Lord McKenzie of Luton
Main Page: Lord McKenzie of Luton (Labour - Life peer)Superannuation Bill
Lord McKenzie of Luton Excerpts(13 years, 6 months ago)
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“( ) Section 1 of the Superannuation Act 1972 is amended as follows.
( ) In subsection (3), after “consult“ insert “, with a view to reaching agreement,”
( ) In subsection (3A), after “consult” insert “, with a view to reaching agreement,”.”
Lord McKenzie of Luton
My Lords, this is a straightforward amendment that I have some hope that the Government will feel able to accept. Its subject was specifically raised with us, and I think that it has been discussed with the Government by trade unions.
As was stressed by the Government in the other place, before a superannuation scheme can be introduced there is a requirement that the relevant Minister consult persons appearing to represent those who are likely to be affected by the scheme. That requirement is contained in Section 1(3)—and, in relation to employees of the Scottish Parliamentary Corporate Body, Section 1(3A)—of the 1972 Act. The amendment is designed to clarify the purpose of such consultation—namely, that the consultation should be with a view to reaching agreement with those affected. In that regard it does no more than import into Section 1 of the 1972 Act the same requirement that the Government seek, through Amendment 2, to import into their proposed new clause on consultation.
We will come to a more substantive debate around this issue shortly in the context of the proposal to fetter the existing requirement for agreement in circumstances where compensation schemes are to be changed in an adverse way. We are clearly of the view, which the Government have also expressed, that the introduction and amendment of superannuation arrangements are best achieved and most sustainable in circumstances where they have been accomplished by a proper process of collective bargaining and one which leads to agreement.
Emphasising that consultation should lead to agreement should not therefore be contentious, and I hope will command full support. However, at the start of our Committee, I ask the Minister to take the opportunity to give us the government view, in so far as he is able, on the extent to which agreement has been reached on changes to the Civil Service Compensation Scheme, what if any residual discussions are proceeding and how he sees such matters heading to a conclusion. I am particularly interested in what he sees as the immediate steps which will follow from this Bill becoming law. Obviously I would not want him to stray into matters which could be prejudicial to an outcome agreed by all—I am sure that he would not—but in the mean time I beg to move.
Baroness Turner of Camden
My Lords, I had not seen this amendment when I drafted my own amendments to the Bill. Of course I prefer it to the current wording because it at least provides that there has to be an agreement before the Superannuation Act 1972 is amended. However, as will be seen from my amendments, I approached the matter from a different angle. I was aware that the unions that have been mainly involved had not been in favour of Clause 1 at all; they said that it was introduced by the Minister on Report in the Commons to amend the requirement of the 1972 Act that any changes be agreed with the unions. Without that requirement, the Government could simply impose redundancy terms on civil servants under Clause 1 without any collective bargaining agreement at all. That seemed wrong, and I approached the Bill from the standpoint that what has to be done is not necessarily to maintain in full the Superannuation Act 1972 and its terms but to ensure that whatever happens does so only after full consultation and agreement—in other words, after the appropriate collective bargaining has taken place.
It is clear that a number of civil servants covered by the legislation and the previous agreement are very concerned about their future. Like many of us, I have received a number of letters from individual civil servants who believe that they are facing widespread redundancy in a situation where they believed that they had at least stable, if not always well paid, employment. They are concerned that, in the places where they operate, they will not find it easy to find alternative employment. That is not surprising because, some considerable time ago, the Government of the day decided to locate their offices in various parts of the country away from the south-east—notably in Newcastle. With redundancy now facing many people, those civil servants are concerned that they are in an area where no alternative employment is readily available. For that reason, they have become very worried about what will now happen in the event of redundancy.
For those reasons, I am not at all happy about Clause 1 and have indicated my intention to oppose the Question that Clause 1 should stand part of the Bill. I will then proceed with my other amendments, the idea of which is to ensure that there is proper consultation and negotiation with the appropriate unions before any action can be taken that changes the terms and conditions on which civil servants were employed.
Lord Wallace of Saltaire
My Lords, perhaps I should start by responding to the request of the noble Lord, Lord McKenzie, to update the Committee as far as possible on where we are in consultation with the unions. As Members may know, the Government have been engaged in active consultation with the unions in parallel with the progress of the Bill, following the clear signal given on Second Reading and in Committee in the other place that there was consensus on all sides in that House that the negotiations should proceed as rapidly as possible.
