Public Service Pensions and Judicial Offices Bill [HL]

Lord Hope of Craighead Excerpts

2nd reading
Tuesday 7th September 2021 Lords Chamber

[Lord Hope of Craighead (CB)]

My Lords, the Bill affects many people in public service, but I hope that I may be forgiven for concentrating, like others, on the branch of the public service with which I am most familiar: the judiciary. So far as they are concerned, it seems to me that the Bill seeks to do two things that are to be welcomed.

The four noble and learned Lords who have spoken before me have said almost everything that could be said one way or the other, but I should like to stress one or two points. The first is the correction of the mistake that was made in 2015, when the new pension scheme was introduced, that applied to all members of the judiciary still in service, apart from those within 10 years of retirement. That scheme was significantly less advantageous because it was registered for tax purposes. That had very unwelcome consequences for those who had contributed to their own pension schemes while in practice. The prospect of the large and wholly unplanned-for tax bills that would be the result of becoming subject to that scheme was a severe disincentive.

I have experience of this—although the Bill certainly does not apply to me because I retired eight years ago. I made provisions at a very early stage in my career as a self-employed member of the Bar, with no prospect of becoming a judge at that stage, and indeed for a long time in my career. I sacrificed money that might have been used for other things to build up a reserve for myself and my family. This is what people had done, and now they were faced with these very unwelcome tax consequences—so it is no surprise that it was a disincentive, and it is right that the Government should seek to remove it. I also welcome the fact that the Government have decided, in this respect, to treat all members of the judiciary equally.

The legislation that we are presented with in the Bill is not an easy read, but the policy background is very clearly set out in the Explanatory Notes and the impact assessment, and I am also grateful to the Minister for his very helpful introduction. There is one aspect of the judicial scheme—the only one that will be available for everyone after 31 March 2022—which is especially welcome: the fact that the scheme will be unregistered for tax purposes. As I understand it, compensation is also being offered to those who incurred tax liabilities under the previous scheme—and that too is very welcome.

As has been pointed out, all eligible members will be able to opt for the scheme that is most beneficial to them under the options exercise that is to take place in the autumn of 2022. I hope that the Minister can assure the House that guidance will be offered to all those who are involved in that exercise in good time so that they may be fully informed before they take this decision. Guidance of that kind was offered in the past when I had to make that kind of choice, and it would be very helpful if the Government were to assure us that that will be done in this case.

I see this argument about pensions as the end of a long and, for some, very uncomfortable debate about how to balance the public interest against the reasonable expectations of those who have chosen to serve as members of the judiciary. I have been only on the fringes of these debates, but I wish to pay tribute to all those members of the Bar and the judiciary who have contributed to it, spending many hours, in many cases, in doing so.

The other thing that the Bill seeks to do—I follow the noble and learned Lord, Lord Mackay, and my noble and learned friends Lord Woolf and Lord Brown of Eaton-under-Heywood in welcoming this—is the reduction of the judicial retirement age to 70. The noble and learned Lord, Lord Mackay of Clashfern, may remember that some argued that it should be reduced to 65, but that step was fortunately not taken. But it was to overlook the benefits that come with experience.

I was one of those members of the newly formed UK Supreme Court who was able to continue to the age of 75. We tried very hard to persuade the then Government that that age should be retained for the Supreme Court justices—but without success. We pointed out that the new age limit would severely limit the time that some of our newer members could contribute to the work of our court, as was indeed the case, and that the rapid turnover that it would lead to was undesirable.

I noted with great care what my noble and learned friend Lord Etherton said about this, and his suggestion that there should be a phased increase in the retirement age. Perhaps I may continue for a moment or two to reply. The problem we have with legislation of this kind is that often one has only one opportunity. This is an opportunity that may not recur, and there will be consequences whatever happens. I give one example, which is now in the past: my noble and learned friend Lord Neuberger, who became president in 2012, had to retire in 2017, just before his 70th birthday, when he was still very much at the height of his powers. He was succeeded by my noble and learned friend Lady Hale of Richmond, who was already 70—but, because she had been appointed to the judiciary before the change, she could go on until she was 75. One can only guess at what might have happened if the change had been made before my noble and learned friend Lord Neuberger was due to retire.

