Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 26th October 2010 Commons Chamber

[The Deputy Prime Minister]

First, let me apologise if the hon. Gentleman had been waiting for a meeting; I am keen to ensure that one is fixed as soon as possible.

I was not in any way seeking to promote smoking. It is a very bad habit, and I would never advocate it to anybody else.

[Harriett Baldwin (West Worcestershire) (Con)]

T8. The coalition programme for government calls for a commission to be established to look into the West Lothian question. Please will the Deputy Prime Minister update the House on the establishment of that commission?

[The Deputy Prime Minister]

My hon. Friend the Parliamentary Secretary, Cabinet Office, who has responsibility for constitutional affairs, will lead on that and he will announce our intention to set up a commission on the long-standing knotty problem of the West Lothian question by the end of the year.

Superannuation Bill

Harriett Baldwin Excerpts

Wednesday 13th October 2010 Commons Chamber

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

Following the final comments by the hon. Member for Birmingham, Yardley (John Hemming), I fully agree that we have been trying to create an environment in which agreement can be reached. However, if I were a civil servant watching this debate, with the prospect of the large-scale redundancies that will happen after the comprehensive spending review, I would almost despair. It will be extremely difficult for all of them to come to terms with the loss of their jobs. As a manager in the public sector in a former life, I have always found that people are realistic as long as their views are respected and they are involved in the discussions and negotiations, which have been entered into in a spirit of good will. To achieve that, we need to create a climate of good will where people feel that their views are being heard.

Despite my having opposed every cut of every job in recent years under the previous Government, we were told in the Public Bill Committee that 80,000 jobs were lost but there were only 80 compulsory redundancies. The negotiations that took place on the basis of the protocols established with regard to redundancies and transfer between Departments resulted in a system whereby large-scale compulsory redundancies were avoided. The Minister referred to past practice under the previous Government. As I said, I did not support the cuts that went on, but I genuinely think that they were committed to a negotiated settlement. In my view, had it not been for the interference of No. 10 and the Treasury—this is almost like history repeating itself—we would have obtained a negotiated settlement that all unions would have accepted. However, the settlement was imposed, and I opposed that. The PCS took the then Government to court because it believed that the accrued rights of its members were being interfered with contrary to law because it was an imposed settlement, not an agreed one. It was proved right in the court of law, and we have to come to terms with the reality of that.

[Harriett Baldwin (West Worcestershire) (Con)]

I am interested in the hon. Gentleman’s point of view on this. Does he believe that it is possible for the Government to negotiate to a satisfactory conclusion with the PCS given its position in all the negotiations?

[John McDonnell]

I do. I will come to that in a few minutes.

The position of the unions in the Public Bill Committee represented an attempt to acknowledge their responsibilities to their members. The PCS was in a similar position whereby, if it had not taken the Government to court to assert its members’ rights to their accrued rights and to consultation and agreement, it could have been taken to court by any individual member for failing to undertake its duty to its members.

Under the previous Government, there was a genuine attempt to negotiate a settlement. Under the current Government, I have found in my discussions with civil servants—not only PCS members but members of the other unions—that there is uncertainty among many of the people who may well be affected by the cuts to come as to whether the Government genuinely want a settlement, and anxiety that the Government are seeking to provoke a dispute. I listened to the Minister’s words, and I am grateful for them: they were positive and tried to create the climate in which a negotiated settlement can be achieved. However, the pattern of negotiations and ministerial statements in the past few months has not engendered an atmosphere in which a negotiated settlement can be brought about. That is why the Opposition have tabled their amendments. Every trade union representative at the Public Bill Committee made it clear to us that it was unprecedented for a Government, in the midst of negotiations, to introduce a Bill to impose a settlement in this way. It has never happened before in negotiations between a Government and the public sector.

--- Later in debate ---

[John McDonnell]

I meant 90% of the trade union members with whom the Government are negotiating.

May I tell the Minister what the POA has said about his words? Its general secretary Steve Gillan has said:

“I am annoyed that Mr Maude has leaked without prejudice discussions but I believe this has been deliberate in an attempt to drive a wedge between the POA and PCS. The POA will not allow him to do so.”

The Minister’s actions have meant that the union has now rejected the deal. Those actions were not responsible, and they were in contrast to the words of comfort that he has used here today and elsewhere in trying to engender a good industrial relations climate.