As noble Lords opposite are aware, the Council of Civil Service Unions was asked to advise the Government whether the Government’s proposals might form the basis of a wider agreement that the individual unions could then recommend to their respective members. In the event, the CCSU did not accept the proposals, but five of the unions—Prospect, the FDA, the POA, the GMB and Unite—then approached the Government directly and asked to continue discussions on the terms. There followed an intensive period of meetings between the five unions and officials that, on 5 October, resulted in an agreement being reached between the parties on terms that might form the basis of a new compensation scheme.
Later on 5 October, the GMB, Unite, the POA, Prospect and the FDA wrote to confirm that the terms accurately recorded an agreement that all five unions were able to recommend positively to their executives as being the best that might be achieved in negotiation. Soon after 5 October, agreement was reached between the Government and the trade union negotiating teams. The POA executive committee then voted to distance itself from the agreement and to request further discussion. The sixth union—the PCS—withdrew from the talks at the point that the five other unions agreed to negotiate separately.
The Government remain committed to trying to reach an agreement with the CCSU. The Minister for the Cabinet Office has since made a number of personal approaches, orally and in writing, to the PCS general secretary and the Prison Officers’ Association in which he has invited the CCSU to put forward alternative proposals for a reformed Civil Service Compensation Scheme and has sought to engage with them further. I understand that a letter was received from the Council of Civil Service Unions this morning, but we have not yet had a chance to consider that further.
It may be helpful to remind the Committee that the main outcome that the Government seek to achieve through the Bill is to enable necessary reform of the Civil Service Compensation Scheme in a way that is both economically and fiscally acceptable and fair to the civil servants affected.
The key elements of the new scheme that we propose to introduce include, first, a standard tariff whereby each year of service provides one month’s salary in the event of redundancy. The tariff will be capped at 12 months for compulsory redundancy and 21 months for voluntary redundancy. Secondly, all civil servants who are made redundant, voluntarily or compulsorily, will be entitled to a three-month notice period. Thirdly, there will be significant protection for lower-paid civil servants. This is one of the most important aspects of the scheme that the Government have agreed with the majority of the unions. Any civil servant earning less than £23,000 a year who is made redundant will be deemed to earn that amount when their redundancy payment is calculated. Payments to the higher paid will be limited so that staff earning more than six times the private sector median average earnings—currently just under £150,000 a year—would have their salary capped at that figure for the purpose of calculating their redundancy payment. When staff have, in addition, reached minimum pension age, they may be able to opt for early payment of pension when they leave, in return for surrendering the appropriate amount of any redundancy payment.
We believe that this proposed new scheme meets our goals and those of the majority of union representatives. It is affordable and sustainable, it caps the amount that can be paid out and it reforms the accrual rate, but it is also fair and provides protection for both the lower paid and those closest to retirement. This new offer is a good one and we seriously hope that it will still be possible to secure the agreement of all the Civil Service unions.
The Government have reservations about the amendment because it takes us very wide of the compensation scheme. The purpose of the Bill is very much to deal with the reform of the compensation scheme. Section 1 of the 1972 Act deals with a much broader set of issues. Noble Lords opposite may have been seeking simplicity in applying their amendment to all schemes made under Section 1 of the 1972 Act, but it goes some way beyond the matters principally addressed by the Bill. It asks us to consider its application to a variety of schemes under the Act, of which some are required ultimately to reach agreement with consultees and some are not. That makes the amendment’s fit with the range of Section 1 schemes rather less elegant than it might be. Our strong sense, therefore, is that we should resist this amendment. We recognise, however, that the approach of the 1972 Act and the Government to relations with the unions—like that of our predecessors in government—has been and remains to reach agreement by consensus wherever possible and as fully as possible. I therefore invite the noble Lord to withdraw his amendment.
Lord McKenzie of Luton
I thank the Minister for that full explanation and update as to where matters rest. Around that, I ask him specifically what he sees the steps over the next few weeks as being. I understood from our earlier debate that it was planned that, the day after the Act comes into force, an order will be laid that repeals Section 2. The day after that, the scheme will be laid, maybe in the other order. Can the Minister confirm that? In a sense, it gives some framework to the discussions that we will have about Clause 2 and the caps, which are a particular bone of contention.
