Judicial Pensions (Remediable Service etc.) (Amendment) Regulations 2023

Lord McNally Excerpts

Wednesday 10th January 2024 Grand Committee

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Bellamy) (Con)]

My Lords, your Lordships last considered matters relating to judicial pensions following the McCloud judgment on 15 June, when the Judicial Pensions (Remediable Service etc.) Regulations 2023 were before them. On that occasion, in answer to a question from the noble Lord, Lord Ponsonby, I said that I hoped your Lordships would not be troubled by this matter again. Unfortunately, a small technical point has arisen on those 2023 regulations that we were then considering; these amendment regulations address that point. Perhaps I could briefly explain.

As your Lordships may recall, in 2015 the Government introduced new pension arrangements across the public sector following a report from the Public Services Pensions Commission. As far as judges were concerned, the new arrangements were set up in the Judicial Pensions Regulations 2015, which I will refer to as the 2015 scheme. Those aged over 55—that is, those approaching retirement —were allowed to remain in their previous legacy schemes and were not required to join the 2015 scheme, as every other judge was required to do.

Those judicial arrangements were then challenged by younger judges who said that they were victims of age discrimination in being required to join the 2015 scheme without the option to remain in their previous legacy schemes, which were supposedly more favourable. The challenge succeeded in the McCloud case in 2018 so, after various consultations and actions, Parliament passed the Public Service Pensions and Judicial Offices Act in 2022; in effect, it remedied the McCloud judgment by giving everyone the option to choose between their previous legacy scheme and the 2015 scheme. I understand that around 3,000 judges were affected by the McCloud judgment and that the process of allowing them the option to choose is currently in train and is so far proceeding according to plan. However, a group that apparently numbers between 30 and 50 judges has a particular situation: largely prior to the McCloud judgment, they made payments into the 2015 scheme. Typically, it was top-up payments, pension transfer payments or other supplementary payments.

However, as it turns out, through the effect of the McCloud judgment and what is thought to be the effect of Section 61 of the Equality Act, they were never technically in the 2015 scheme. In law, they always remained in their legacy schemes, so what is the status of the payments that were made into the 2015 scheme to which these judges did not, in law, belong? It is simply to correct that issue that these regulations are being put before your Lordships.

Effectively, the regulations simply say—one sees it in particular on page 2 of the regulations in the new Regulation 38A, which is introduced into the 2023 regulations—that the value payments made into the scheme are referred to as purported value payments and are to be treated as having been received by the scheme. Although there was doubt about whether they could be received by the scheme, this now deems them to be treated as having been received by the scheme. There are similar parallel provisions in relation to the various kinds of transfer payments that we are referring to.

That is, as I understand it, the essential purpose of these regulations: simply to tidy up a point. I have to say that it is not a particularly clear point, but the Government feel they should make assurance doubly sure by putting that matter beyond argument.

Finally, another group of judges numbering no more than three, I gather, benefit from an earlier judgment—the O’Brien judgment—which said that fee-paid judges were actually entitled to a pension. Those judges similarly made some payments into the 2015 scheme and the question is about the exact status of those payments. These regulations again provide that those payments are deemed to be in the 2015 scheme. I know there is a famous phrase that we have too much damned deeming going on in the legal system, but this is simply there to clarify the position.

Unless I have omitted some fundamental point or made any misstatement, that is the essential purpose of the regulations and I beg to move.

[Lord McNally (LD)]

My Lords, it is a great pleasure to follow the noble and learned Lord, Lord Bellamy. I held his position in the Government between 2010 and 2013. I became Minister of State at Justice with the now noble Lord, Lord Clarke—Ken Clarke—as Lord Chancellor. One of our first visits was to go across Parliament Square to pay a courtesy call on the Supreme Court. He was, of course, in his element as a QC and a former Home Secretary, but I was filled with trepidation when soon after we arrived three Supreme Court judges bore down on me, clearly to seek some discussion on some high point of law—some difficult and abstruse point. I need not have worried: what they wanted to press me on was judicial pensions. There was some passion in that. I remember one of the first stages in the coalition Government, which probably ended up in the 2015 Act, was to try to address the various anomalies and uncertainties in judicial pensions, so it is with a sense of closure that I come this afternoon to support what the noble and learned Lord memorably described at an earlier stage as

“44 pages of the densest technical complexity one could imagine”.—[Official Report, 15/6/23; col. GC 375.]

Why am I not surprised that that should be the legislation dealing with judges’ pensions?

I am sure that we share with the Minister the hope that this is the final tweak to the regulations. In voicing our support from these Benches, I ask him how the regulations fit in with the more general objectives of judicial reform. Will we see a judiciary—particularly a senior judiciary—more diverse in social, gender, ethnic and educational background than hitherto has been the case? Does the Minister agree that it is important that our legal system should as much as possible reflect the society it serves? There is much to admire in the intellectual quality, integrity and independence of our judiciary. Its members are most certainly not “enemies of the people”, but they must not be seen as a Brahmin caste, separate from society as a whole.

The direction of travel in recent years has been slow but steady. I hope that a sensible and secure pension scheme will underpin the flexibility and social mobility necessary to retain confidence in and respect for our judiciary.

[Lord Ponsonby of Shulbrede (Lab)]

My Lords, I too remember when the noble Lord, Lord McNally, had his time in office as a Minister of State.

[Lord McNally (LD)]

The noble Lord was a lot of trouble.

[Lord Ponsonby of Shulbrede (Lab)]

Well, one of my roles is to be a lot of trouble—although I will not be a lot of trouble in this particular debate.

The noble Lord spoke about the Supreme Court judges talking with passion about judicial pensions. As a lowly magistrate, I have sat in magistrates’ retiring rooms with district judges, and I can say that they talk with equal passion about judicial pensions—I have heard about it for a number of years. A number of them are of course part-time district judges, and the matter is of great importance to them.

The noble Lord said that he approaches this debate with “a sense of closure”. I think that everybody hopes for a sense of closure on this issue, so the first question that I put to the Minister is: are we right to think that this is the last time that we will hear about this issue? It would be interesting to hear his reflection on that.

Previously when I have taken part in these debates, I have had sitting behind me my noble friend Lord Davies of Brixton, who is an actuary and an expert on these matters. The particularly interesting question that the noble Lord, Lord McNally, raised was on how these pension reforms will fit in with the wider objectives for the judiciary as a whole in building diversity and flexibility and other desirable objectives, which will affect pension entitlements, one way or another. If the Minister could say something about this in the wider context, that would also be of interest.

I have a further question about the likely timetable for implementing this remedy. Is it already under way and when might it be complete? A final question is on whether any judges would need independent advice on whether they should accept these proposals. Is it their responsibility to get their own independent advice? I do not know how that works. Is there an expectation that judges should take independent advice before receiving these pensions?

Other than that, we clearly support the measures as far as they go. I look forward to the Minister’s response.