Baroness Jowell
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Superannuation Bill
Baroness Jowell Excerpts(13 years, 8 months ago)
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Tessa Jowell (Dulwich and West Norwood) (Lab)
I beg to move an amendment, to leave out from “That” to the end of the Question and add:
“this House, whilst affirming its belief that civil service compensation should be reformed, declines to give a Second Reading to the Superannuation Bill because it provides inadequate protection for some of the lowest paid and longest serving public sector workers; believes that the reform proposals of February 2010 were fair, reasonable and non-age discriminatory, offering protection for the lowest paid workers whilst making substantial savings; and is strongly of the opinion that the publication of such a Bill should have been preceded by a full process of pre-legislative scrutiny of a draft Bill and in full consultation with Civil Service employees.”
I hope that the Minister has studied the amendment closely, because Labour Members believe that it holds the answers he seeks.
At the end of the last parliamentary session, the day before the Bill was published, the Minister declared that when it came to reform of civil service compensation, he wanted to negotiate an arrangement that had fairness built into it. Obviously we welcome that ambition, but we argue that as the negotiations have progressed and the detail of the Bill has become clear, he has failed to live up to his commitment.
The Minister says that he wants a fair settlement, but he has proposed reforms that are harsh, and harshest of all for some of the longest-serving, often low-paid, civil servants. The Minister says that he wants a negotiated settlement, but he has thrown out the progress made by the last Government through just such negotiations, and instead seeks to impose a short-term solution which lacks the legitimacy that comes from open and honest dialogue with the trade unions representing the people who will be affected by the reforms.
I welcome the Minister’s generous remarks, which were sincerely meant, about our nation’s public servants. I join him in recognising the important role that they play in our national life. However, I also argue that they deserve better than the proposals in the Bill. Public servants are too often represented as dead-weight on the taxpayer, as if they were somehow the cause of the deficit.
Tessa Jowell
That is also misguided, and we can have a further debate about it.
In fact, it is public servants who make our borders safe, help unemployed people back to work, run our courts and prisons, collect our taxes, and support our armed forces both at home and abroad, in Iraq and Afghanistan. With professionalism and integrity, they make the process of government work. The representations that I suspect we have all received in our constituency surgeries seek to make that point. It is being made by the people who provide those services, many of whom are members of the PCS but feel that their motives and their importance are being misrepresented.
Mr Maude
Let me make it absolutely clear that we do not blame public servants at all for the disgraceful budget deficit that the coalition Government inherited. Like Tony Blair, we blame the last Prime Minister, who as Chancellor and then as Prime Minister presided over an incontinent approach to the public finances.
Tessa Jowell
And let me make it absolutely clear that the Minister has grossly misrepresented the words of the former Prime Minister. Let me also remind him that the deficit arose because of a global financial crisis, and that it was our Government—led by the last Labour Prime Minister—who steered our economy at that stage, who, indeed, provided leadership for the world, and who drew our economy back from the brink of disaster. Let us have no more trivial point-scoring on that subject. I hope that during this debate we shall be able to move on from some of the crass misrepresentation of our country’s public servants and once more recognise the importance of their work, both public and private.
Richard Graham
As the right hon. Lady knows, a number of Members on this side of the House, as former civil servants, have already said how important they believe the civil service to be. The amendment, however, focuses on fairness and affordability. Does the right hon. Lady agree that affordability is critical in the current economic climate, and will she tell the House what approach she intends to take? As for fairness, does she agree that the outline given by my right hon. Friend the Minister of his negotiations with the trade unions represents exactly the sort of fair approach that we should be seeking?
Tessa Jowell
I intend to test the Minister’s commitment to fairness—with respect, I think that he asked more questions than he answered—and, if the hon. Member for Gloucester (Richard Graham) will contain his impatience, I shall respond to both his tests in relation to the fairness and the affordability of our alternative.
The Minister has made it clear that the civil service compensation scheme is in need of reform, and we agree. The cost of the scheme needs to be reduced. We fully recognise that, in the present climate, it provides over-generous and disproportionate benefits for some very highly paid people. I believe we are all agreed on the need for reform, which is why in February we set out changes to end what would be regarded by the wider public, and by any measure, as over-generous settlements.
The February 2010 scheme would have saved £500 million over the next three years. That was part of our Government’s plan to reduce the deficit. Yes, reform is needed, but it must be the right reform, delivered in the right way. It must be fair and workable, and in particular—here I echo the Minister’s words—it must provide protection for the lowest-paid. It must also be underpinned by open and honest dialogue with the civil service unions representing those who are likely to be affected.