More generally, my noble friend Lady Turner makes some very telling points about the concerns that people have and how the changes to the compensation scheme may impact on them. The amendment that I have pursued is to Section 1 of the 1972 Act, not the Bill that is under consideration. We will debate that in a moment. Specifically on the amendment, I am sorry that the Minister does not feel able to accept it. All it does is to qualify the obligation to consult in a way that the Government’s own amendment does. I am not sure whether his principal argument was that the scope of the Bill precludes its acceptance or that under the 1972 Act some arrangements need agreement and some do not. Even if they do not, presumably the consultation is to some effect, which ought to be to reach agreement, whatever the substantive matter under consideration.
Obviously, given where we are, this is not a matter that I would press today but could the Minister confirm whether it is the scope of the Bill or other matters as well that are precluding acceptance of this amendment? I would certainly appreciate it if he was able to update us on the precise steps envisaged between about now, when the Bill becomes an Act, and what flows from that in terms of orders, particularly on the demise of the caps.
Lord Wallace of Saltaire
I thank the noble Lord for that helpful intervention. There were two questions there. First, our resistance to this is partly on the basis that this is a much more narrowly focused Bill. Secondly, the 1972 Act is fairly complex and deals with a large range of different activities. Although there is of course a general acceptance of consultation, the exact element of commitment to agreement and consultation under different clauses is fairly complex. If we were to go into a wholesale revision of the 1972 Act, we would be doing a very different exercise now.
On where we are with the Bill and what is intended, as I am sure noble Lords are aware, this Bill is a fallback position which is felt to be necessary because these negotiations have been under way for two years and have become subject to litigation. The Government are anxious, as were our predecessor Government, that attempts to introduce a satisfactory new compensation scheme should not be delayed further by continuing litigation, some of which—as noble Lords will know—could last for a very long time.
The hope and intention is that once Royal Assent to the Bill takes place, the cap will be in force and, if everything is then accepted by those involved, the sunset clause will come into operation on day two and the new scheme will be laid on day three. We would then go through to the new scheme coming into operation so that compensation could be provided on the agreed new basis. That is the hope and intention and, as those who were Ministers in the previous Government will recognise, it is the essence of what we are attempting to do to avoid further delay.
Lord McKenzie of Luton
Could we just be clear on that point? If the Act receives Royal Assent and comes into force, I think that the Minister said that would bring the sunset clause into play. I thought the proposition was that if you had the new scheme introduced by order, you would then have to do something with the caps—otherwise, there is what I hope is a clear inconsistency between what the caps and the scheme provide—and that the proposal was to repeal Section 2. Is that not the case? It is quite important that we have clarity because we have tabled amendments about doing away with Clause 2. That might be the safest route in any event but I assume that, once an order is laid and a new scheme is in place, the caps would have to be removed on a permanent or, at least, a temporary basis.
Lord Wallace of Saltaire
The caps, as the noble Lord will be aware, are there in case litigation were to prevent the new scheme going into operation, so that there would be an alternative. However, the caps can be repealed by negative order and the intention is that that order would be placed the day after Royal Assent, if all else is in play.
Baroness Noakes
If it is the case that we are providing some kind of insurance policy against litigation that might take us all the way to the European Court of Human Rights—I think that is unlikely, but let us assume that that is going to happen—why are the Government providing caps that are so out of line with anything that they think they are going to agree? It is perfectly plain that Clause 2 is something to wave at the unions to say, “If you don’t agree, this is what we will do to you”. It is not a reasonable fallback position if Clause 1 is litigated. I am still very confused about the structure of the Bill, as I explained to the Minister at Second Reading.
Lord McKenzie of Luton
The noble Baroness has raised a very pertinent point but, in terms of the litigation—whatever the outside risk of it might be—that could come from challenge under the human rights legislation, what leads the Government to assume that that might be successful in relation to a scheme that would not be equally successful in relation to the legislation around the caps? You would expect them both to be subject to the same sort of challenge.
Lord Wallace of Saltaire
The caps as they stand can be increased but not decreased under Clause 2. This is a fallback Bill that we hope it will not prove necessary to implement but, in that unlikely event, the caps can be increased under Clause 2 in the interim if by any chance there were to be a challenge or a judicial review which delayed the implementation of the scheme that had been agreed.
Lord McKenzie of Luton
We will reflect on this discussion before Report. In our subsequent amendments, we will want to unpick this issue around the risks and quite how the structure of the Bill should continue as currently proposed. We have scope to do that. I beg leave to withdraw the amendment.
