Lord Wallace of Saltaire
Main Page: Lord Wallace of Saltaire (Liberal Democrat - Life peer)Superannuation Bill
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Lord Brett
My Lords, Amendment 1 stands in my name and that of my noble friend Lord McKenzie of Luton. As my noble friend Lord McKenzie said in Committee, this is a straightforward amendment designed to clarify the purpose of consultation, emphasising that consultation should aim to reach agreement. In Committee, the Minister expressed reservations that this amendment was drawn too widely in respect of the 1972 Act, but recognised that the Government’s aim, like that of the previous Administration, was to seek to reach agreement by consensus where possible. There have been discussions between the Civil Service trade unions and Ministers in this respect and the Government have now submitted Amendments 2 and 4, which are grouped with Amendment 1 and which I take to be an endeavour to offer the reassurance sought in Amendment 1. While I clearly prefer the simplicity of our amendment, I await the Minister’s arguments in support of his amendments with interest. I hope that our thinking is as one, even though our amendments may use different language. I beg to move.
Lord Wallace of Saltaire
My Lords, it may be helpful if I begin by reminding your Lordships of the main outcome that the Government are seeking to achieve in securing agreement to this Bill, which is to enable necessary reform of the Civil Service Compensation Scheme. Our goal in effecting this reform is to put in place a scheme, following consultation with the Civil Service trade unions, that is affordable, sustainable for the long term and fair not only to civil servants but to other taxpayers. This is not an initiative of this new Government but an issue that we inherited from our predecessors. Indeed, the previous Government negotiated for 18 months with the Civil Service trade unions and had a scheme to propose in February this year, which was then challenged by one of the unions and struck down in a judicial review.
I have described previously the intensive discussions between the Government and the Civil Service unions since my right honourable friend the Minister for the Cabinet Office, Francis Maude, announced on 6 July his intention to push through reform of the compensation scheme. Since Grand Committee, which took place three weeks ago, some of the unions have begun to ballot their members on a new scheme based on the agreement reached on 5 October between the Government and the negotiating teams of five of the six Civil Service unions.
The key elements of the new scheme that we propose to introduce include: a standard tariff for compensation payments; an entitlement for a three-month notice period on redundancy, whether voluntary or compulsory; significant protection for lower-paid civil servants; limitations on payments to higher-paid civil servants; and, lastly, the ability to access an unreduced pension for staff who have reached minimum pension age.
The Government listened carefully to points made by those noble Lords who spoke in Grand Committee about the purpose and structure of the Bill, as well as underlying concerns about how reform of the scheme would be achieved. We have brought forward some further amendments, which we believe address these points, as I will explain in due course. I hope that we will be able to use this Report stage to ensure that the Bill meets our goals of supporting a new, affordable, fair and sustainable compensation scheme and of providing that the Civil Service and the Government are not left in limbo over the reform of this scheme.
In speaking to Amendment 2, I will also address Amendment 4, which is simply a consequential drafting amendment, and respond to the points raised by noble Lords opposite on Amendment 1. Indeed, these government amendments are specifically intended to respond to the identical amendment that the Opposition tabled for Grand Committee and to the discussion that followed about the way in which consultation should be carried out.
Amendment 1 would insert into the Bill the words,
“with a view to reaching agreement”,
in references to consultation on schemes under Section 1 of the Superannuation Act 1972. It would in practice render my Amendment 2 unnecessary, as it covers the substance of my amendment and much more besides. That is why the Government have brought forward Amendment 2, to address the specific issue of consultation on the compensation schemes that are covered by this Bill.
The Grand Committee agreed to amendments that I had tabled to deliver the undertaking made in another place to reinforce the requirement for meaningful consultation with the unions before any compensation scheme is imposed. Those amendments inserted what is now Clause 2 of the Bill. The coalition Government firmly believe that a requirement to consult already carries with it the implication that the consultation must be genuine and that proper consideration must be given to the response. However, we were happy to set out in primary legislation our commitment to meaningful consultation, which we have also reiterated in both Houses of Parliament.
It is also the intention of this Government that any consultation that we carry out under the 1972 Act would be begun with a view to reaching agreement. Clause 2 already uses the words,
“with a view to reaching agreement”,
in respect of the report that the Government will in future be required to lay before Parliament about changes to the scheme. The noble Lord opposite pressed me in Grand Committee to make our intention clear in the Bill and to apply the same words expressly to the requirement to consult.
