Superannuation Bill

John Hemming Excerpts

Tuesday 14th December 2010 Commons Chamber

We are very pleased that the Minister has made substantial progress as the Bill has proceeded through both Houses. As he eloquently summarised it, the latest draft of the new clause, which stands before us as Lords amendment 1, requires a report to Parliament on the consultation that has been carried out with trade unions if there are any further reductions in future. I was particularly grateful to hear him confirm that future consultation on changes would have to be undertaken with a view to reaching agreement. That is substantial progress and we are pleased that the Government have accepted our arguments on some helpful changes. No doubt we could quibble about the details, but the thrust of the Government’s changes is in the right direction. We will therefore support Lords amendments 1, 2 and 3 and the consequential Lords amendment 7.

[John Hemming (Birmingham, Yardley) (LD)]

It is rather sad that, again, there are relatively few people in the Gallery when we are debating such an important issue. We need to value the work of people who work for society and all our public servants. Obviously the terms of the civil service compensation scheme do not affect those in the NHS or local authorities, who have varied schemes that are often much worse than even the proposed new terms of the civil service scheme.

This is an important matter, and I am pleased to support the Lords amendments. They make it very clear that we will be bound by good practice and enter into proper and meaningful consultations, with a view to coming to an agreement. Although one particular trade union may continue to try to veto the scheme, that does not mean that we should ignore the need to try to obtain an agreement using a reasonable approach. I am very pleased with the Government’s strategy of protecting people on lower incomes. That is an excellent thing to do, so I am pleased to support the Lords amendments.

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

Lords amendment 1 requires the Government to consult with the aim of seeking agreement, and provides for a report to Parliament in due course. Lords amendments 2 and 3 will bring the Bill into force two months after Royal Assent and I find it extraordinary that the Government see that as some form of concession, because the bulk of the staff who will be made redundant in the coming period will be made redundant under a scheme that is still to be imposed. The Government intend that that scheme will be introduced within the two months after Royal Assent, so there will be no report to Parliament, no commitment to consultation and no commitment to take steps to reach agreement, as is embedded in Lords amendment 1. The terms of the scheme, as they stand in the original proposals in the Bill, will be imposed. So although Lords amendment 1 proposes a system whereby there is at least some commitment to parliamentary scrutiny of the willingness and commitment of the Government to negotiate and seek an agreed settlement, Lords amendments 2 and 3 take away that commitment, because we know that the scheme will be amended within the two months to which Lords amendment 1 does not apply.

I cannot think of a better mechanism to incite industrial action. It could be construed as an act of contorted bad faith. Although there have been commitments in ministerial written statements, there has been no commitment to adhere to Lords amendment 1, because it would not otherwise be virtually vetoed by Lords amendments 2 and 3. In my view, that will not only result in industrial relations deteriorating but enhance the potential for legal challenges. It certainly will not enhance the legal protections for which the Government were hoping as a result of the amendments.

The amendments do not address the problematic core of the Bill, which is the imposition of caps and limits on the compensation scheme without the agreement of the unions representing the members affected. I have heard a lot about the four out of the six unions agreeing or recommending the scheme that is being imposed. I remind the House, however, that of the two main unions that represent the vast bulk—more than 75%—of the members affected, one, PCS, or the Public and Commercial Services Union, has not agreed the scheme and is recommending that its members reject it in the ballot; the executive of the other, the POA, has recommended that its members reject the scheme in the ballot, too.

I find it an absolute irony that in any future negotiations, which will, I suppose, probably be relatively minor because the Government will impose the bulk of the change in the next couple of months, the House will have some form of scrutiny of the negotiations as a result of Lords amendment 1, but it will not be able to exercise it in those two months. The reason for that is that if there was a full exposure of what went on in the negotiations, it would provoke even more anger among PCS and POA members.

This has been the worst example of industrial relations practice that we have seen in years. First, there was the use of a “blunt instrument”—I use the Government’s own words—of the threat of a Bill’s being brought forward to impose such severe caps that many would have lost more than two thirds of the redundancy payments that they had acquired as accrued rights over the years. There was then an extremely crude attempt to divide and rule the unions. I believe that the POA is seeking some form of legal redress against the Minister for the Cabinet Office for some of his statements. Those practices have now resulted in the virtual chaotic breakdown of the formal negotiating structures that have held good under past Governments throughout the decades.

