimated £17 billion cost of remedy will be included in future valuations of the cost control mechanism for unfunded schemes. The answer, definitively, is that it will not. The Government will reform the cost control mechanism to a reform scheme-only design for future valuations. I hope that that reassures the House.

Public Service Pensions and Judicial Offices Bill [ Lords ] (First sitting)

Debate between Chris Stephens and Simon Clarke

Committee stage
Thursday 27th January 2022 Public Bill Committees

[Mr Clarke]

It is a pleasure to serve under your chairmanship, Mr Sharma. I thank colleagues on both sides and those in the other place for the constructive way in which we have proceeded with this Bill so far. I thank my officials, who have done an exemplary job on a complex piece of legislation.

At the heart of the Bill is fairness and equal treatment for the public servants on whom we all rely. To ensure we achieve that objective, the Bill is underpinned by the core principles of greater fairness between taxpayers, fairness for lower and higher earners, and the future sustainability and affordability of public sector pensions. I would like to take a moment to explain why the approach to bring forward a number of amendments at this stage has proved necessary—indeed, crucial—to provide a robust and effective remedy.

As I am sure Committee members will agree, this is a highly complex and technical matter. The Bill covers more than 40 schemes. Each, individually, has its own layers of detail and complexity. We are dealing with a somewhat unprecedented issue. Retrospective changes of this scale have not previously been required for occupational pension schemes. However, it is undoubtedly vital that we get it right. Since the Bill was introduced, the Government have continued to work with the individual schemes, stakeholders and Departments to check and recheck the Bill to ensure that it will deliver our commitments to remove the discrimination and offer a complete and effective remedy.

Clause 1 identifies periods of service that are in scope to be remedied under the Bill by placing a number of conditions that must be met. The first condition is that the service took place during the period that the discrimination arose. The second condition is that the service is pensionable under a public service scheme and would have been pensionable under a chapter 1 legacy scheme had the discrimination not occurred.

The third condition is that the person was, on or before 31 March 2012, a member of a legacy scheme or—in the case of certain schemes for firefighters—eligible to be a member of such a scheme. Members who first joined any public service pension scheme after that date were ineligible for transitional protection regardless of their age, and therefore were not subject to the discrimination identified by the court.

The fourth and final condition is that there is no disqualifying gap between the service to which the third condition relates and the period in question. For reference, a disqualifying break in service is defined as a period of more than five years, which reflects the rules of public service pension schemes but allows members who leave to subsequently rejoin when the gap between leaving and rejoining is five years or less.

Amendment 2 concerns an issue that is specific to the teachers’ pension scheme involving teachers with excess service. If a teacher with a full-time teaching contract has an additional part-time contract or contracts, the additional part-time contract constitutes the excess service. Excess service is pensionable in the new teachers’ pension scheme but not in the legacy scheme. However, where the relevant employer has an existing relationship with the local government pension scheme, the regulations of the LGPS provide that the excess service is pensionable in that scheme instead. The teacher will automatically be entitled to enrol into the LGPS in relation to their excess service, therefore providing a home for those accrued rights.

The amendment updates the second condition in chapter 1 to cover excess teacher service, meaning that excess teacher service is a remediable service and, therefore, subject to the provisions in clause 2(1). It will ensure that a member’s excess service can be rolled back to the appropriate scheme. Amendment 4 is consequential on amendment 2, and amendments 34 and 38 define excess teacher service.

Amendment 3 is designed to ensure that the remedy applies correctly to former local government staff who have compulsorily transferred from their employer as a result of outsourcing and were entitled to pensions protection. If such members subsequently became a member of a chapter 1 scheme, the amendment provides that the time they spent in a private sector pension scheme would not count towards the disqualifying gap in service when assessing their eligibility for remedy, which is consistent with the approach provided in respect of transfers and central Government fair deal arrangements.

[Chris Stephens (Glasgow South West) (SNP)]

I am speaking as someone who was a local government employee in Glasgow before I came to this place. Is the Minister saying that, as a consequence of this amendment, if an employee working for the local authority finds that their service is outsourced by a decision of the local authority, that employee would not have pension rights as a result of the service that they would have if they transferred to that outsourced company? Could he clarify that?

[Mr Clarke]

To reassure the hon. Gentleman, the amendment is designed to prevent that from occurring. In other words, the fact that their employment was outsourced during that period would not constitute a gap of longer than five years, which would put that out of the scope of remedy. It is designed precisely to ensure that they do have protection, rather than that they do not.

Finally, amendment 36 defines a local government contracting-out transfer for the purposes of what I was just alluding to.

Public Service Pensions and Judicial Offices Bill [ Lords ] (Second sitting)

Debate between Chris Stephens and Simon Clarke

Committee debates 2nd sitting & Committee stage
Thursday 27th January 2022 Public Bill Committees

[Chris Stephens (Glasgow South West) (SNP)]

There is obviously a serious issue here, on which the Government have had representations. Can the Minister assure the Committee that discussions will continue between trade unions and other associations and the Government to try to fix this problem?

[Mr Clarke]

I thank the hon. Gentleman for the spirit in which he asks his question. We always want to discuss these issues as fully as possible with a view to finding viable options where they exist. As I said, the Home Office has consulted on detailed regulations to implement the prospective McCloud remedy for the police pension scheme, and it will bring forward the outcome of that consultation in due course.