Martin Horwood (Cheltenham) (LD)
The right hon. Lady keeps presenting the last Government as the Government who pursued a path of negotiation and what she has just described as open dialogue. In February this year, however, she too pursued the route of compulsion. Does she now regret the precedent that that set?
Tessa Jowell
There is all the difference in the world between a settlement that recognises reasonably the proper expectation of the lowest-paid, and the proposals in the Bill. That is the difference that the hon. Gentleman needs to understand.
Tessa Jowell
I am going to make a bit of progress.
In the current environment in which many civil servants are understandably concerned about their jobs, it is even more important for any reform package to be achieved in full consultation and, wherever possible, agreement with the work force. As a result of the Equality Act 2010, which formed such an important part of the last Government’s legislative programme, the Bill is subject to an equality impact assessment, which I took the time to study.
Against the commitments to full consultation and transparent negotiation, we might look at some of the evidence in the equality impact assessment. It asks:
“Does this policy affect the experiences of staff? How? What are their concerns?”
For staff, the following answer is given:
“Exit terms are set out in Civil Service Compensation Scheme, to be capped at levels set out in the Bill.”
That is a perfectly fair statement of fact. The impact assessment then asks whether the policy affects the experiences of staff networks and associations. The answer given is: “As above”—for staff—but also:
“(no consultation due to urgent need for affordable provisions).”
The answer for trade unions is the same:
“As above (but no consultation due to urgent need for affordable provisions).”
When the equality impact assessment looks at the impact on voluntary organisations, the conclusion is that that is “N/A”—not applicable. The impact on race is also deemed not applicable, as are the impacts on faith, disability rights, gender, sexual orientation and age. The impact assessment also asks:
“What were the main findings of the engagement exercise and what weight should they carry?”
That, too, is said to be not applicable.
“Does this policy have the potential to cause unlawful direct or indirect discrimination? Does this policy have the potential to exclude certain groups of people from obtaining services, or limit their participation in any aspect of public life?”
That is not applicable as well.
“How does the policy promote equality of opportunity?”
That is not applicable also. I could go on.
That is not by any stretch of the imagination a proper assessment of the impact of the proposals on the work force, taking account of the obligations that sit on the coalition Government to recognise equality of opportunity.
Mr Jenkin
I am interested in what the right hon. Lady is saying, but I think it is incumbent on her to explain to the House why she thinks the Bill might be discriminatory in some way, rather than just advert to a negative and say that that is not good enough. Does she honestly believe that the measures could be discriminatory in some way? If she could explain that to the House, it would be very helpful.
Tessa Jowell
The hon. Gentleman asks a fair question, but it is his responsibility to test that. However, because compared with the existing situation these proposals in effect levy the greatest penalty on the longest-serving, and almost inevitably the oldest, civil servants, there is at least a prima facie case for considering whether they are age discriminatory. I draw no conclusions, but I say to the House that I consider that the equality impact assessment has not taken full account of the impact of the proposed measures across the work force. The Opposition consider the terms put forward to be both unfair and punitive.
John Hemming
The right hon. Lady often uses the word “unfair”. I assume that she employs her own staff in her parliamentary office and that they are subject to the statutory scheme, with a maximum of 30 weeks’ pay. How does she argue that that, which was set by Parliament, is fair compared with the scheme the Government proposed in February this year?
Tessa Jowell
For the very simple reason that, in order to meet the terms of the judicial review, the proposals in the Bill are removing entitlements, expectations and accrued rights from staff who have a reasonable expectation of receiving them. That is why they are unfair.
Tessa Jowell
No, I am going to make progress because many Members wish to speak in the debate.
We argue that no adequate protection is offered to the lowest-paid, with a junior official in a job centre receiving no more protection than a permanent secretary of a Government Department. In introducing the Bill, the Government have insufficiently consulted their employees. The scant information in the equality statement makes that very clear.
Alison McGovern (Wirral South) (Lab)
Does my right hon. Friend agree that the fear, which I have come across in my constituency, about these changes is exacerbated by what seems to be scant consultation? Having more consultation would be helpful in dealing with the worry and fear that I have picked up on in Wirral.
Tessa Jowell
My hon. Friend makes an important point based on extensive discussions in her constituency with civil servants likely to be affected. She is absolutely right in identifying that fear, but that does not mean that change is not necessary, nor that members of the Council of Civil Service Unions are not reasonable people who are prepared to negotiate in the spirit that they recognise is necessary.
