Superannuation Bill

Steve McCabe Excerpts

Tuesday 7th September 2010 Commons Chamber

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

I beg to move, That the Bill be now read a Second time.

In a statement to the House on 6 July, I made clear the Government’s intention to make the civil service compensation scheme affordable and I set out our intention to legislate to underpin the negotiations about achieving that. I start by stating my unqualified support for the British civil service; I firmly believe that our system of a permanent civil service is one of the jewels of our constitution.

The service’s values of political impartiality, recruitment and advancement on merit, and the public service ethos are as much to be cherished and nurtured today as they ever were. The service is admired throughout the world for the way in which it serves the elected Government of the day. A steady stream of visitors from other countries send their civil servants to find out how it is done here. It is a pleasure, on returning to government—after an 18-year sabbatical, in my case—to discover that those virtues and values remain intact.

In the latter part of the last Parliament, I was pleased to support the previous Government’s actions in introducing, rather belatedly, it has to be said, civil service legislation—only 154 years after it was promised in the Northcote-Trevelyan report, but better late than never. That was an important step in ensuring the continuance of an impartial civil service.

I am also delighted to find that the service continues to attract the best and the brightest, with the civil service fast stream recognised as one of the most prestigious graduate programmes in the country. So the Bill is emphatically not an attack on the civil service: it is a necessary measure to deliver fairness and affordability in the appallingly challenging fiscal circumstances in which the last Government left Britain.

It might be helpful to the House if I set out some of the history and background to how we have got to where we are today. The history of compensation in the civil service is a long one, with the first legislation covering it having been passed more than 150 years ago. The ability of the state to pay compensation to civil servants on the loss of office was created under the Superannuation Act 1859. That Act did not create a right to compensation, but it created a framework under which such payments could be made. The Superannuation Act 1965 consolidated the previous Acts and included provision for the early payment of pensions to those aged 50 or over who were asked to take early retirement in the interests of efficiency. The same Act repeated the provision of an earlier Act that spelled out that civil servants had no legal entitlement or legal right to the benefits referred to in the 1965 Act, which was itself supplemented by an administrative code that set out the payments that a civil servant could expect, making it crystal clear that there was no entitlement to such benefits.

In the late 1960s and early 1970s, the Fulton committee reviewed the position of civil servants. Alongside that committee, the joint superannuation committee of the national Whitley Council was set up to review the provisions of the 1965 Act. It reported in 1972, noting that improvements were needed to the superannuation scheme

“to restore to the Civil Service the position it had traditionally held as one of the leaders in pension practice.”

That view was reflected in the Superannuation Act 1972, which granted civil servants rights to their pensions. In 1987, the compensation scheme was amended to its current form.

The previous Administration concluded that the current scheme was both unsustainable and indefensible. In the summer of 2008, with support from all parts of the House, Ministers embarked on lengthy negotiations to reform the compensation scheme. The right hon. Member for Dulwich and West Norwood (Tessa Jowell) was one of those Ministers. I think it is fair to say that those negotiations were very long drawn out and protracted. I pay tribute to the efforts of successive Ministers in trying to achieve an agreed outcome; they really did go the extra mile to try to achieve consensus. Arguably, they went too far, because the new scheme that was finally agreed in February this year was still out of kilter with most of the rest of the public sector and would have been unrecognisable, frankly, to anyone in the private sector.

The compromises that created what I still regard as a hard-to-defend scheme were made with the expectation that all six civil service trade unions present at the negotiations would agree it. That appeared to have been achieved, but sadly when the agreement was referred back to the leadership of the Public and Commercial Services Union—the biggest and most numerous union, representing very largely lower-paid civil servants—the rug was pulled from under the feet of the lead PCS negotiator and the agreement was rescinded. So after 18 months of tortuous negotiations, with perhaps an excess of flexibility on the part of the then Government, consensual reform of the scheme seemed as far away as ever. Ministers then took the view, correctly, that PCS’s last-minute volte-face could not be allowed to stand in the way of much-needed reform. Therefore, with the agreement of five out of the six unions, the right hon. Member for Dulwich and West Norwood laid the necessary order to give effect to the reformed scheme.

I have at all times made clear our view that the February scheme did not go far enough. Had it come into effect, however, when the coalition Government took office in May this year, a pressing case would have been made to let it remain in force. Sadly, that option simply did not exist. PCS unilaterally, and without the support of the other five trade unions, sought and obtained judicial review and obtained an order that quashed the February scheme. The option of allowing the scheme agreed and negotiated by the last Government was removed from the table by PCS’s unilateral action.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

Whatever the rights and wrongs of seeking judicial review, I am sure the Minister will accept that PCS represents some of the poorest-paid workers in the civil service. His scheme, rather than being fair, will be a lot less generous to them. Why is he introducing a scheme that gives the poorest-paid junior jobcentre official only as much protection as a head of Department in the civil service, when on 6 July he promised protection for the poorest- paid?

[Mr Maude]

I will come on to precisely that point, because the hon. Gentleman puts his finger on a real concern that I have. I will deal with it in detail later, if I may, because how to protect effectively the position of the lowest-paid in the civil service is a really important issue that will concern everyone in the House.

It is now more than 20 years since the last serious reform of the compensation scheme and more than two years since the current reform process began, with an unchanged set of arrangements still in place. Frankly, that position cannot be allowed to continue. The current scheme is unaffordable and unsustainable. It allows for payments of up to three times annual salary or, for older workers, enhancements to pension and lump sum payments costing more than five times salary. For some, those enhancements can total as much as six and two thirds times annual salary. That compares with a maximum of 30 weeks’ pay under the statutory redundancy scheme, with a weekly cap on the salary allowable of £380, giving a total of about £11,000.