Lord McKenzie of Luton
I will speak to Amendments 3 and 4, and comment on government Amendments 2, 7, 9 and 16. I thank the Minister for moving Amendment 2 which, as he has explained, seeks to fulfil the commitment made in another place to strengthen the consultation provisions. As he will have gathered from our amendments, we do not think that government Amendment 2 goes quite far enough and hope that he will able to support the thrust of our amendments.
We believe in strong, proactive, responsible trade unions. A successful process of collective bargaining is to be valued and should be at the heart of how changes to arrangements such as the CSCS are given effect. As we discussed earlier, we share common cause in wanting the changes to be agreed by all. Amendment 2, in conjunction with Amendment 9, appears to set down a process for the future, as the noble Lord explained, because the new clause will not come into effect until two months after the entry into force of the Bill. That begs the question how we view the process in relation to the current changes to the scheme.
Leaving that aside for the moment, we consider that, although welcome, the proposed consultation requirements do not go far enough. In particular, we consider that there should be a role for Parliament in satisfying itself that due process has been undertaken. At this stage, we are not seeking to be unduly prescriptive of that approval process, so our amendment is a probing amendment. Having very much nailed our colours to the mast of collective bargaining, we do not see this as a way of second-guessing or overriding an agreement that has been reached.
If we are to move away from adverse changes to compensation arrangements requiring agreement, then, especially when agreement is not forthcoming, I suggest that the appropriate Minister should be held to account. It is also reasonable that the information contained in the report to Parliament is not necessarily determined just by what that Minister considers appropriate, but by what is relevant.
The passage of the Bill has been an opportunity for the Minister to update Parliament from time to time, and I am grateful that he was able to do that again at the start of our proceedings. However, such a requirement is not captured comprehensively in the form envisaged by government Amendment 2—whether or not strengthened by our amendment—so why defer the introduction of this reporting requirement until after the introduction of the currently planned changes to the scheme? Is there really any reason why a report, as envisaged by government Amendment 2, could not be laid before Parliament immediately on the coming into force of the Bill, as the noble Lord has said?
We recognise that there have been genuine and detailed negotiations. To simply collect that process and report it as the noble Lord’s amendment requires does not seem unduly burdensome. Presumably, were there to be any delay to the order of the laying of the scheme that drifted beyond two months, that would have to happen in any event because this amendment’s effect would be in place.
If he is keen on our amendment about a government process or approval by Parliament, the noble Lord may say that that process could delay the implementation of the scheme. Simply in terms of the Government’s own amendment, however, why is it impossible to have the same process for the scheme which now looks as if it will make progress as for that which the Minister envisages for the future?
Baroness Turner of Camden
I support both opposition amendments. When I first read the text of government amendment 2, I thought that I really could not accept an amendment that states,
“such information as the Minister considers appropriate”.
I do not think that that is satisfactory wording to have in an arrangement by which a Minister is bound to report to Parliament. It should not be up to him to decide what information is appropriate to report to Parliament. I do not think that that is acceptable. Therefore, I support these two amendments, which are reasonable in relation to the text of the government amendment. However, as I said earlier, I have some doubts about the Government’s attitude on these matters anyway.
Baroness Noakes
My Lords, perhaps the noble Lord, Lord McKenzie, could give a precedent for a consultation report being required to be both laid before Parliament and approved by Parliament. It seems to me that this is a novel procedure that the noble Lord is suggesting. I am not sure that he has made a case for a novel procedure in this Bill.
Lord McKenzie of Luton
My Lords, that is an interesting question. I am not sure that I could quote a precedent, but the fact that it may be novel does not mean that it is not a good idea. Are we not dealing here with something that is quite a significant step? To date, there has been the requirement for agreement. We know why agreement could not be reached when we tried it and why, although it has not run its course yet, it is proving to be challenging as well.
We are moving from a position where there had to be agreement from everyone to one where there need be no agreement. That is in the context of a compensation scheme that will impact the lives of tens of thousands of people in a very big way. Therefore, it is not unreasonable that a process should be undertaken whereby Parliament has the chance to ask whether these have been genuine negotiations. I should make it clear that I do not in any way challenge what has happened today as not being a genuine attempt to reach agreement—I am certain that it has.
A big step is being taken here in asking others, in particular the trade unions, to give up that right for agreement, so requiring that there be a process of Parliament to say that the requirements of consultation and engagement have been met should be something that they would wish to look at. I stress that I am not saying that Parliament should have the opportunity to unpick an agreement and to substitute its own view on what the agreement should be, as that should come from the negotiation. That is the basis on which I moved Amendment 3.