Tessa Jowell
No, I am going to make some progress—and I think that the hon. Gentleman has already made an intervention.
The very fact that the Bill is designed to expire within 12 months makes its own case for its unworkability as a long-term solution. Instead the Bill is being deliberately used to force the trade unions into compliance. As such it should be seen as a very unusual use of parliamentary procedure to ask Parliament to pass legislation that—as the Minister has made clear—it is hoped will not be implemented.
The Deputy Prime Minister has stated—presumably on behalf of the Government—that fairness will be at the heart of everything the Government do. However, as with so much that the coalition does, the terms put forward under the Bill do not meet the first basic test: they are not fair because some of our longest-serving, and often lowest-paid, civil servants receive no protection under the proposals.
Mr David Hamilton
Did the Minister not give it away when he made the point in his opening remarks that it is more expensive to get rid of those at the top of the tree, and therefore there would be an encouragement to get rid of those at the bottom of the tree? Will not low-paid civil servants be really concerned by the attitude now being taken?
Tessa Jowell
I think that those at the higher earnings end and those at the lower earnings end are equally entitled to be apprehensive about the proposals.
Mr Maude
Let me make it absolutely clear that the point I was making is that, under the current scheme, lower-paid people are more likely to lose their jobs because it is so prohibitively expensive to make higher-paid, longer-serving senior officials redundant. As a result, more lower-paid civil servants get made redundant. The reform is therefore necessary for this reason alone: to protect the jobs of lower-paid workers.
Tessa Jowell
Well, let us see how that commitment plays out in practice. I entirely agree with the right hon. Gentleman that the people who work in job centres and at our borders often doing relatively low-paid jobs are the people who make those services happen at all, and I think there would be a marked degree of cross-party agreement about ensuring fairness and protection for such employees. We on the Opposition Benches, however, feel considerable scepticism about whether the proposals will deliver that.
Let me illustrate that and pick up on the point made by my hon. Friend the Member for Midlothian (Mr Hamilton). A member of staff earning less than £20,000 made compulsorily redundant after more than 20 years’ service would see their redundancy package more than halved under the provisions of the Bill; and staff covered by the civil service compensation scheme would receive substantially less in redundancy terms than comparable public sector employees, despite being among the lowest-paid public servants. The proposed cap is half that often seen in local government, education and the NHS.
On the question of protection for the lowest-paid, let me repeat the words used by the Minister in the House in July—he was right about this:
“Contrary to general belief, large numbers of civil servants are not very well paid—half of them earn £21,000 a year or less—and we want there to be extra protection for them.”—[Official Report, 14 July 2010; Vol. 513, c. 931-32.]
So say all of us, but the fact is that the Bill gives no confidence to those lower-paid employees.
Matthew Hancock (West Suffolk) (Con)
The right hon. Lady made the comparison between civil service and other public sector redundancy packages. Can she also make a comparison between civil service and private sector mandatory redundancy packages?
Tessa Jowell
I am surprised that the hon. Gentleman feels it necessary to ask that question. If employers in the private sector use the basic statutory scheme, it is considerably less generous than even the proposals in the Bill. In a way, that is not the point, because the value that we attach to public servants, to the importance of the jobs that they do and to the commitment to invest in security to prevent turnover and to compensate for what are often lower levels of pay is one of the reasons that such provisions have traditionally tended to be more generous. It is worth reminding the hon. Gentleman—the Minister took us through the history—that the scheme was created by a Conservative Government and amended by a Conservative Government and that attempts at reform were made under a Labour Government. Now, under the coalition Government, we have what amounts to a hollowed out version of the original scheme.
Tessa Jowell
No, I am going to make some progress so that Back-Bench Members can get in.
We expect the Government to take seriously the need for proper dialogue and negotiation in circumstances where the individual impact of the changes is so substantial. It is fair to reflect disappointment among the trade unions that the Bill makes no attempt to put in place a long-term solution to the big challenge of the reform of civil service compensation and, as such, no solution is possible given the Government’s failure to engage constructively with their employees and their representatives. That is implicit in the Bill’s final provisions, which are designed to ensure that it is sunsetted, or expires within 12 months, can be repealed at any time and can only be extended for a further six months through recourse to secondary legislation.
The Bill to which the House is being asked to give a Second Reading tonight does not even represent the Government’s settled position. The Minister tells us that his ambition is now a negotiated, sustainable and practical long-term solution, but that ambition merely serves to remind us that the Bill fails to provide such a sustainable solution or one that has been subject to proper dialogue with those affected.