I do not think that there is much between us as to the aim and purpose of these amendments. However, as I explained in Grand Committee, the Government have reservations as to the breadth of the scope of the amendment from the noble Lords opposite. It would take us very much wider than the process of changes to Civil Service compensation, which is the key purpose of the Bill. Amendment 1 would in practice apply also to schemes in relation to pensions and injury benefits, which are subject to different regimes for consultation and agreement and which we have not otherwise considered in this Bill. The Government were therefore not able to accept the amendment in Grand Committee and this has not changed.
Nevertheless, I have reflected carefully on the points made by the noble Lord, Lord McKenzie, in Grand Committee. He said then that it should not be contentious to seek to emphasise that the aim of consultation should be for it to lead to agreement. Indeed, the Government would not wish to contend with that view. I also understand that inserting the wording,
“with a view to reaching agreement”,
explicitly into the requirements for consultation in the 1972 Act is seen by the Civil Service trade unions as an important indicator of the Government’s good faith in continuing to try to find agreement through negotiation. I have, therefore, brought forward Amendment 2, which relates, like the rest of Clause 2, to any cases where changes are proposed that would reduce the value of compensation benefits, in order to address that point. It will not have the effect of restoring the union veto on reform, which Clause 1 will remove, and it will not apply, as Amendment 1 would, to consultations on the much broader range of schemes covered by Section 1 of the 1972 Act. Those extend beyond the main business of the Bill, which we have had the opportunity to discuss in detail. However, it will make it absolutely clear that the Government will now have a duty to consult with a view to reaching agreement where there is any future proposal that would have the effect of reducing the amount of compensation benefits payable to civil servants.
I say to the noble Lord, Lord McKenzie, that I was persuaded by his arguments in Grand Committee but that, for the reasons that I have explained, I still prefer the approach in the Government’s amendments. I hope that noble Lords are persuaded, as I have been, that this amendment rounds out and reinforces the statutory commitments to meaningful consultation on compensation schemes. I also hope that it succeeds in meeting the substance of the genuine concerns raised by noble Lords opposite and that, therefore, they will agree to withdraw the amendment.
“( ) After subsection (3C) insert—
“(3D) So far as it relates to a provision of a scheme under the said section 1 which would have the effect of reducing the amount of a compensation benefit, the duty to consult in section 1(3) of this Act is a duty to consult with a view to reaching agreement with the persons consulted.””
Lord Brett
My Lords, Amendment 3 stands in my name and that of my noble friend Lord McKenzie. Clause 2, as amended in Committee, requires the Minister to lay certain information before Parliament regarding the consultation undertaking in respect of the new Civil Service Compensation Scheme prior to the scheme coming into operation, with such information to be limited to information that the Minister considers appropriate. Again, we believe that that undermines confidence, as many people feel that it might be misused to withhold from Parliament information that would be influential in the subsequent discussions and debates that might take place.
We believe that constraining the information in such a way is unnecessary and will certainly not engender the confidence in the consultation process that I think everyone involved wants to see. I do not say that such is the Government’s intention, but unfortunately the wording in its present form to some degree undermines the confidence that we seek to restore. Our amendment seeks to remedy the situation by removing the ministerial discretion to limit the information. I trust that this will not be considered controversial and that the Minister will not feel the need to resist Amendment 3. I beg to move.
Lord Wallace of Saltaire
My Lords, we had a useful and constructive discussion on this in Grand Committee and I was persuaded by the strength of the argument put forward by the noble Lord, Lord McKenzie, at that time. We took the matter back and discussed it and now wish to accept this opposition amendment.
There was a perfectly good reason for the original wording that the noble Lord now proposes should be removed. It was simply intended to clarify that there might need to be some discretion about what precisely would be included in the published report of the consultation that had been carried out with the Civil Service trade unions. For example, some details might need to be omitted on the grounds that they should be held in confidence, such as a negotiating position set out by a particular union during the consultations that it asked should be treated in confidence.
