Superannuation Bill

John McDonnell Excerpts

Wednesday 13th October 2010 Commons Chamber

[John Hemming]

I thank the shadow Minister for saying what her objectives are. In the past, the Opposition have often had objectives that they failed to achieve. Their objective was to remove the trade union veto, but the amendment would reinstate it. Their objective is for this not to be a money Bill, but by voting against new clause 1 they would, if successful, make it a money Bill. I accept that the shadow Minister has particular objectives, but what she does tends not to work; that is the reality of the situation.

We have to be effective in terms of running Government. We must do things that work—that achieve results. This Bill is about achieving results: it is about creating a situation whereby there can be negotiations with the trade unions in which we can deal with difficult cases where individuals are suffering particular hardship. In the Public Bill Committee, there was an attempt to negotiate through discussions with the trade unions. That was dreadful—it was almost impossible to get anywhere, and I find it rather sad that anyone tried. The reality is that negotiations have to work in a particular way; one cannot negotiate through a process of producing legislation. We need a blunt instrument that creates an environment in which a negotiated settlement can be arrived at. To that extent, I support new clause 1.

[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.

[John Hemming]

Does the hon. Gentleman recall from the Committee that the senior civil servant responsible for the issue said that he would have advised any Government to take this sort of approach?

[John McDonnell]

That very civil servant’s advice landed the last Government in court, where they lost. I met him in the week before the general election and said to him: “You will lose in court because this is inaccurate advice on legal grounds, but in addition, it will not contribute to the conclusion of a negotiated settlement, and we’ll be back again within weeks”—and we were.

[John Hemming]

Does the hon. Gentleman accept that this is not ideologically driven but driven merely by the difficulties of our current circumstances?

[John McDonnell]

I do not believe that many civil servants who will be affected by job losses believe that the Government are seeking to resolve this matter by negotiation, and I am trying to reflect those views. We in this House, and the Government in particular, need to go the extra mile to get back to an atmosphere where there is confidence among the people who may well be threatened with the loss of their jobs, and we need to convince them that there is the opportunity of a genuine negotiated settlement. As I said in Committee, our responsibility is to seek to create a climate in which a just, negotiated settlement can be engendered.

[John Hemming]

Does the hon. Gentleman accept that the fact that the Government are inserting a new clause that prevents this from being a money Bill is a sign of good faith from them?

[John McDonnell]

I will come to that.

There has been a litany of disasters during these negotiations. If we want to secure an agreement, we need to try to keep everyone on board. The puerile attempts to divide the unions have been completely counter-productive. The first attempt was to try to insinuate that the PCS negotiator had agreed the terms but had been overturned by the PCS executive. That was put to the PCS negotiator in the Public Bill Committee and it was denied, so it is not true. In fact, the PCS did what it always does as a democratic union—it takes the issues back to the executive. It is probably one of those unions that consults its members more than any other.

The second attempt to divide the unions was by the reference to five unions having agreed a settlement and only the PCS being excluded by refusing to do so. The Minister put out a press release that caused anger among the trade unions. The Prison Officers Association immediately issued a press release saying that letters written to the Minister, in confidence and without prejudice, were put in the public domain. The result is that this week the POA has rejected the deal.

It seems that four of the six unions were originally going to put the deal to their members, but the POA and PCS represent more than 90% of the people who will be affected. They are the unions that we have to convince if we want a negotiated settlement, and they are negotiating on behalf of their members based on what those members tell them through their executive.

[Mr Maude]

The hon. Gentleman asserts that the POA and PCS represent more than 90% of the people affected, but only 60% of civil servants are members of trade unions to begin with.

[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.

[Mr David Ward (Bradford East) (LD)]

Does the hon. Gentleman share my concerns about employees beyond those directly affected by the Bill? I am concerned about the hundreds of thousands of employees in the rest of the public sector who will be watching the process closely and wondering what the next stage will be as we rebalance the economy from public sector jobs to private sector jobs.

[John McDonnell]

I take the hon. Gentleman’s point, which is valid and valuable. The Bill sets what many believe is a precedent for what will happen elsewhere, so it behoves us to get it right and ensure that we create a climate in which people at least understand that they will get a fair deal.

The Government’s tactic of the use of a money Bill was derisory. This was never really a money Bill, and when we asked for the justification for its being used as one, nothing was forthcoming. I have seen no note from Minister even defining it as such. It was simply a tactic whereby the Lords would have been excluded from amending the Bill, which would therefore have been implemented earlier. This House would have been denied the second opportunity for debate provided by Lords amendments. That tactic had an impact on people’s confidence in the genuineness of the Government’s approach to the negotiations.