Lord Newby
Following up on that point, if it is the noble Lord’s intention that Parliament should not unpick an agreement reached by the Government and the unions, what would be the consequence of Parliament not approving a deal that had been struck as a result of collective negotiation? Giving Parliament a veto over the negotiations seems slightly odd. I thought that noble Lords opposite were trying to get a system going again under which there was free collective bargaining, in which Parliament will not be involved, and that the Government and the unions would just negotiate a deal.
Lord McKenzie of Luton
The noble Lord raises a good point. The problem with drafting one’s amendments and writing one’s speaking notes later is that one realises that one might have covered matters in a fuller way. However, if, for example, in a particular case Parliament was clear on the basis of the report that there had not been a proper, full and sensible negotiation, one could envisage that the adverse changes to the compensation scheme—we are talking about adverse changes—would not be supported and that there had to be another process to address that. I accept that the amendment as drafted does not flesh out that detail, but we will reflect on that before Report stage.
Baroness Noakes
My Lords, the noble Lord, Lord McKenzie, rests his argument on this being a very big change that requires Parliament to be involved. We have to be clear that, in the private sector, the practice is not for redundancy schemes to be agreed. If it was the practice in the past, it is not now. In the private sector, the practice is clearly that redundancy terms are not hard-wired into employment contracts—that was the evidence given to the other place in the Public Bill Committee—and, in my experience, even those organisations that had collective agreements around redundancy have moved away from that relatively straightforwardly. This is not a big deal; it is just modernisation of the terms and conditions that operate in the Civil Service.
Lord McKenzie of Luton
My Lords, I did not base my argument on the fact that there was comparability with the private sector. We know the history of the scheme—the Minister helpfully recapped on it on Second Reading—and that the prospect of compensation arrangements was an integral part of the terms and conditions, historically. It might be challenged as not necessarily the case now, but what people accepted in terms of salary, pension rights and compensation opportunities was seen as a package that was seen as collectively valuable. I suggest that it is a big step, for the people affected, to move away from that. It is right to do it—we have made that clear and support the Government in seeking to do it—but we think that there ought to be protections around it so that Parliament has a role and an opportunity to take a view on whether the process that should be undertaken, in a sense, to justify giving up unanimity is robust.
Lord Wallace of Saltaire
My Lords, at this stage I should declare an interest, in that I have a family member who is about to go on six months’ maternity leave and is not at all sure that her Civil Service job will be there when she comes back. The Civil Service has changed a lot over the past 20 years—civil servants indeed have to apply for their next positions—so life is not as it was when the 1972 Act was founded. I reassure the Opposition that the Government’s intention throughout is to be as transparent as possible about the proposed scheme and the consultation with the unions. If it helps the Opposition, I am willing to give a clear commitment that the coalition Government will table a Written Ministerial Statement at the point at which the scheme is agreed, to make sure that both Houses are fully informed of what has been agreed.
In answer to what the noble Baroness, Lady Noakes, said about this being an unprecedented development, I say that I am not aware of any precedent in which proposals of this sort have to be submitted for the approval of both Houses. I do not think that the previous Government would have wanted to accept that, and I am not sure that this Government wish to do so. Therefore, Amendment 3 is one that the Government are not in any sense minded to accept. However, I am prepared to look again at the wording of the proposed new clause to which Amendment 4 addresses itself to see whether there is any way in which we can meet the noble Lord’s concern over the inclusion of the wording,
“such information as the Minister considers appropriate”.
On that basis, I hope that he will be willing to withdraw Amendment 3 for the time being.
Lord McKenzie of Luton
My Lords, I am grateful to the noble Lord for the assurance about a Statement being made to both Houses, and that he will look again in relation to the wording on the information that needs to be provided. We will reflect on the debate that we have had about Parliament’s approval, but I beg leave to withdraw Amendment 3. In doing so, I say that although Amendment 2 is not as we would most like it, it is a step in the right direction so we feel able to support it today.
Baroness Turner of Camden
My Lords, I rise to move Amendment 5 and also to speak to Amendment 6. The amendments are all part of my position that I outlined when I said that I want to ensure that proper negotiations and agreement take place before any change is made to the redundancy and superannuation terms that we are discussing.