However, I agree that it is unnecessary to insist on this wording as to what constitutes information. The report will be produced by the Minister for the Civil Service and will, in any event, include only information which he considers appropriate and which does not breach confidences from the negotiations. I agree that this need not be spelt out in the Bill, so I am happy to say that, with what I hope the Opposition will accept as good grace, the Government accept the amendment.
Lord Maclennan of Rogart
My Lords, I thank the noble Baroness for moving the amendment and I join the noble Lord, Lord McKenzie, in sending good wishes to the noble Baroness, Lady Turner. However, I fear the amendment as drafted goes too wide, as was implicit in the remarks made by the noble Lord, Lord McKenzie. It might have the effect of reinstating the veto, which it is the purpose of this Bill in large measure to withdraw. I am glad to recognise what was said in another place by Tessa Jowell and the inconsistency of that, as I see it, with the amendment tabled.
Lord Wallace of Saltaire
My Lords, I join other noble Lords in sending our best wishes to the noble Baroness, Lady Turner of Camden. I served on a committee with her when I first became a Member of this House and have been very fond of her ever since. We look forward to having her back with us. She played a useful and constructive role in our Grand Committee discussions.
In Grand Committee we discussed the question of the balance of pay with trade unionists and I remarked at the time that we need to understand how many low-paid civil servants there are and to construct a scheme which is as fair as possible to the lower-paid. As the noble Baroness will know, one of the elements of this scheme is that all those earning under £23,000 who are offered redundancy will be treated as if they were earning £23,000. So built into the compensation scheme are limitations for the small number of civil servants who are paid £150,000 or above and much greater benefits for that large number of civil servants who earn below the medium wage. I hope that this has the sympathy of all Members of the House because it is part of what this scheme is intended to achieve.
Although this amendment seeks to amend Clause 3, to some extent it contradicts Clause 1, as the noble Lord, Lord McKenzie, pointed out. The Government are not therefore able to accept it as it is not entirely clear what its implications would be. As I have already made clear, the Government are committed to full consultation with the Civil Service trade unions over the long term. However, the recent history of changes proposed to the Civil Service Compensation Scheme both by the previous Government and by the coalition Government shows that a requirement to reach agreement can lead to stalemate where the Government of the day are unable to implement the changes that are necessary or agreed with the majority of unions.
So in practice the drafting of the amendment may not have the effect that the noble Baroness, Lady Turner of Camden, would want it to achieve. It does not just apply to changes in the compensation scheme but rather to the scheme as a whole. I am sure I do not need to tell noble Lords that the Government would not want this to be the case. Nevertheless, I appreciate the opportunity that the noble Baroness’s amendment provides to emphasise yet again our commitment to meaningful consultation and our determination on the other hand not to allow any union to have a complete veto over changes that may be proposed to the Civil Service Compensation Scheme. This is an important point which we take as seriously as the noble Baroness does and we are determined that it is the lower paid civil servants who will have the most generous benefits, as we have proposed in the current scheme. We have therefore pushed this scheme forward and are puzzled by the resistance of one of the unions to a scheme that seems to us to be better for the lower-paid than the alternatives that that union seems to prefer.
The Chairman of Committees (Lord Brabazon of Tara)
I understand that there is a mistake in Amendment 6 as printed in the Marshalled List. Instead of “(2) to (ii)” it should read “(2) to (11)”.
Lord Wallace of Saltaire
My Lords, I appreciate that we will come on to caps in a later amendment, so it is a little difficult to know whether to respond in detail now or to leave it to later. We discussed this delicate set of issues quite extensively in Grand Committee, and I subsequently set out in a letter, which the noble Lord, Lord McKenzie, has mentioned and which has been placed in the House of Lords Library, that I wished to avoid being in the position that followed the High Court’s judgment of May 2010, which resulted in the February 2010 arrangement being squashed and the pre-February scheme being largely revived. I reiterate our strong intention to ensure that the proposed new scheme is legally robust and our consequent view that the scheme would ultimately survive any legal challenge.
Nevertheless, it is open to anyone to seek to challenge the scheme now or in the future, regardless of whether their intention is rational or their arguments are ultimately found to be meaningful by the courts. Such a challenge could result in the scheme being suspended until due legal process has been pursued. The Government take court rulings very seriously; we would always give the most serious consideration to court judgments and would certainly take the necessary steps to take account of any final ruling. As I previously explained, the question that arises is what the default position should be during any period of uncertainty caused by litigation. The Government continue to believe that it is right that Parliament, a democratically accountable body, should decide in an Act of Parliament what the default position should be, and that is the reason for Clause 3 as it is currently drafted.
