Local Government Pensions Scheme (Transitional Provisions, Savings and Amendment) Regulations 2014

Lord Bourne of Aberystwyth Excerpts

Tuesday 13th May 2014 Lords Chamber

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I rise to speak on this matter because, although other Members of this House have been Assembly members—and, obviously, councillors—before, I am the only remaining Assembly member in this House. I thank the noble Lord, Lord McKenzie, for tabling the Motion of Regret. I have also been a councillor, and I can tell your Lordships that I certainly did not feel like a volunteer. I felt like someone who worked extremely hard; it was way beyond anything that a volunteer has to put up with.

I think that it is deeply illogical, in particular, for Assembly members and the Mayor of London to be excluded from the scheme. It is true that we are full-time and we are salaried. We are, in effect, like MPs: we have the same sort of elected demands on our time. Of course, the Mayor of London is also a police and crime commissioner. It seems deeply illogical that other police and crime commissioners will stay in the pension scheme when the Mayor of London will be excluded, although he is a police and crime commissioner by law. I would like a bit of clarification on that: is he excluded as Mayor of London but included as police and crime commissioner? In its report of 2000, the Senior Salaries Review Body recognised the full-time roles of the mayor and the Assembly members, and it decided that they should be members of the Local Government Pension Scheme. The SSRB saw no reason to change these arrangements.

It is also deeply unfair for councillors to be excluded. It is a time when it is harder and harder to find people to stand for these posts: they are less and less rewarding, and to exclude councillors from a pension scheme is not just unfair but also rather cruel.

In addition, Assembly members and the Mayor of London will have to find alternative arrangements for their pensions. This will probably be much more expensive than the local government scheme but it will be funded by the taxpayer. We have heard about savings, but actually it will cost the taxpayer more if we go outside the scheme. Therefore, I deeply regret that this has happened.

[Lord Bourne of Aberystwyth (Con)]

My Lords, it is important to look at this in context. In opening, I say to the noble Lord, Lord McKenzie, that we have to be careful when we talk about volunteers. There are millions of volunteers in this country who do fantastic work, and we should not categorise them as “mere volunteers”. They do fantastic service for this nation. I recognise that councillors’ work is of a special nature, but we should not detract in any way from the marvellous work done by volunteers up and down all the nations of the United Kingdom.

The nature of councillors’ work is different from that of those people who have, historically, been protected by the Local Government Pension Scheme. I think we would all recognise that the first aim of the Local Government Pension Scheme should be to provide a decent, a good, pension for those who work for our local authorities. Historically, going back to the beginning of the century, councillors were not provided with a pension. It was introduced in the aftermath of 9/11, either on that day or on the next day. That is not to say that it was wrong, but it was perhaps not given the consideration that it should have had. This reverts to the historical position of recognising that councillors are somewhat different. They do—let us recognise it—fantastic service: unstinting, unsung, underappreciated and very often totally unappreciated. However, it is also worth saying—and, to be fair, the noble Lord, Lord McKenzie, said this—that it is only a small minority of councillors, I think about 16%, who are signed up to this scheme. Again, we need to get that into perspective.

I also do not recognise the comments made by the noble Baroness in relation to the cost of the mayor and so on providing for their own pensions. I do not see that there is a tax-funded consequence of that, at least not in the same terms as the scheme that applies at the moment. Perhaps I misunderstood that, but I could not see the consequence there. If I have misunderstood, perhaps that will be elucidated later and, if so, I apologise for that.

The second point that is worth making is that there will be a saving in the scheme, and we have to recognise that resources are scarce. I am not sure whether the party opposite is committed to bringing this scheme back in; I have not heard that said. It is one thing to decry this and say it is a bad thing, but I have not heard any commitment to bring it back in. Perhaps there is such a commitment and perhaps that can be clarified, because there is a saving and all parties recognise that there is a deficit that has somehow to be dealt with. Every saving, no matter how small, contributes to dealing with that deficit. It is very easy to say that we approve of measures to tackle the deficit, but the party opposite often falls into the trap of saying it approves of measures to tackle the deficit and when anything specific is brought up to save money, it is always against them. We need to do that and put this into perspective.

My last word is to say again that we are in great danger of castigating volunteers up and down this country who do terrific work without any allowances or pension arrangements. We need to get that on the record.

[Lord Beecham (Lab)]

My Lords, I should perhaps declare an interest as vice-president of the Local Government Association and a serving councillor on Newcastle City Council, albeit one who has not been involved in any way with this provision of local authority member pensions.

I begin by extending congratulations to the noble Baroness, Lady Williams of Trafford, who as far as I am concerned is making her first appearance on the Front Bench on a DCLG matter. I may have missed her on a previous occasion, but in any case it is a pleasure to congratulate her on that, and on not having to answer this debate or accept responsibility for this particularly malign set of proposals.

These proposals were launched initially by Brandon Lewis MP, the Under-Secretary of State at the Department of Communities and Local Government, in October 2012. I think that his main claim to fame is that, on an organisation called Phoenix radio, he hosted a talk show called the “Eric and Brandon Show”, which I suppose had a fairly minimal audience in the Brentwood area, where Mr Lewis was at that time the leader of the council. Subsequently, he has of course become an MP elsewhere, while his colleague, who is now the Secretary of State, is the Member of Parliament for the same constituency. Quite whether that broadcast had the impact of the Nick Clegg broadcasts on London radio, I hesitate to think.