There is just one other anomaly. There were different retirement ages depending on which part of the judiciary you were serving in. This Bill produces a single retirement age for everybody. As one who had to grapple with complaints about the differences in retirement age and the opportunities for service after retirement when I was Lord President of the Court of Session in Scotland, I very much welcome the uniform approach that this Bill now takes.

Public Service Pensions and Judicial Offices Bill [HL]

Lord Hope of Craighead Excerpts

Report stage
Monday 29th November 2021 Lords Chamber

[Baroness Janke (LD)]

My Lords, as we have heard today and previously, the implementation of this Bill is likely to be extremely challenging, including, I would say, for scheme members. Millions of public sector workers will be affected by this scheme, and the process will involve unpicking, administering and communicating with members. I believe that members will need a lot of help to understand what is happening and to make good decisions. It seems to me essential that we should include a requirement on the Government to plan and resource support systems to enable members to make the best choices, and to provide the same to trustees and pension schemes.

Time is short, so I will not go into great detail, but I would like to hear how the Government plan to support and advise the millions of scheme members who will be faced with life-changing choices as a result of the changes that have come forward through this Bill.

[Lord Hope of Craighead (CB)]

My Lords, I support this amendment. I raised the issue in my speech at Second Reading because I look back with gratitude to the guidance I received shortly before I retired as to the choices I had to make under the judicial pension schemes. I think my position was relatively simple compared with the position we have now, because there were two clearly expressed schemes, the guidance I was given was intelligible and I was happy to follow it. Of course, I was aware—as I am sure everybody would be under this new arrangement—that the choice I made was going to be irrevocable, and I had to be very careful to make the correct choice.

I cannot claim to have studied the impact of this Bill—and, indeed, all the amendments that have just come to the House today—but my impression is that the situation is a good deal more complicated than the one I had to deal with when I was on the point of retirement. There is a great deal of force in this amendment, and I am delighted that it has been brought back on Report so that we can have a full response from the Minister.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I pay tribute to the noble Baroness, Lady Janke, for tabling and introducing this amendment, to which I have added my name. I also thank the noble and learned Lord, Lord Hope, for giving it his support.

This is the issue which I think is really at the centre of deliberations on this Bill and planning for the introduction of the remedy: how information and advice are going to be provided to members. In Committee, the Minister agreed with the importance of this issue. He said:

“The Government recognise the importance of providing members with clear, accessible and accurate information.”—[Official Report, 11/10/21; col. 357GC.]


The Bill provides for remedial statements to be provided to all members, which in itself is welcome. Before the Bill reaches the House of Commons, I ask the Minister to consider carefully what practical, accessible and time-sensitive help there will be for a member who is struggling to understand the statement and the complex background which precedes it. As I asked in Committee, if a person has no idea what their statement means, how their pension has been affected and when they are likely to be required to make a decision, who do they call? Where do they go for practical advice?

The amendment also raises the question of compensation. The Bill provides for applications to be made for compensation, but what information will be circulated to ensure that impacted members are aware that they are eligible to apply?

These are the questions we have to get right to ensure that members can confidently navigate the remedy, which, not to remind the Minister of this too often, was due to a government error. I hope that the Minister can give a commitment to take this away and to look at what more could be done in the Bill to ensure that members are given first-class accessible support in navigating this complex issue.

--- Later in debate ---

[Lord Hope of Craighead (CB)]

My Lords, I too believe that the Government have made the right choice in going to 75 in one go, as my noble and learned friend Lord Etherton put it. We have to bear in mind that what is being suggested is a maximum; I think my noble and learned friend Lord Brown was making that point in passing in what he was saying a moment or two ago.

I am not sure that the examples that my noble and learned friend Lord Etherton gave of people going on until 70 is a very sound guide as to how people will behave if the age is raised to 75, for the very particular reason that a factor that someone has to bear in mind in choosing the age of retirement is whether he has served long enough to earn the full judicial pension. In my day, you had to serve for 15 years; now, you have to serve for 20. For those who have gone on to the Bench in their early 50s, the age of 70 does not give them long enough. When they reach the time when they have achieved that, they may well take the decision to go then, rather than going on for the extra few years, because they have actually earned their full pension. So we are, to a degree, in an area of speculation. We are having to consider human behaviour and how people will behave in view of the two choices of age that we are being given.

