Superannuation Bill

Paul Goggins Excerpts

Tuesday 7th September 2010 Commons Chamber

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

We have had a good and thorough debate, with some thoughtful and powerful contributions from Members on both sides of the House, including my hon. Friends the Members for Edinburgh East (Sheila Gilmore), for Glenrothes (Lindsay Roy), for Derby North (Chris Williamson) and for North Ayrshire and Arran (Katy Clark), as well as the hon. Member for Brighton, Pavilion (Caroline Lucas).

The difficulty that we face as we prepare to vote on this issue is that the words we have heard from the Dispatch Box are very different from those that are written in the Bill. On 14 July, the Minister for the Cabinet Office set out his approach to the reform of the civil service compensation scheme. He said:

“I want to engage with the unions quickly to develop a scheme that protects the lowest paid…we need to negotiate”.

When I pressed the Minister to take the previous Government’s reform package as the starting point for those negotiations, he accepted, as he did again at the Dispatch Box this afternoon, that had

“that scheme been in existence when the coalition Government came into office, a pressing case would have been made to leave it as it was and work on that basis.”—[Official Report, 14 July 2010; Vol. 513, c. 932.]

It was a good beginning, with an acknowledgement of the merits of the previous Government’s reform package, set out in February, and a clear undertaking to protect the lowest-paid.

Unfortunately, our hopes were dimmed when this draconian Bill was published just 24 hours later, with no prior consultation with staff or the trade unions. The Minister was open and transparent about the purpose of the Bill. He said that it is not the final word. Indeed, in a phrase echoed by my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), the Minister described the Bill as a “blunt instrument”. It contains a sunset clause and powers to repeal at any stage. In no sense is it a reformed scheme: it simply places a cap on the existing unreformed scheme. It means, typically, that a civil servant earning £21,000 a year who is made compulsorily redundant and who would get £63,000 under the existing scheme—and would have got £60,000 under the February 2010 scheme—will get just £21,000. Someone earning £18,000 who would have got £54,000 under the existing scheme or the February 2010 scheme, will get just £18,000.

The truth, which has been freely acknowledged by Ministers, is that the Bill is a negotiating device to ensure drastic cuts in the civil service compensation scheme. But as legislators we have to ask what will happen if those negotiations do not succeed. The Chair of the Public Administration Committee, in a thoughtful speech, warned about the dangers that might lie ahead in terms of legal challenge and delay. It is good to know that he and his Committee will keep a watchful eye on this legislation and other matters.

My hon. Friend the Member for Hayes and Harlington (John McDonnell), who chairs the PCS parliamentary group, has described this Bill as a landmine Bill, and he set out his definition of that. Whether that is true or not, there are real dangers if this Bill passes through Parliament while parallel negotiations go on outside that remain uncertain and, if unsuccessful, could create real resentment among those whom they affect.

There is no argument from my party about the need for reform. Indeed, we engaged in considerable detail in those reforms before the election. The focus of our reform was the vast majority of civil servants who do vital work on the front line of our public services. They include those who work in jobcentres trying to reconnect unemployed people with work; those who work in our prisons dealing with difficult and dangerous offenders and ensuring that our communities are safe places to live; and those who deal with tax credit claimants, ensuring that families have at least a decent minimum income on which to live. Most of those people, as we have heard from many hon. Members, work for modest rewards. Indeed, the Minister has said on several occasions that half of all civil servants earn £21,000 a year or less.

I genuinely want to give the right hon. Gentleman the benefit of the doubt—that is my starting point. I want it to be true when he keeps repeating the claim he makes in the Chamber and the media that he wants to protect the lowest-paid, but at some point those words have to turn into action, and he has to put flesh on the bones. My real concern this afternoon is that his comments have raised expectations above anything that his Government are likely or willing to deliver.

In particular, I urge the right hon. Gentleman and his ministerial colleague, the Parliamentary Secretary, Cabinet Office, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd), to look again at the proposal that the previous Government agreed with five of the six trade unions, and which even now could provide a realistic, practical starting point for negotiation with all six of the unions—namely, that any civil servant on a salary of less than £20,000 a year who is made redundant would be entitled not to 12 months’ or 15 months’ salary, but to three years’ salary. Labour Members will be tabling an amendment to that effect in Committee, and I encourage the Minister to indicate this evening that he and his colleagues will, when that moment comes, show that they mean what they say when they talk about protecting the low-paid and support that amendment. At the very least, that would be a clear indication, in their discussions and negotiations with the trade unions, that they are acting in good faith and mean it when they say that they want to protect the lowest-paid.

My hon. Friend the Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) was among a number of Members on both sides of the House who reminded us that this debate and these proposals come before us in the context of deficit reduction, so it is important to remind the House, as my right hon. Friend the Member for Dulwich and West Norwood (Tessa Jowell) made clear, that our reform package would have saved £500 million over three years. The Government have pledged that, however tough life becomes as a result of the cuts that they introduce, fairness will be the watchword. How many times have we heard that from the Government Front-Bench team? But what is fair about the regressive provisions in the Bill that mean that maximum redundancy payments mirror exactly what an individual earns? If someone earns £100,000 a year, under the terms of the Bill their payment would be £100,000. If someone earns £50,000, the payment would be £50,000. And if someone earns £20,000, it would be £20,000, not the £60,000 promised in the reform package that we negotiated and set out in February.