However, Mr Lewis must certainly be given the credit for a certain amount of ingenuity. He wrote a letter on 13 March 2014 to Conservatives MPs in England—not that there are many outside England—to explain and defend what the Government were doing. In that letter he said, as we of course understand, that,

“councillors do not receive a salary; rather, they receive allowances to compensate for their out-of-pocket expenses”.

That is an interesting formulation because the actual wording of the Government’s document about this was rather different. The wording in paragraph 1.20 of that document said:

“Councillors are volunteers, elected to their local council to represent their local community. Councillors are not paid a salary or wages, but they are entitled to allowances and expenses to cover their out-of-pocket costs of carrying out their public duties”.

Now, expenses are clearly designed to cover out-of-pocket costs but allowances are not the same thing. Mr Lewis has elided the two concepts in his letter, and quite deliberately so. In addition, he said that,

“following changes made by the Labour Government, allowances have slowly become a form of salary, a situation worsened by the state-funded pensions”,

as if the entire cost was paid by the taxpayer. Of course it is not, as it is a contributory scheme.

However, even that is not quite the full story because paragraph 1.9 of the Government’s document says:

“The provision allowing for councillors’ pensions in England is contained in Section 18(3A) of the Local Government and Housing Act 1989”—

when to the best of my recollection there was not a Labour Government in office—

“and the Local Authority (Members’ Allowances) (England) Regulations 2003 made under the powers contained in that section”.

We have one former Secretary of State present from a Conservative Government, although I do not think that the noble Lord was the Secretary of State at the time. But it was a Conservative Government who facilitated or indeed established the concept of making this scheme a possibility. Of course, Mr Lewis carefully avoids that reference but he then says:

“This blurs the distinction between council officers and councillors”.

In whose eyes, it has to be asked, is there a blurring of the distinction? Citizens can distinguish perfectly well between councillors and officers. What is the nature of this blurring that is alleged to be taking place?

I have been a councillor for what might seem an interminable time, particularly to some of my constituents, but I am not alone in having a long period of service. I anticipate that we will hear from other noble Lords today who have had very distinguished local government careers, such as the noble Lords, Lord True, Lord Shipley and Lord Tope, as well as my noble friend and the noble Baroness, Lady Jones, who have already spoken. Looking around the Chamber, it is possible that there will be others such as the noble Lord, Lord Palmer of Childs Hill, and my noble friend Lord Harris—and there is of course the noble Baroness, Lady Eaton. How could I forget her? Of the five noble Lords I anticipated would speak, between us we have served 165 years, 43 of those as leaders of our respective councils. It was not until the late 1980s that I was in receipt of a special responsibility allowance as leader of my council. I did not take the full amount until the last three years of my tenure. I was senior partner at a firm of solicitors and I felt, in the circumstances obtaining in the early 1990s, that I should claim the full £7,000 a year, which was the allowance paid by my authority at that time. We are not talking in general about very large sums.

Among my successors was the noble Lord, Lord Shipley, who, no doubt, will tell us about his own experience. My recollection is that he also would have received a modest allowance as leader of the council when he served his term. The present leader of Newcastle City Council—with a budget which, as a result of government cuts, is alas declining from the £260 million a year it had originally reached—receives an allowance of £16,500 and a basic allowance of £8,500. The specialist allowance has been frozen and the standard allowance for members in Newcastle has been cut. That is likely to be the situation in many local authorities in this country. When I was leader of the city council, I was in receipt of a combined allowance that was significantly less than was paid to my secretary. Exactly the same position will apply to all my successors, including the noble Lord, Lord Shipley, and the current leader; and it may well apply in a number of other authorities.

However, there is another matter that Mr Lewis carefully avoided mentioning in his letter to his political colleagues, which is at paragraph 1.11 of the Government’s document. It says:

“Councillors are eligible for allowances to be pensionable if the local independent remuneration panel made a recommendation to that effect”.

In other words, this is not something dreamed up and decided upon by a local authority: it has to follow a recommendation of the independent remuneration panel. Why does Mr Lewis not refer to that? The answer is perfectly obvious: it would demolish the case he is making, which effectively is that greedy local authority members are determining for themselves whether they should be part of this scheme. It is a shabby and disgraceful way to mislead his colleagues, let alone members of the public.

I recall very well that in my early years as a councillor, before I became leader, I had a very good colleague who felt he had to give up his time at the council, because it was going to affect his own pension at work. Clearly, there are many members up and down the country who feel that they cannot continue. Turnover of members is a significant factor, particularly in London. London colleagues may agree, or may not be able to confirm that. There is a particularly high turnover of people who are in employment because it is very difficult to discharge one’s duties as an elected member—at any level, but particularly at a level which carries significant responsibilities—and be in gainful employment. We do not want to see local councils composed of the unemployed, the retired or the rich. A council composed in that fashion is not an adequate way of serving the public. We want people who are actually in a job, working in the community and bringing that experience and influence to bear upon the workings of their council. If their employment or their prospects of pension provision are going to be imperilled as a result of public service, that will diminish the pool of those willing and able to serve the public.

These proposals are another example of the Government’s—or more particularly, to be fair, the Secretary of State’s—aversion to local authority members. He has a rather Malvolian response to the criticism that he has brought upon himself over the past few years by his repeated attacks on local authorities and members generally. I recall that wonderful phrase in “Twelfth Night” when Malvolio, villainously cross-gartered—I cannot see the Secretary of State as cross-gartered, while “villainous” is an adjective that might be applied to other aspects but perhaps not his gartering —says in frustration and rage as a result of his treatment:

“I’ll be revenged on the whole pack of you”.

This recommendation certainly seems to carry that sentiment into government policy, and it is deplorable.