The Government’s approach to the concept of accrued rights has been blasé. Their interpretation of accrued rights—that they are not really accrued but are obtained only at the time of a redundancy—seems contrary to not just law but common sense. I cannot see it standing up in any court of law, and it could indeed be challenged in court. As was said on Second Reading—by the Chair of the Public Administration Committee, I believe—the Bill could be enacted and then the scheme challenged in a court of law and the European courts. The Government could lose again, as they already have once, and then we would have to pay compensation to all the people who had been made redundant in the interim. That is no way to treat people and certainly no way to enact legislation.

I have some anxieties about the Government’s new clause, which is why I support my party’s Front Benchers’ efforts to eradicate it. It is there as a threat that the Government will drive people out of employment on the lowest terms possible. It would also enable them to amend the scheme in future. There are now additional proposals to change the protocol involved, the notice period for redundancy and other matters, which would undermine the protection of people who lose their jobs and the flexibility of a manager to avoid compulsory redundancies, which the hon. Member for Birmingham, Yardley sought.

The Government’s handling of the issue has soured the industrial relations climate in the civil service and sent a message to trade unions in other areas, such as health, teaching and local government, that what has come to the civil service unions affected may be visited on them. If the Government do not learn the lessons of the debates on the Bill over the past few weeks, they will provoke industrial action, and that action will be justifiable. Unions will have sought to negotiate a reasonable settlement, but the Government will have played fast and loose with the process, refused to listen and imposed something that will have a considerable effect on the lives of people threatened with the loss of their jobs.

To answer the question that the hon. Member for West Worcestershire (Harriett Baldwin) asked me, the position of the PCS, and now of all the other unions, is that they would welcome the Government going back to the negotiating table for serious negotiations. I urge the Lords to amend the Bill so that it will be brought back here for debate. I welcome the Government’s proposals for amendments in the Lords, because they would give us the opportunity for further debate and a further period in which there would hopefully be serious negotiations. They would give this House a long-stop role, so that we could determine whether there had been a just settlement and whether the Bill should therefore pass.

Finally, the House should not underestimate the strength of feeling of public servants on this issue. We have a responsibility to them and to our constituents whom they serve. If we undermine their role in any way through the Bill, we will live to regret it and so will the Government.

[Richard Graham (Gloucester) (Con)]

I am puzzled by the logic of the Opposition’s position this afternoon. At the beginning of the Bill’s passage, it was agreed throughout the House that every party recognised the need for change. The right hon. Member for Dulwich and West Norwood (Tessa Jowell) tried to bring it about. She introduced her Bill, but she was blocked and prevented from taking it through. The ball passed to the coalition parties, and we have now introduced a new Bill that recognises the bluntness of the instrument required to achieve a negotiated settlement.

We have heard this afternoon from my right hon. Friend the Minister about the deal on the table, which, if I understand it correctly, will offer up to 21 months’ pay on voluntary terms, plus a notice period of three months, making a maximum total of 24 months’ redundancy pay for all civil servants earning less than £23,000 a year, but based on that £23,000 figure. That is a better deal than the one that the Labour party offered civil servants earlier this year. When the right hon. Member for Dulwich and West Norwood said that she would oppose new clause 1 on the basis that our civil servants deserve better, I was left wondering which civil servants she meant. The truth is that the debate clearly shows that those of us who support new clause 1 do so precisely because we want a much better deal for lower-paid civil servants, which is the whole exercise of the Bill.

--- Later in debate ---

[John McDonnell]

Much has been said about the need for the unions to negotiate. Let me be clear about the unions’ position, as a number of general secretaries are in the building today. The POA makes it clear in its statement that it has rejected the Government’s final offer, but it has left the door open for further dialogue with the Government, which must be meaningful with all the Council of Civil Service Unions present and with no exclusions.

Mark Serwotka of the Public and Commercial Services Union has written to the Government and briefed other MPs to the effect that he is keen to re-enter talks, but stresses again that they must be meaningful. The PCS believes it has worked hard to reach a settlement. Let me quote Mark Serwotka:

“From the outset PCS has worked hard to come to a fair deal. We cannot accept the current offer and are calling for further talks. If those talks do not take place we will continue to oppose the Bill in Parliament and will take legal action when appropriate as we have successfully done in the past.”

The two unions representing the vast bulk of the civil service members who will be affected by the Bill are willing to negotiate.

The problem seems to be not the Minister’s willingness to negotiate, but the Treasury envelope within which he is negotiating. If that is the problem, I suggest that the Treasury gets directly involved in these negotiations as well, so that it can see that its attempt to gain a short-term saving will have a long-term cost to the Government. That might help to get some productive negotiations going. By the time the Bill comes back from the other place, we might have a settlement across all the unions, but any attempt to try to divide the unions again will, I believe, be counter-productive. We now need to create a climate of industrial relations that will enable these negotiations to take place successfully for all the unions, not just for a small minority.

Question put, That the Bill be now read the Third time.