If Lords amendment 1 comes into force, at least there will be some reflection of the negotiations that took place—and it might be more accurate. As the Minister has dwelt on the process of the negotiations, perhaps I might put on the record an alternative historical account of what occurred. Yes, the civil service unions—all six of them—sought to negotiate some form of agreed settlement throughout the summer. They did that in the light of the threat of the imposition of a Bill that would cut significantly their members’ redundancy payments.

In September, the Treasury intervened to insist on a cash cap on the new scheme, so there was no room to manoeuvre to improve the scheme beyond that cap. I believe that that significantly undermined the potential for a settlement. On 28 September, the Minister declared that he was pursuing agreement with five of the unions, excluding the PCS, and on 4 October a formal offer was submitted. On 11 October, PCS and the POA held a constructive meeting with the Minister, focusing on the cap on redundancy proposals and making proposals to redistribute from high earners to the vast majority of civil servants, enhancing the protection for the majority.

--- Later in debate ---

[John Hemming]

As someone who interests himself in procedural issues, perhaps I could think of the clause as being more like a supernova clause after which the sun will not rise again. Not being a Government Minister, I have the advantage of having no confidential knowledge whatever of the Government’s strategy. The interests of judicial review are relevant given that one would expect a judicial review when the order for the new scheme is laid, as it would be laid under the Bill relatively soon. In those circumstances, the Government will not want to take a completely new piece of legislation through the House because of a judicial review. It is possible to accelerate the proceedings of a judicial review, and the courts would probably look on such an approach favourably given the situation for the country and the importance of having legal certainty, but it is quite important to have the facility to deal with such a situation if it arises. However, I support the idea of having a supernova clause because there is a point at which the sun need not rise again.

[Mr Byrne]

I want to speak briefly about Lords amendments 4, 5 and 6, as well as amendment (a), tabled by my hon. Friend the Member for Hayes and Harlington (John McDonnell). During proceedings on the Bill, my right hon. Friend the Member for Dulwich and West Norwood (Tessa Jowell) has consistently raised concerns about the arbitrary caps that the Government introduced at the start of this process, which now form the body of clause 2. I confess that we are still not clear about why the caps are still in the Bill given that clause 1, which was newly introduced on Report, effectively gives the Government the power to impose any settlement after the consultations that we discussed earlier have been completed. We heard, in the Minister’s helpful update to the House, that there is a degree of agreement with at least some of the trade unions, which the Government have declared will supersede the terms in the Bill. Why then do they not seek to introduce a sharp instrument containing the specific terms they have agreed with the trade unions, rather than the blunt instrument containing general powers that is the Bill before us?

We are pleased that the Minister has given a clear commitment, in a letter to right hon. and hon. Members, that it is his ambition to

“repeal the caps in clause 3 insofar as they could impact on the new civil service compensation scheme”.

His letter also says that if the caps were ever revived he

“would table an order…so as to increase the caps to such a level that would…reflect what would otherwise apply under the new scheme.”

Most of us will welcome that good progress.

In earlier debates, we raised concerns that the Bill would allow the revival of caps at any time in the future even after a negotiated settlement was in place. We fear that the relevant measure, which the Government call a sunrise clause, would put an undesirable amount of power in their hands during negotiations, as they could simply threaten to revive statutory powers whenever they ran into any dispute on any matter, not just issues of redundancy. Given that it would allow the Government to resurrect the terms of a long-dead provision, it is not so much a sunrise clause as a zombie clause, which would live on for ever. Whatever we call it, the measure is entirely without precedent in a Bill of this nature. Indeed, the only recorded precedent of such a measure is in the Prevention of Terrorism Act 2005.

We are pleased that there will be a limit of three years on the caps if they are revived, and that the Government cannot extend that period. Given what the Minister has said this afternoon, however, I do not see how he can argue that the correct balance of time and the correct limit to any revived power should be three years. The whole House will welcome what the Minister said this afternoon about his ambition that the revival of the caps should never be triggered. If that is true—and I am prepared to accept that it is—I do not see why he cannot accept the very sensible amendment tabled by my hon. Friend the Member for Hayes and Harlington. Although we are happy to accept amendments from the Lords, we shall support amendment (a).