We are also contemplating human behaviour in the problem of diversity. I pay tribute to what my noble and learned friend Lord Etherton was saying about the need to increase diversity at all levels on the Bench. I had the responsibility for a while, as Deputy President of the Supreme Court, of being on a commission considering applicants for the position of justice. One of the issues that concerned us at the time was the lack of diversity in the applicants coming before us—a point that I think has been hinted at by my noble and learned friend Lord Brown of Eaton-under-Heywood. Again, we are trying to speculate about human behaviour. There is an immense amount to be said for the diversity element, but I do not think one can be sure that choosing 75 instead of 72 is going to be as damaging as has been suggested.

As for the in-one-go point, I think my noble and learned friend Lord Etherton was referring to me when he mentioned someone who said at Second Reading that the opportunity to legislate on this issue comes quite seldom. I would be concerned, if we were to settle on 72 this time, as to when one would ever get back to the age of 75. As it happens, the Bill has enormous importance behind it because of the need to deal with pensions, which is a pressing issue. It has been possible to bring in the retirement age element and other parts of the Bill because the Bill is already there and the issue fits quite neatly with its broad aim and subject matter. How soon could we be sure that we could ever get back to this issue? For that reason too, the in-one-go point has a lot to commend it.

There is even more to be said for the points made by my noble and learned friends and the point that we are dealing here with an element of speculation, since we are setting a maximum age, not a compulsory one, and it will have the benefits that have been referred to. I believe the Government have made absolutely the right choice here.

[Lord Mackay of Clashfern (Con)]

My Lords, I am in the rather unusual position of having brought the judicial retirement age down, all those years ago, to 70 from 75. Your Lordships will remember that 75 was a fairly recent innovation because, originally, judges were appointed for life, and if they did not care for resignation, that sometimes meant fairly long periods in office.

I am very given to wishing for diversity on the Bench, and I realise what the authorities responsible for appointments have done over the past few years. I do not think the noble Lord, Lord Ponsonby, or the noble and learned Lord, Lord Etherton, can be sure that if they get 72 instead of 75 there will be an increase in diversity on the Bench. I had a great deal of experience—it is a long time ago—of trying to work with the ethnic minorities to improve their chances of getting to the top. Indeed, the death of one of those appointments—Mr Kadri, the first Muslim Silk who originated from Pakistan—was reported just the other day. During my time in office, I struggled to bring up the standards of ethnic minorities at the Bar because I felt that was the way to build up a chance of diversity. One of the difficulties in doing that was getting the arrangements needed for that purpose. I was of the view, and am still, that the best chance for ethnic minorities is not Chambers that are entirely of an ethnic minority but diverse Chambers with people from different backgrounds. That has happened to a considerable extent in recent times. It has produced some ethnic-minority members on the Bench, although nothing like as many as I would have liked.

I am convinced that the situation is very different now from what it was 27 years ago, as the noble Lord, Lord Ponsonby, said. Just after the Supreme Court was set up, the noble and learned Lord, Lord Irvine of Lairg, and I wrote to the then Lord Chancellor suggesting that the age limit for Supreme Court judges should be raised to 75 from 70 to accommodate for a reasonable length of time some of those who were there and had the potential to be very good examples of service in the Supreme Court. I am not sure that diversity has necessarily increased very much since then. It is perhaps worth my commenting that the President of the Supreme Court and the Deputy President of the Supreme Court are from Scotland. That is a very important move, although it is not in the way of diversity. It shows that those making the appointments are doing their best to secure the best quality they can at this time. However, it is important to do everything we can to raise the quality of those who are thinking of going to the Bench.

I do not know on what basis the noble Lord, Lord Ponsonby, and the noble and learned Lord, Lord Etherton, whose experience and position is a matter of great importance so far as I am concerned, know that if this is left at 72 there will be greater diversity than now. The people making appointments are as keen on diversity as we are, but they find it difficult in the context in which they are working to bring it forward. I do not believe that it is at all likely that 72 will be more fruitful in that respect than 75. There is no doubt in my mind that going to 75 will increase the possibility of people in senior positions at the Bar taking the appointment. That is one of the things that I realised. The reason is simply that, as has been pointed out, the pension is important in these situations. People who are at the top of the profession are rather unwilling to take a judicial appointment unless they have a pension that encourages them to leave the Bar, with what they are making. I support this move to 75 very strongly, although I know it reverses what I did all those years ago.