As my right hon. Friend the Member for Dulwich and West Norwood (Tessa Jowell) said, Members need to understand the strength of feeling among PCS, POA and other trade union members about the impact that the changes will have on their lives. We have had heart-rending cases submitted to us by people who have entered into mortgages, for example, believing that they had the security that even if they lost their job, they would have redundancy pay that would cover their mortgages. Now, they might lose their homes. We have heard of other people who were expecting significant compensation related to their salaries, one of whom would now lose £90,000 as a result of the Government’s proposals. No wonder people are angry and concerned. That is why they want their Government and their trade unions to come together to agree a fair way forward.

[Harriett Baldwin]

May I ask again the question that I asked earlier? Can the hon. Gentleman see a way for the PCS to agree to any negotiating position?

[John McDonnell]

Yes I can, and the PCS has written to the Minister again recently asking for meetings. I believe that one meeting has taken place, so there is potential. However, we cannot expect a negotiated settlement to take place when tactics are used that undermine the confidence not only of the PCS but now of the POA. That lack of confidence is now infesting other unions as well.

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[Richard Graham]

The right hon. Lady asks in which ways the Bill’s provisions are better. My understanding is that under the new deal that is being negotiated, a lower-paid civil servant—for example, one on a salary of £10,000—would receive up to 24 months’ statutory redundancy payment based on a salary of £23,000, which is better than the deal put on the table by the Labour party.

[Harriett Baldwin]

One theme that has come up in all debates on the Bill, including in Committee, was that we want better treatment for the low paid. I agree with my hon. Friend. I would have thought that the Opposition would welcome the low-pay aspects of the Bill and the improvement in the negotiating position.

[Richard Graham]

My hon. Friend is absolutely right.

If I may continue where I left off—

Superannuation Bill

Harriett Baldwin Excerpts

Tuesday 7th September 2010 Commons Chamber

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

May I declare an interest? In the Chamber tonight, I am representing thousands of civil servants who live and work in my constituency, home to Her Majesty’s Revenue and Customs, the Department for International Development and the Department for Work and Pensions. Many other constituents work in the Scottish Court Service, the Scottish Prison Service, the Forestry Commission and many other Departments, agencies and non-departmental public bodies throughout Scotland.

I have another interest to declare: I was a civil servant between 1982 and 1992; I became a full-time official with the Civil and Public Services Association, a predecessor of the Public and Commercial Services Union; and then I became a senior full-time official for the PCS. I know all the protagonists in this debate very well indeed, including the aforementioned Mr Serwotka.

The motto of the new coalition Government is, “We are all in this together,” and I should like to put that to the test by asking them to put their motto into actions rather than words, because, despite what was said amid the heady atmosphere of the Queen’s Speech debate, every Member recognises that we have to tackle the fiscal deficit. The difference—well, there may be more than one—between Opposition and Government Members is how we do so. The Opposition believe that there are other options, that the Government are going far too far, far too quickly and that the damage that occurs will create more problems for the economy.

The proposal before us is the first real acid test of the Government’s plans for deficit reduction, because we all know that the whole economy of the United Kingdom benefited from the economic bail-out. The private sector, the public sector and what people call the third sector all benefited, and in order to reduce the deficit every part of the economy must contribute. I shall argue strongly that that contribution must be proportionate and depend on how much people can afford. For example, the bankers, who perpetrated the biggest crime against our country’s economy, must pay the most in order to rebalance our books.

We know from the Budget that people will be asked to pay a 20% VAT rate, and that there will be what Opposition Members regard as a puny levy on the banks. We must also consider the proposal before us, and taking matters in the round I have reached the judgment that we are not all in this together, because we are asking those who can least afford it, those who are vulnerable and public sector workers to pay the largest price. That is the collective impact of the proposal. Despite what the Minister said, that is the message that the Government are sending out. I appreciate his point about the negotiations, but, having taken part in many negotiations over the years, I now recognise when I had the upper hand and when the employer did, so I recognise that in the current negotiations the employer—the Government—has very much the upper hand.

Ministers still have an opportunity to reach a common-sense resolution for the civil service compensation scheme, however. A lot of inaccurate information has been put out in the press, and there is a great deal of confusion about the difference between severance and early retirement. For example, on the BBC’s “Today” programme, I heard that some civil servants would receive six and two-thirds years’ payments after they had been made redundant. That clearly confused severance with retirement, because severance is simply based on length of service and salary, and the maximum payout under the current CSCS scheme is three years. In respect of retirement, the terms are for the over-50s, involving an enhancement, through added years, to their pensions.

The Labour Government’s comprehensive proposal to the civil service unions would have saved between £500 million and £650 million—not inconsiderable amounts of money, I hope Government Members will agree—and protected all the different bases in respect of early severance and early retirement.