The level of payments under the current scheme would be excessive even if we were not facing such a difficult financial situation. The last Government left the country with, in the immortal words of their last Chief Secretary to the Treasury, “no money left”. The Government are having to borrow a pound out of every four just to keep pensions paid and schools and hospitals functioning.

[Mr Maude]

The extent to which rights are accrued is an issue to consider. We are talking not strictly about redundancy but about compensation for loss of office under a statutory scheme, and the relevant rights are those in force at the time when redundancy or loss of office happens. If the statutory redundancy scheme changes, the terms that govern the entitlement are those in place at the time when the redundancy happens. I understand my hon. Friend’s point, but I do not believe it applies in this case. I shall deal with that matter a little more in due course.

Our view is that to maintain the current scheme would be unfair as between taxpayers and civil servants and as between workers in the civil service and those in the private sector or the wider public sector. It is unfair also to less well-paid civil servants, which is related to exactly the point that the hon. Member for Birmingham, Selly Oak (Steve McCabe) made, with which I shall deal.

The effect of the current scheme is that it is prohibitively expensive to make redundant civil servants who are highly paid and long-serving. The result is therefore that when money has to be saved by reducing head count, the burden currently falls disproportionately on the lower-paid, more of whom lose their jobs than is necessary or desirable. My view is that lower-paid civil servants suffer disproportionately and are more likely to lose their jobs under the current scheme than would be the case under the arrangements that we are seeking to negotiate. In addition to the very simple cap incorporated in the Bill, we are seeking in parallel to negotiate different arrangements with significantly enhanced protection for lower-paid civil servants.

[Steve McCabe]

Let me say that I want to assume that the Minister’s long-term intentions are exactly as he says, but is it not a fact that under the Bill he will penalise, to an extraordinary degree, the poorest paid people in the civil service? That is the effect of the measure that he is asking us to vote for today.

[Mr Maude]

No. The effect of the legislation will be identical on all civil servants. Under the Bill, the cap would apply uniformly to civil servants. I shall come in a moment to the negotiations that are going on in parallel, because that will deal exactly with the hon. Gentleman’s point.

Constitution and Home Affairs

Steve McCabe Excerpts

Monday 7th June 2010 Commons Chamber

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

It is probably just as well that this is not a maiden speech, because I would hate to have to compete with the outstanding contributions that we have heard today, not least that of the hon. Member for Hexham (Guy Opperman). On the basis of what I have heard, I am sure that he will make a major contribution to this place in the years ahead. This is not a maiden speech, but it is a long time since I have had an opportunity to address the House and I have a new constituency—new Selly Oak—which I am very proud to represent.

Apart from the rather dubious proposals on anonymity for rape defendants and the likely impact on rape victims, we have not heard much in the Queen’s Speech about the victims of crime and antisocial behaviour. What plans does the coalition have to ensure that the needs of that group are put at the centre of our criminal justice system? It is the lack of consideration for victims that causes some people to think that the system is broken and many to believe that it is weighted entirely in favour of the offender. I have been working with victims for some time now, the most recent phase of which culminated in an input into Sara Payne’s report. I take this opportunity to wish her well. I hope that she makes a full recovery, because she is a remarkable lady.

I have become convinced that we need local charters for victims that all criminal justice and public agencies must sign up to so that everyone knows what is expected of them, and that we must reweight the system by putting the rights and needs of the victim ahead of the demands and desires of the wrongdoer. I ask the Government to examine how to reshape the criminal justice system so that the victim becomes our top priority.

I understand the coalition’s desire to abolish identity cards. I do not agree with its view, nor do a great many other people who have worries relating to the contribution that ID cards can make to combating crime and fraud. Will there be any compensation for those who, in good faith, have already purchased ID cards, or are they to become the first uncompensated victims of the coalition? As the databases are dismantled, what will happen to ID cards for foreign nationals? Without that infrastructure, how will we tackle illegal immigration?

I should like to know more about the priorities on police reform. Money is tight, so why, as the hon. Member for Epping Forest (Mrs Laing) might well ask, is it a priority to have elections that nobody wants at a cost of perhaps £50 million per throw? Where will that money come from? Can my constituents in Selly Oak have an assurance that it will not be stripped from their policing budgets? What will happen to the policing pledge under elected police chiefs? Can it simply be ditched? If so, how will the Home Secretary safeguard against massive variations in behaviour and performance across police forces? Is incentivised and common-sense policing still on the agenda? On DNA and reducing the retention period for DNA profiles—not abolishing them as a matter of principle, but reducing the period—is the Home Secretary convinced that her proposals will not result in an avoidable tragedy? How will she sleep at night if a murderer or rapist who could have been caught goes free and does it again?

Finally, what are the Government’s intentions in relation to closed circuit television, and what was the purpose of the Deputy Prime Minister’s outburst against it? Is he merely trying to rekindle his liberal credentials and using CCTV as an Aunt Sally? Remember all those warm words—“It doesn’t have to be like this,” “It can be different,” and “We can change it”? That was rhetoric with the shelf-life of a TV debate from someone whose ambition is now exposed as being to acquire power and hang on to it by any means possible, no matter how illiberal or anti-democratic. Let me tell him that it will not wash. The people in Selly Oak want CCTV. Of course, they want it to be used responsibly, but they want it, and they will not accept any sham diversions.

I have experience of Lib Dem-Tory coalitions in Birmingham, and I know how poor they are at dealing with crime, antisocial behaviour and victims, and how poor they are at using tools that are regularly available elsewhere. I warn this Government not to make the same mistakes, not to rob us of the very tools that make people feel safe and that assist us in the fight against crime, and, for goodness’ sake, not to do that to help to save face for an already tarnished Deputy Prime Minister.