I do, however, feel certain that a court would have views of its own about an Act of Parliament containing the approach set out in Amendment 6. This seeks, in effect, to oust the court’s power to strike down a scheme, an approach which the courts have often felt to be misconceived and on which the Government would not therefore be confident to rely. I also note that the drafting of the amendment is a little vague, which would not be helpful in conveying to a court a clear meaning of Parliament’s intent. For example, given all the opportunities for appeal or for proceedings to be taken on to the European Court, how could anyone be certain that the “final determination” has been made? Even if the intention and the process could be made sufficiently clear, I am not convinced that a court would always accept that a compensation scheme that is being challenged qualified as a scheme that should remain in place during that challenge.
I emphasise once again, as we did on several occasions in Grand Committee, that the coalition Government hope not to need to use the powers in Clause 3, nor the powers in Clause 4 that support them. What we want is a new, reformed, sustainable, affordable and fair Civil Service Compensation Scheme that can be implemented once this Bill has received Royal Assent and which will mean that we will never need to use the caps in Clause 2. If we are taken to court and therefore need to fall back to a provision that means that the necessary reductions in the Civil Service workforce can be made without disproportionate cost and perverse effects, it is more reasonable to rely on such caps than on a clause that attempts pre-emptively to bind the court.
We shall shortly have the chance to discuss Clause 3 again as drafted, along with the provisions in Clause 4 that provide for the repeal, extension or revival of Clause 3. I do not think it would be right for us to agree to an amendment that might be interpreted by some as seeking to constrain the powers of the courts. So, for the reasons that I have given, I hope that the noble Lord will withdraw his amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for his explanation of why the Government are unable to accept this amendment. As I explained when I introduced it, we did not propose to test the opinion of the House, but simply to probe alternatives to the use of the caps as the default position. With respect, the Minister has said why he does not like our formulation, but he has not dealt with the point about what formulations other than the caps have been considered to create the certainty that he seeks and considers is necessary in circumstances where there is a challenge. We do not object to Parliament deciding in an Act of Parliament what that default position should be.
I take the point that the formulation of our amendment could be seen as seeking to oust the power of the courts.
Lord Wallace of Saltaire
My Lords, the noble Lord opposite has raised a wide range of issues about the Bill. I recognise, again, the concern that a lot of civil servants have about the caps—perhaps on the misunderstanding that these are the only thing on offer. The Government have made it clear—and I will spell this out in answering a later amendment—that it is their intention to be more generous than the minimum caps expressed in the Bill. I remind noble Lords that Clause 3(11) gives the Government power to increase the compensation scheme but not to decrease it.
As noble Lords will recognise, the Bill at various points goes rather deeply into the relationship between Parliament and the courts. To anyone who would like to sink even more deeply into that area, I can recommend the evidence being given by various law professors to the European Scrutiny Committee in another place, where the doctrine of parliamentary sovereignty and the extent to which it depends on court rulings are being discussed in absorbing but extremely lengthy detail.
Today, the Minister for the Cabinet Office wrote to the chair of the Joint Committee on Human Rights. That letter will be in the House of Lords Library by the end of today; I hope that it will also be copied to noble Lords opposite. Perhaps it would be helpful if I read out two paragraphs from it. They state:
“I welcome the Committee’s acknowledgement that measures interfering with the peaceful enjoyment of possessions are capable of being justified by a sufficiently compelling public interest provided the interference is not arbitrary, is proportionate and does not affect the very substance of the right … Your report goes on to say that in the context of economic and fiscal policy generally, the European Court of Human Rights allows a considerable degree of latitude to States in deciding what is in the public interest, and that it is reluctant to interfere with that judgment unless it is manifestly without reasonable foundation. You also note that the European Court of Human Rights has generally been deferential to arguments of fiscal necessity although it has carefully preserved a scrutiny role and made clear that even interferences which are justified by fiscal considerations must not be arbitrary or so excessive that they remove the very essence of the right. As both this Government and its predecessor concluded, the current scheme is simply unaffordable for the taxpayer and over-generous when compared with comparable schemes elsewhere”.
