Superannuation Bill

Debate between John Hemming and Michael McCann

Wednesday 13th October 2010 Commons Chamber

[John Hemming]

I accept the shadow Minister’s point that the Opposition’s proposals are the same as those in the negotiations, but the whole point of the Bill is that it is not supposed to be the end result. Civil servants have not made any estimate of the savings as a result of the Bill, because it is not supposed to be the end result. This legislation is what the civil service has advised us to undertake in order to break the legislative logjam that the previous Government created. It is about making progress.

On the issue of how we manage the civil service, I think that we should try to look after our employees and aim to minimise redundancies. In the absence of the Bill, however, that would become harder and harder. One thing that must be recognised is that reorganisation has essentially come to a halt, because we will not be able to save money if we have to pay six years’ redundancy to somebody. Paying six years’ redundancy will mean that we increase the deficit.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

The hon. Gentleman keeps using the figure of six and two thirds, but will he concede that that is wholly inaccurate? Under the current terms, the maximum payment is three years. The six and two thirds figure to which he refers includes the enhanced pension that somebody would receive if they were over 50 years old. Will he therefore accept that his explanation is inaccurate?

[John Hemming]

The question is about what we add to the deficit—the actual cash costs. That is the key. The proposals that the previous Government tried to impose were struck down by a judicial review, so we have reverted to the original scheme.

In essence we are trying to reduce the deficit and reduce borrowing, and, if by making redundancies we increase borrowing, that will not get us anywhere at all. That is the reality of life. Underlying that, however, things can be done to reduce the full-time equivalent headcount without reducing staff—finding ways in which people can go part-time and so on. But, there is a legislative logjam that needs to be broken, and we need negotiations. Indeed, the 1972 Act requires them. The Public and Commercial Services Union argues in its briefing that there needs to be a trade union veto because there is no contract. However, those people who have contracts can find that their contracts are changed.

To be fair, I should take a very different view if there were any threat to pension rights. Pension rights are different, but an unaffordable redundancy scheme, in which we cannot reorganise organisations and save any money, is one that we cannot deal with in these circumstances—much that the priority has to be otherwise. To that extent, new clause 1 is the right way forward. I am surprised that the Opposition have taken the view that they would rather this were a money Bill than not, because their amendment would create the situation whereby it suddenly became a money Bill.