[Harriett Baldwin (West Worcestershire) (Con)]

I want to clarify the hon. Gentleman’s point about severance, because the Library research paper states that early severance can cost “6 years’ pay” under the 1987 terms. Is that the case?

[Mr McCann]

The hon. Lady is absolutely correct, but earlier contributors made it clear that that refers to a very tiny proportion of the civil service staff; the vast majority are under the terms that I have given the House—[Interruption.] The hon. Member for West Suffolk (Matthew Hancock) shakes his head, but it is absolutely true that the vast majority will receive severance terms based on a maximum three years’ payout. [Interruption.] His colleagues nod in agreement, so he seems to be in the minority.

--- Later in debate ---

[Harriett Baldwin (West Worcestershire) (Con)]

I wish to add to the comments of Members on both sides of the House my recognition of the work that our civil servants do throughout the country. I have spent my working life so far in the private sector. Until I read about this legislation and the background negotiations that brought us to this point, I had not realised that there were still jobs in this land in which people could expect at redundancy to receive a payment of several years’ pay. As we heard, in rare cases people can receive up to six years’ pay. Most of my constituents would be astonished to learn that some who are faced with redundancy—it is inevitably shocking and stressful—are cushioned by a payment of several years’ salary.

I thought I might share with the House some observations from the labour market in the private sector. Redundancy is always a very difficult decision for an employer to take. In my experience, most employers will try very hard to help employees to move within the organisation or reduce their hours. There are many examples in the current downturn of people accepting less work and remaining employed. We acknowledge that redundancy is very expensive, not only financially but in human terms, and that all good employers will go out of their way to try to avoid it. However, we can also see that in a flexible, modern and changing economy, redundancies will occur. Therefore, the provisions are significantly more generous than one would see in private sector employment today.

[Thomas Docherty (Dunfermline and West Fife) (Lab)]

I can think of many privatised companies, as I am sure many colleagues can—I am thinking of British Energy and others—that have generous, multi-year severance packages, so it is wrong to say that we find them nowhere in the private sector.

[Harriett Baldwin]

I thank the hon. Gentleman for his intervention. I have obviously been in completely the wrong line of work, given that I was unaware of such significant redundancy packages.

We all recognise that people are reluctant to make employees redundant, and that they would make every effort to move people to new jobs. However, the Minister made an important point when he said that when redundancies need to happen, people want to avoid the situation in which the most recently hired and lowest paid are let go because decision making is distorted by the packages that must be offered to more highly paid people who have been with a company for a long time.

We can also acknowledge that when redundancies are made in the civil service—I gather that in the three years from 2005, there were 16,500 redundancies, which cost the public purse about £1 billion at an average of about £60,000 per redundancy—the money must be found from the taxpayer. I differ from my colleagues who said that the decision to introduce the Bill was made because of the deficit. I submit that even if we did not have a deficit, the sums of money being paid out in redundancy would seem no less huge.

We have talked a lot about fairness in today’s debate. Is it fair that some of the taxes paid by an individual who finds work after being made redundant in the private sector—the average redundancy payment in the private sector is approximately £9,000—go to pay significant redundancy payments in the civil service? We all agree that something must be done, and as the right hon. Member for Dulwich and West Norwood (Tessa Jowell) said, the CSCS is simply not appropriate for a modern civil service.

It would be right to do something about the situation in good times, just as it is right to do something in tough times, but it would clearly be better, as everyone agrees, if the unions and the Government successfully negotiated a change. It would be more attractive if the redundancies that are being discussed were voluntary. It is often the case that managing a redundancy process that has a significantly more generous voluntary element makes the process much less painful for the work force. In addition, it would be better if we negotiated a change so that the public sector is more vigorous and stronger when new jobs are created. It is one of the counter-intuitive laws of economics that companies that have very generous severance terms tend to hire fewer people than companies that are more flexible. It is also counter-intuitive that the mobility of staff within organisations that have more flexible employment terms is improved. That can often help with morale and job satisfaction.

We have spoken today about protecting the lowest-paid, but perhaps we should talk less about protecting them and recognise that the more junior staff are often able to move up. In other words, instead of talking about protecting junior staff, let us talk about promoting and creating more opportunity for mobility for them within the organisation.

It is also been observed that similar counter-intuitive laws of economics apply to countries. Countries that have more flexible employment laws have much stronger periods of job creation when they move into economic recovery.

I agree with colleagues on both sides of the House that it is a shame that we have to discuss the Bill and that it would be much better if we came to a successfully negotiated conclusion. Let us hope that while the Bill goes through Parliament, the negotiations bring about a more reasonable scheme that is both affordable for the public purse and fair to the very many valuable public servants who are covered by the current scheme.