I reiterate the point that the caps that Clause 3 sets out on the value of benefits under the Civil Service Compensation Scheme are a fallback. I have just explained that the Government are not persuaded that there is a better way to provide it. There is broad agreement that the compensation scheme must be reformed. Your Lordships will appreciate that, after two years of negotiation, we now need to proceed with a new scheme with some urgency, not only because the economic situation requires it but because civil servants will become even more anxious if the current uncertainty remains for longer.
The retention of Clause 3 means that a failure to implement a new scheme would prevent government departments making the changes to their workforce that they need to make for the future as well as now. The clause guards against a situation in which we would have no choice but to revert to the old scheme, which is, as I have said, unaffordable, unsustainable and out of place.
I appreciate that the other amendments which are grouped with Amendment 7 are consequential on it, since, if Clause 3 were not part of the Bill, much of Clause 4 would also not be needed. None the less, I am well aware that there is also concern about the power in Clause 4 to extend or revive the caps in the Bill, particularly some of those that would be among those deleted by Amendments 9 and 10. As Members who have read their Marshalled Lists will note, I have already put down amendments, which I hope we will have the opportunity to discuss later, which seek to respond to points made in this House and the other place about some of those delegated powers.
The Government are determined to ensure that there is certainty that a new and affordable compensation scheme can be put in place. I very much hope that that is the consensus among all your Lordships. The Government remain convinced that Clause 3 and the provisions that support its variation are the appropriate and proportionate way to secure that certainty. For these reasons and all those that I have previously given, I ask the noble Lord opposite to withdraw Amendment 7. I repeat that I shall say something further on a later amendment about the way in which we hope to provide a more generous compensation scheme.
Lord McKenzie of Luton
I thank the Minister for what he said in his response, although it does not take us far enough. I look forward to what he has to say on subsequent amendments and look forward to reading a copy of the letter from the Minister for the Cabinet Office.
From what was quoted from that letter, it did not seem to deal with the particular point about the caps being arbitrary and disproportionate. The Government in their own language have talked about them as blunt instruments and have identified them as a minimum and as a starting point for negotiations. The Government themselves have, in agreement with most of the trade unions, developed a scheme which is substantially in excess of what those caps provide. The very existence of those caps, according to the JCHR—and one can see the reasoning—are a threat to the compatibility of the policies with the convention. It does not help the Government’s case at all to retain those caps. On the basis of what the Minister argues, is it not the case that it would take only one person to appeal the new scheme for the Government to consider imposing the caps? They would remain an ever present threat for all of our civil servants while that is under way. That is one of the reasons why they should go from the Bill.
I can see from the Minister’s face that I am unlikely to convince him and to cause him to change his mind immediately. What I need to do is to test the opinion of the House on this matter.
Lord Wallace of Saltaire
My Lords, the Opposition wish to cast me—or the Government—as Scrooge, or I believe it is the Grinch that the younger generation talk about. The idea that the Government are looking for the opportunity to dismiss huge numbers of civil servants between 23 December and 10 January is an interesting but an unlikely one—indeed, an unreal one. The Government are still looking to lay the new scheme on the second sitting day following Royal Assent. An order to move the caps would be laid in the first sitting day following Royal Assent, which would have advice issued on the operation of the cap by the Minister to the department. As we have already said, we would be minded to increase the level if no agreement has been reached. As the noble Lord has already remarked, a number of unions are already balloting their members on the scheme that has currently been offered, with the negotiation and participation of several of the unions concerned.
One Government or another have, for two years or more, been negotiating on this scheme. Further delay does not seem desirable. I offered repeated assurances about the Government’s purpose in retaining, and our intentions on using, Clause 3 in the Bill—whether there might be some circumstances in which, for whatever reason, the new scheme could not be implemented. We do not see a justification for any further delay. I am not persuaded that we should accept Amendment 8 or any other proposal to further delay any part of this package. The Government are able to carry through the implementation rapidly. Members will understand that government, as well as Parliament, tends to slow down a little over the Christmas and new year break. If these matters are not completed by the time we rise on 22 December, action will be taken very quickly when we all return on 10 January. It is not an enormous delay and I therefore do not see the necessity of the amendment. I therefore ask him to withdraw it.
