Restriction of Public Sector Exit Payments Regulations 2020

Lord Tunnicliffe Excerpts

Wednesday 23rd September 2020 Lords Chamber

[Lord Tunnicliffe (Lab) [V]]

My Lords, public sector workers carry out vital work each and every day. Over the past six months, their importance has become ever more apparent as they have provided the essential services that have kept the country running. To introduce these measures at a time when we appear to be entering a second wave of Covid-19 is not only unnecessary but, frankly, extraordinary.

The Government claim that the regulations are about ensuring value for money when spending public funds. That is a noble cause, and the Labour Party certainly does not believe in huge public sector exit payments for the sake of them. However, we have fundamental objections to how this policy is being implemented. It does not appear to be fully thought through.

We are told not to be concerned as the vast majority of those affected by the cap will be those who are highly paid. Indeed, the manifesto commitment was clear: the cap was for “the best paid public sector workers”. However, it is simply not the case that only high earners will be affected. Contrary to previous promises, the cap will quite easily capture midwives, social workers and librarians who have served their communities for decades and who, when nearing retirement, happen to find their employment being terminated through no fault of their own. Does the Minister really think it is fair to arbitrarily limit the settlement that these workers would receive?

Noble Lords will be aware that there is no index-linking on the cap, meaning that the threshold will slowly reduce in real terms. The figure of £95,000 is the same amount floated by the Government back in 2015. How does the Minister justify the decision to set the limit at this level, which represents a real-term decrease on when the policy was announced?

Paragraph 10.4 of the Explanatory Memorandum mentions the introduction of a new waiver system

“for use in exceptional circumstances”.

How will this operate in practice? Will figures relating to its use be published and, if so, in what form? Paragraphs 10.6 and 10.7 outline two options—an earnings threshold and a phased implementation—which were considered by the Government but either not consulted on or not taken forward. Does that not suggest that the 2019 consultation and the department’s meeting with the Trades Union Congress were mere box-ticking exercises rather than an attempt to find a mutually agreeable way forward?

The Scottish Government took the decision not to include pension strain costs when implementing a similar regulation. The UK Government’s decision to include such costs means that the regulations are likely to affect far more people than might have been expected. Has the department undertaken modelling on this point, and if so, what was the outcome?

I understand that no equality impact assessment was undertaken for the scheme, which strikes me as problematic. While the judiciary is excluded, staff of the Crown Prosecution Service are included. Can the Minister confirm whether his department looked at the demographic profiles of staff in these different elements of the justice system before that determination was made?

I hope the Minister can also provide a justification for including nuclear decommissioning workers within the scope of the regulations. He will know that such workers are often employed by private sector organisations which assist in the realisation of public policy. Why should the Government interfere in the redundancy arrangements of such workers, when their very success is defined by making themselves redundant?

We will not be formally opposing this instrument, as it is not the role of your Lordships’ House to do so. However, I simply cannot understand why the Government have decided to proceed now when there is more work required, and at a time when implementing this change will send such a negative message to the public servants we rely on. Just yesterday, the Prime Minister talked of how our collective compliance with the coronavirus guidance forms a protective ring around the NHS and other public workers. Why, then, is the Minister still seeking approval for an instrument that would unfairly penalise thousands of them? I hope he will urge his colleagues to pause this process, think again and do the right thing by those who were never supposed to be subject to this arbitrary cap.

I have dealt with many statutory instruments, and I have rarely experienced such unity among those taking part. The important point about this unity is that the individuals involved all have in-depth understanding of this environment. The hostility to these regulations surely should cause the Minister to pause the process, think again, take account of all the points made today and bring these regulations back in a much healthier form.