What is fair about a set of negotiations carried out against the backdrop of a Bill that threatens severe cuts if the trade unions do not agree to a new scheme that dramatically reduces the provisions in the civil service compensation scheme? And what can be fair, as the hon. Member for Southport (Dr Pugh) asked pointedly, about unilaterally rewriting a contract with staff, either from a moral or even perhaps a legal standpoint?

[Mr Reid]

I agree with much of what the right hon. Gentleman is saying, but surely the Labour party believes in reforming the present system, so should it not be supporting the Bill on Second Reading, moving its amendment and then voting against it on Third Reading only if that amendment fails?

[Paul Goggins]

Absolutely not. Our starting point is, and the Government’s starting point should be, the February 2010 proposals agreed by the then Government with five of the six trade unions, not this miserable backstop provision in the Bill.

[Martin Horwood]

rose—

[Paul Goggins]

I will take one more intervention, but the Minister wants to wind up and we have to reflect the debate, which has been a good debate. However, I will happily give way.

[Martin Horwood]

Is the right hon. Gentleman seriously suggesting that the starting point for this process should be something that has already been declared illegal?

[Paul Goggins]

The reasons it was declared illegal relate to the standing of the original legislation—the Superannuation Act 1972—and there is nothing preventing the Minister for the Cabinet Office and his colleague the hon. Member for Ruislip, Northwood and Pinner from sitting down tomorrow with the six trade unions and taking our February 2010 proposals as the starting point for negotiations. I urge the right hon. Gentleman to do that—he is in his place now. I was just reminding the House that he accepted that had the proposals gone through before the election, there would have been a pressing case for leaving it well alone. We are where we are, but it is fair to suggest that that could be the starting point for negotiation.

I ask again: what is fair about sending a message to loyal, dedicated, hard-working staff that they would be better off if they decided to go voluntarily, rather than staying in the job that they are committed to and running the risk of being made redundant compulsorily, resulting in a 20% reduction in the payment that they would receive? My hon. Friend the Member for South Down (Ms Ritchie) asked what was fair about deep cuts in the conditions of staff who run the very services on which those with the least in our society depend, including jobcentre staff and those who deal with tax credit claims.

I shall turn now to what I regard as the misuse of a Bill in the pursuit of these draconian changes to the civil service compensation scheme. I particularly commend the pertinent comments made by my hon. Friend the Member for Kilmarnock and Loudoun (Cathy Jamieson), who has considerable experience as a Minister in Scotland. Mr Speaker, you will be pleased to know that I shall not comment on whether or not this should be a money Bill. I am sure that you will take advice on that and make your decision when the Bill finishes its proceedings in this place. I am sure that you will not need advice from me; you will get it from others.

Having heard the promise of so many reforms and changes, it was bizarre, so early in this Parliament, to hear Ministers openly saying that they hoped they would never need to use the Bill. How bizarre is that, so early in the Parliament? Government Bills should be about putting policy into legislation, not about providing negotiators with a backstop bargaining chip, especially when so much about the Bill remains unclear and uncertain. The 12-month and 15-month caps are entirely arbitrary; they have been plucked out of the air. No rational explanation has been given, and no evidence brought forward, to explain why those time periods have been chosen. The equality impact assessment does not even acknowledge the potential impact on older and longer-serving civil servants, who stand to lose huge sums of money and who might very well be those who find it the most difficult to find alternative employment.

Ministers cannot tell the House how much money would be saved as a result of the Bill, because they do not yet know how many civil servants will be made redundant as a result of their cuts. Perhaps the Minister could say a little more in his winding-up speech about the negotiations. I recognise the constraints involved, and I do not expect him to carry out negotiations across the Dispatch Box this evening, but even an indication about the mood of the negotiations would assist hon. Members. Are Ministers close to agreement? Does the Minister believe that the Bill will actually be needed? When are the next meetings scheduled to take place? Does he expect to be able to come back after the conference recess and tell us on Report that substantial progress has been made, and that we might not need the Bill after all? If he is not going to table amendments when the Bill goes into Committee—the Minister for the Cabinet Office indicated that it was not his intention to do so—will he heed the advice of the hon. Member for Vale of Glamorgan (Alun Cairns) that he should go as far as he can to indicate the kind of measures that he and his colleagues are considering?

My hon. Friend the Member for Hayes and Harlington is right: it is unacceptable to expect hon. Members to vote for a Bill that is so far-reaching in its impact without knowing the detail of the provisions that sit beside it. If the Minister cannot go a little further in providing that detail, I believe that any sensible Member will be forced to conclude that words about fairness are just that, and that the only way to vote tonight is in favour of the reasoned amendment and against the Bill.

--- Later in debate ---

[Mr Hurd]

My hon. Friend makes an extremely good point and he states a fact that I have placed on the record before: that the previously agreed terms were struck down by the courts and were not accepted by the Council of Civil Service Unions. The deal failed, and there is no guarantee that it would succeed in future.

[Paul Goggins]

It is important to be clear about this. The ruling was not about the content of what was proposed by the previous Government and agreed by five of the unions; it was about the fact that the legislation did not allow the Government to compel the solution. It is important that Members are clear about that before they vote tonight.