Lord McKenzie of Luton
My Lords, I thank the Minister for his response but it does not altogether deal with the issue that I seek to raise in this amendment. I can see that if the new scheme proceeds very quickly in early to mid-January, there is a limited window within which my concerns might arise. However, as I understand it, there is no certainty that the date will be the middle of January; it could be later. We do not know what will happen with the trade union ballots and whether that may affect the Minister’s view. This is absolutely not about delay because it does not touch on the date for the introduction of the scheme; it is about seeking to align the time at which the caps bite with the scheme, otherwise you would have a period in which the caps drove the compensation scheme, and that is a cause for concern.
I can see that encouragement and guidance might be given but, at the end of the day, departments are their own masters in this matter and in circumstances where departments are faced with very squeezed budgets the measure could give rise to difficulties. If the scheme is laid on 10 January—I think that is what the noble Lord suggested—I accept that there is only a very narrow window. If there were to be a wider gap—I think that this is taking us on to the next amendment—one way the Government might respond would be to increase the caps under Clause 3(11). That would certainly help to ameliorate the issue but not deal with it completely. Perhaps we should await the debate on the next group of amendments, but the Minister might reflect further on this. I hope that he will be as specific as he can on the record—if not today, perhaps at Third Reading—on a not insignificant gap opening up between the date that the caps come into effect, the date that the scheme is laid and comes into effect, and the Government’s response to that. That would be helpful because, as I say, we have identified a genuine concern. I am grateful to the noble Lord, Lord Maclennan, for recognising that concern. I am happy to leave it at that for now but ask the Minister to reflect further on this to see what reassurance he can give on the record in the event of the gap widening. Subject to that, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
My Lords, in moving Amendment 11, I shall also speak to Amendment 12. We have been unsuccessful in deleting Clause 3, although we expect it to be repealed at some stage before the new scheme is introduced. The Minister has confirmed that that is the case. Government Amendments 13 and 15, which we will support, mean that Clause 3 can be revived for a period of up to six months, provided that the revival takes place within the three-year period starting when the Act is passed.
Amendment 11 would require that any revival of Clause 3 must be accompanied with an order under Clause 3(11) uprating the caps to a level consistent with the CSCS then in operation—that is, the revised CSCS introduced by order following the coming into force of the Act. It is accepted that a precise alignment may not be possible, hence the “as far as practicable”. I cannot see that the Government should have any difficulty with this unless there is an issue about wording, which could be revisited at Third Reading. It is understood that this would be their intention in any event. I think that the Minister hinted that that was the case in our debate on the earlier amendment, but perhaps he would confirm that. There would be no downside, as the measure would align the caps only with the new scheme; there is no additional financial commitment. It would help to address the concerns raised by the JCHR and provide some comfort to civil servants who believe that, at the end of the day, the caps will determine what they get.
Amendment 12 would reduce the time during which revival can take place from three years to one year. We have heard no detailed explanation of why three years is included in the Bill, so the Minister might take this opportunity to explain that in a bit more detail. He might also take the opportunity to be a bit more specific about the precise circumstances and the process under which any revival might proceed. I beg to move.
Lord Wallace of Saltaire
My Lords, I thank the noble Lord for the care with which he has approached this entire Bill. It is a complicated Bill and a complicated scheme; all those in the previous Government and in this Government who have been involved in these negotiations will know how complex it is, particularly when issues of judicial challenge come in. I assure your Lordships, once again, that the Government intend to repeal Clause 3 when the new scheme is ready, in order to enable that scheme—as I have explained, we have agreed that it will be more generous than the minimum reasonable levels set out in the caps—to be laid before Parliament and to take effect. It is not our intention to leave the caps in force for any length of time, since we want to make progress in delivering a reformed compensation scheme for the Civil Service. However, if Clause 3 were not yet in force when the new scheme is ready, as we hope will be the case before the end of the year, we would need to do one of two things. We would either proceed with laying the scheme before Parliament, without having available for several weeks the potential fallback of Clause 3, or we would move that a new scheme be put into place at that point.