There are questions that the coalition Government and the right hon. Gentleman must answer. The Opposition have made absolutely clear the anticipated level of savings—figures in which there can be confidence—that would have been produced by the February reform package, so I ask the right hon. Gentleman what savings the Government expect to make from the proposals in the Bill. Why do we not have a complete and workable scheme in front of the House as part of the Bill for which a Second Reading is sought? Why are we spending parliamentary time on legislation that simply seeks to provide the right hon. Gentleman with a negotiating tool to use with the civil service unions?
There is, of course, an alternative. It is fair and it is workable. As shown in our reasoned amendment, the February 2010 scheme should form the basis for the reform that we all agree is needed. As the right hon. Gentleman has made clear, it emerged from an eight-month consultation between the Government and civil service staff and would provide a fair resolution to the issue. Now, although five trade unions have agreed and continue to support the proposal, all six have expressed their support for the use of the principles underpinning the scheme as a basis for moving forward. That is an invitation and an offer to the right hon. Gentleman. Such an approach would meet the tests that we have set out for reform and save at least £500 million over the next three years.
Our challenge to the Minister is to put back on the table the February 2010 proposals, which are fair to the lowest-paid, will contribute £500 million to reducing the deficit and will reform the existing scheme. The right hon. Gentleman has already conceded in exchanges with my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) that, had all the unions agreed to this, there would have been—as he put it—a pressing case for acceptance. We therefore ask that he accepts the case now and supports the reasoned amendment. I call on the House to reject the Bill.
Matthew Hancock
It is always dangerous to give way to my hon. Friend, because she usually puts the point far more lucidly than one could oneself.
I was going to come on precisely to that point—my second point about fairness. Not only is it fair to deal with the deficit and, I think, unfair to give enormous payouts when we have to achieve other very difficult things, but fairness across the economy and across society is also important. The maximum payout in the mandatory private sector compensation scheme, for which this House legislated, is £11,400, yet the proposal is nowhere near that figure within the public sector.
It was interesting to note that when the shadow Minister, the right hon. Member for Dulwich and West Norwood (Tessa Jowell), responded to an intervention about whether it was fair to have a similar sort of payoff scheme in the private sector as in the public sector, she effectively said that she was not in favour of equality. I thought that Labour Members were in favour of equality, but obviously not when it does not suit.
Tessa Jowell
I am not quite sure what point the hon. Gentleman is trying to make. If the question is whether I agree the case for parity between the public and the private sector on these matters, the answer is that parity cannot be willed. We are not going to peg the public sector to the private sector other than in an indicative way. There are different incentive structures in the remuneration packages of people who work in the two sectors and they are in different ways reflected in aspects such as the compensation for redundancy that we are discussing this evening.
Matthew Hancock
I thank the right hon. Lady for her intervention. In some cases, it seems, one can talk about parity, and in other cases about equality. If one is favour of it, one might use one word, but if one is against it, use the other. The important point here is that we need to look at overall compensation packages and overall pay, including pensions and other terms and conditions of work.
That brings me back to the issue of fairness across the sectors. If we are to have a modern civil service and a modern flexible economy that work in the future, we also need to allow transfer between the two sectors. Bringing into line the working practices in the two is no bad thing; nor is bringing into line the redundancy payoffs as the Bill does—and, indeed, as the right hon. Lady’s former proposals did. The hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann) raised an interesting point when he argued that we should put the members of the unions ahead of the rest of our constituents. I think that the most important thing for a new MP to do is to represent all of their constituents, not just those who are members of a union.
My final point is about fairness in employment practices. I asked the House of Commons Library about the concept of priority posting pools, which are groups of civil servants who are given nothing to do, but cannot be let go because of the cost of the redundancy package. The Library determined that there were a total of 1,946 such civil servants. When people working for their country have completed their jobs and their projects, it cannot be fair to tell them, “We would like to pay you to do nothing. We cannot find anything useful for you to do. We do not think you would be any good at doing anything else, but we cannot afford to get rid of you, so we are going to carry on paying you.” As of January 2010, there were 1,946 such people in the civil service. I believe it is unfair to them not to have a flexible employment system so that we can have a grown-up and modern civil service working for the future.
Such is my argument. We are here to look at the fairness of this Bill as well as other aspects of it. If we want to spend public money fairly, rebalance our economy fairly and try to improve the fairness of working practices in civil service employment, we should support the Bill. The alternative is defending £500,000 payouts, an unbalanced economy and out-of-date working practices. I do not want to defend those things, so I will support the Bill this evening.