Restriction of Public Sector Exit Payments Regulations 2020

Lord Wigley Excerpts

Wednesday 23rd September 2020 Lords Chamber

[Lord Wigley (PC) [V]]

My Lords, I first declare an interest as a vice-president of the Local Government Association.

I do not object to the principle of a cap, but these regulations erode the rights of councils to decide workforce changes. Regulation 11 requires Treasury consent for a full council decision in such matters. It is inconsistent with the Government’s claimed support for devolving power to local authorities.

These regulations represent yet another government somersault. The Government have abandoned the values they defended back in 2015, when the noble Baroness, Lady Neville-Rolfe, referred to the need for full council approval to relax the cap without any Treasury consent. Will the Minister confirm that these regulations undermine the 2013 agreement between unions and employers on the Local Government Pension Scheme, and the 25-year guarantee of no change in the Public Service Pensions Act 2013?

Where are the transitional arrangements to protect people from the cliff edge of the cap? Pension strain payments should not be in the cap because that can reduce people’s pensions for life. The Treasury’s approach would mean that key local government workers, earning £30,00 to £40,000 a year, could, if made redundant, suffer pension reductions of up to a staggering 40%. These regulations do not affect only the highest paid staff. Can the Minister assure us that the regulations, if passed, will come into force at the same time as changes to the local government pension schemes? The Government’s consultation ends on 9 November. It is essential not to have a gap between the two sets of regulations.

The Treasury’s equality impact assessment was not published when the regulations were tabled. Why not? Is it because paragraph 2.4 of the assessment says that the

“target scope of this policy … is the high earners in the public sector workforce”?

The reality is that these regulations will damage the pensions of long-serving key workers earning between £30,000 and £40,000. That, surely, is unacceptable.