I have listened with interest to the noble Lord’s detailed arguments and I thank him for giving me notice of Amendments 11 and 12 earlier this week. I have some sympathy for the reasons behind Amendment 11, but I shall explain that there are reasons why the Government are unable to accept this particular approach. The noble Lord has made it clear that Amendment 11 is aimed at testing the intention behind the power in Clause 4 to revive the caps in Clause 3 and to ensure that they would be reviewed if there were circumstances in which they had to be revived at a later date.
Our view is that there are some significant problems with the drafting of Amendment 11, which we do not think could be resolved. First, the amendment requires the revived caps to be aligned,
“with the current terms of the civil service compensation scheme”.
On the face of it, this might mean maintaining compensation payments as closely as possible with the terms of the proposed new Civil Service Compensation Scheme, which it is intended to put in place as soon as possible after the Bill receives Royal Assent. However, if the new scheme were struck down by challenge in the courts, it seems quite possible that it would not be interpreted as “the current terms”; rather, those terms might need to be interpreted as the terms of the previous, pre-2010, scheme, which would solve nothing, as that is the scheme that both this Government and our predecessor concluded must be reformed.
Even if this were not the case, the wording,
“align ... as far as practicable, with the current terms”,
is not at all clear and might itself be subject to challenge. It would not be as simple as the Government changing the caps to the numbers of months’ service specified in the scheme—for example, replacing 15 months with 21 months. We have made it clear that such an approach would not work, as staff accrue compensation payments differently under the existing and proposed new schemes and so simply changing the number of months stated in the caps would not keep compensation payments within the same cost envelope. We are simply not confident that the words “as far as practicable” would provide sufficient flexibility to set caps that would fully take account of differences in accrual or other issues determining the likely profile of departures.
While for these reasons I have considerable difficulties with the drafting of Amendment 11, that is not the end of the matter. The Government have provided in the Bill a power at Clause 3(11) to increase by order the number of months specified in the caps. I emphasise again that this is a power to increase and not a power to decrease the caps. The powers are there for a reason, which is that, just as the noble Lord has indicated, there might well be very good reasons why the caps should be increased should they need to be imposed following a revival of the provisions in Clause 3. If the Government had no intention of ever increasing the caps, they would not have sought this power.
Lord Wallace of Saltaire
In moving Amendment 13, I shall speak also to Amendment 15. These are government amendments, but I am pleased to say that, unusually, they have the support of a broader coalition with the Front Bench opposite, as I am pleased to see that the noble Lords, Lord McKenzie and Lord Brett, both have their names to these amendments on the Marshalled List. The Government responded to criticism from the Delegated Powers and Regulatory Reform Committee of the unlimited time in which the caps proposed in what is now Clause 3 could be revived by introducing a three-year time limit. The government amendments in Grand Committee were intended to respond to that concern; as I made clear then, the Government accept that there should not be an unlimited power to revive Clause 3. Such a power might then be used many years in the future, in circumstances that we could not predict today and would clearly be unjustified.
However, on reflection, I believe that the amendments that we tabled then may not have had the desired result. In Grand Committee, there was a moment when I recognised that the Government were in a rather weak position, when it was pointed out by noble Lords that, while we had put a time limit on the power to revive the caps in Clause 3, we had not at the same time introduced a power to extend the time limit by a further six months. Had we done that, that power could be used to further extend the power by another six months and another six months, and so on indefinitely. Indeed, the noble Baroness, Lady Drake, commented,
“that does not seem much of a concession”.—[Official Report, 10/11/10; col. GC 58.]
I had to admit that she was probably right. I trust that your Lordships recognise that, when it is clear that the effect of the powers in a Bill do not achieve what the Government had intended to do, we will try to put it right. That is what we are doing in this amendment today.
Accordingly, we have decided that, for clarity, we should dispense completely with any power to extend further beyond three years the time limit on the power to revive the caps in Clause 3. That is what these amendments will achieve. On that basis, I beg to move.
Lord Brett
My Lords, my noble friend Lord McKenzie and I have indeed put our names to these amendments. I will avoid wincing a second time at the use of the word “coalition”. It represents, I believe, not so much a coalition but, because we see repentance of sinners, more a congregation. Suffice it to say that I think we have unanimity on this, and I also am moved to support the amendment.