The Government must not take action that inadvertently creates a new form of the very discrimination that this legislation is designed to address. The Government must also safeguard the purpose of the reforms proposed by Lord Hutton and ensure that public service pension schemes are put on a sustainable fiscal footing. As the Independent Public Service Pensions Commission put it,

“Allowing current members to continue to accrue further benefits in the present schemes for many decades would be unfair and inequitable to the new members coming behind them.”

The reformed public service pension schemes remain among the most generous schemes available in the United Kingdom. Based on the Office for National Statistics’ most recent assessment, 6.3 million public sector workers participate in these valuable schemes, while only 0.7 million workers in the private sector have access to defined-benefit schemes that are open to new members.

I am concerned that the new clause ultimately seeks to oblige the Chancellor to devise measures that would contradict these crucial aims of the prospective McCloud remedy. Compensating members with remediable service for the difference in pension age between their legacy and reformed schemes would, effectively, leave a protected class of public service pension scheme members beyond 31 March 2022, which could perpetuate the discrimination identified by the courts, or give rise to new discrimination. It would also severely weaken the efficacy of the prospective remedy for many years to come, at very considerable cost to the taxpayer.

To summarise, I genuinely thank the hon. Member for Hampstead and Kilburn for bringing attention to this issue, and reassure her that the Government have been considering the position of these members. However, careful consideration must be given to the need to avoid perpetuating the discrimination identified by the courts, or introducing new discrimination against other pension scheme members, or inadvertently undoing much of the policy aims of this Bill, and this new clause asks the Chancellor to propose a means of doing just that. I therefore, respectfully, ask the hon. Lady to withdraw the new clause.

Financial and Social Emergency Support Package

Debate between Chris Stephens and Simon Clarke

Wednesday 25th March 2020 Commons Chamber

[Mr Clarke]

I will of course take that point for the record. Let me in turn pay my own tribute to the power of the market.

In these unusual times, we have a shielding policy, for which my Department is responsible. Letters have been sent to 1.5 million high-risk individuals asking them to shield themselves and stay at home for the next 12 weeks. I think we all recognise the magnitude of what we are asking people to do. I emphasise to everyone who is in the process of becoming shielded that we are there for them and we will not let them down.

[Chris Stephens]

Let me ask the Minister for, I think, the fifth time today, what action are the Government considering to protect workers and employees who have one of those letters but whose employer is forcing them into work? What are they going to do for people put in that dreadful situation?

[Mr Clarke]

To put it simply, none of those individuals ought to be going to work at this time; the Government would stand with anyone who refused to go to work because they need to be shielded, and we will stand up for them if any employer is so foolish as to try to press that point.

Those who are being shielded will benefit from a website and a telephone helpline, both of which are now fully operational. We are working with all partners—councils, the food industry, local resilience and emergency partners and voluntary groups—to ensure that essential items can be delivered as soon as possible to those who need them. Deliveries of food will start this week, medicines will be delivered by community pharmacies, and groceries and essential household items will be delivered by local councils and food distributors working with supermarkets to ensure that no one needs to worry about getting the food they need. Parcels will be left on the doorstep.

The Government, the food industry, community pharmacies, councils and emergency services are working around the clock to get this scheme off the ground. I pay tribute to the civil servants who have been working tirelessly throughout this period. I am enormously impressed by the dedication and resolve that they have shown. I can also confirm that, from today, we have deployed military planners to every area of the country to help to co-ordinate this work. We pay tribute also to our armed forces and the role that they will play in this effort.

As Members have highlighted, it is not only the incredibly hard-working medical professionals on the frontline against coronavirus who are under immense pressure. We in my Department know that local authorities, which are essential to the running of this country, are feeling the pressure too. We have already announced £3.4 billion to alleviate that pressure, comprising £1.6 billion of covid-19 pressures funding and the initial £1.8 billion grant for business rates relief measures. We know that immediate pressures require immediate cash, so we can now confirm that the funding will be with every local authority, in its bank account, by Friday. We have said that we will do everything we can to support the sector, and this is us doing it.

When it comes to grants for businesses, the Department for Business, Energy and Industrial Strategy has now issued guidance to all local authorities, and we will provide the full £13 billion of funding for the business grant support scheme at the beginning of April. We must acknowledge that the crisis will not just burden our social care system and affect our most vulnerable; it will also affect our local economies, so local authorities should be confident about contacting businesses in their patch and making arrangements for the grants to be paid as quickly as possible. Time really is a vital factor here.

Further to the targeted funding, we have set out detailed guidance for local authorities on the 100% business rates discount for the retail, hospitality and leisure sectors, which was published by my Department this week. Today, we have announced a further expansion to the discount to remove some of the previous exclusions from the relief, to ensure that businesses that are now required to close—including estate agents, letting agents and bingo halls—will pay no business rates this coming year. My Department will amend guidance as necessary this week. We will, of course, fully compensate local authorities for the costs of this measure.

More broadly, I acknowledge that asking businesses to close their doors is a huge ask—those businesses have often been built up over many years of hard work and sacrifice—but it is only through such measures that we will ensure public safety. By the action that the Government are taking, we will mitigate the effects of the crisis so that once it is over, businesses can bounce back and renew our economy.

The Government’s measures not only are targeted at our businesses and public sectors but will support citizens at an individual level, too. We are working to support those who, through no fault of their own, are facing a sudden drop in income. The Chancellor has announced unprecedented measures to support people by making funding available to cover up to 80% of wages. In response to a point raised by the shadow Chancellor in his speech, I can confirm that apprentices will qualify for that if they are on PAYE. I will write to him on that point, but it is certain that they are included.