As I indicated before, there is a great deal of concern among the individual civil servants who have written to me, because they expect that, whether they like it or not, a number of them will face compulsory redundancy in a very short space of time. We know that the proposed new offer, which is now incorporated in the Bill in Clause 2(2), is not acceptable to the union or to the numerous individuals who have written in. The union points to:
“The absence of any form of underpin to allow people to earn more than 21 months, or transitional provisions or reserved rights to protect accrued rights”.
The union is very keen to ensure that accrued rights are protected and it points out that there is no attempt to do that in any provision in the Bill.
For that reason, it seems sensible to write into the Bill the requirement that any modifications—the union does not say that there should be no modifications, and it is willing to discuss alterations to the existing terms—should be introduced only,
“following consultation with, and the agreement of, the relevant trade unions”.
Reference has been made to comparisons with the private sector. When I was a union official, I had the job of negotiating for members in the private sector as well, so I think that it depends on what part of the private sector you look at. Some people in the private sector are reasonably well paid and have agreements that cover redundancy—it is not unknown for that to happen, particularly where there is an element of organisation among the employees.
In any event, the Bill deals with public sector employees, who have in many instances for years believed that they would have stable employment. In many instances, those people are not terribly well paid and might be less well paid than people in the private sector with similar qualifications or similar work, but they have nevertheless been prepared to work for the public sector for a number of years—some of those who have written to me have worked in the public sector for more than 30 years. Therefore, they feel that they are entitled to the conditions that were negotiated on their behalf, which they always thought that they could always look forward to in the unlikely event that they were made redundant.
It has to be understood that many of the people affected never previously contemplated the idea of redundancy or unemployment, because they believed that their employment was relatively stable. However, that has not turned out to be the case. Many of them realise that they now face closure of some offices, which means compulsory redundancy whether they like it or not. Therefore, we need to ensure that reasonable terms are maintained.
We will probably be told that the terms that were originally negotiated were far too generous and that the taxpayer should not be expected to have to shoulder such a burden. As a taxpayer myself, I have to say that a taxpayer is also an employer of the people who work for us in the public sector. As an employer, I want to ensure that the people who work for us are reasonably well paid and that the agreements negotiated on their behalf are kept as much as they possibly can be. For those reasons, I beg to move.
Lord McKenzie of Luton
My noble friend has, as ever, made a passionate and powerful case for ensuring that people are treated fairly, particularly in relation to compensation when she brought up pension rights. The amendments are an alternative means of achieving something that we have further amendments for later on. They are essentially seeking to get rid of the caps. We obviously support that.
In a sense, this approach is predicated on Clause 1 not standing part of the Bill, which it did. It is now more difficult for these to fit together, but the concept of getting rid of the caps is something that I thoroughly support.
The amendment raises the difficult issue of the extent to which there must be agreement. Again, we are at one in recognising that there must be a proper process. There must be a consultation and every effort made to end up with a negotiated settlement. My right honourable friend in the other place, Tessa Jowell, made clear that we accept that there would be circumstances in which changes would have to be made that did not rely upon agreement. We do not do so lightly, and nor, I am sure, does the Minister. To that extent, we may differ a little on my noble friend’s amendment, but we have some other amendments constructed to achieve, in large measure, the same thing: to get rid of those caps and the right to revive them at the earliest opportunity.
Baroness Noakes
The noble Baroness, Lady Turner of Camden, has said twice this afternoon that the civil servants who are potentially affected by the Bill are often not very well paid. This may have been the case in the past, but all recent studies show that on pay levels up to £40,000 or £50,000—that is, “well paid”—public sector employees are better paid than their equivalents in the private sector. What may have happened in the past, and may have been part of this notional package whereby people say, “I accept low pay and get a better pension and redundancy”, has, over the years, been completely eroded. The terms and conditions are collectively out of balance with private sector comparators. In particular, pay levels at the lower levels are high.
Lord McKenzie of Luton
Notwithstanding what the Minister has just said, I do not think that Clause 2 should stand part of the Bill, and think that the arbitrary caps it includes should go from the legislation. It follows that consequential amendments should be made to Clause 3 as excluding Clause 2 would make the sunset and sunrise provisions obsolete.
We heard earlier from the Minister that the Government have reached agreement with five of the trade unions and are still talking to the PCS. This is to be welcomed. It is the right way to bring about changes to the CSCS which we are all agreed are necessary. Although we recognise the remaining difficulties, it is still to be hoped that agreement can be reached with all the trade unions. As the Minister will by now be aware, the introduction of the caps in the first place has been hugely controversial. He and his right honourable friend in another place are on record as saying that they are a blunt instrument and not intended to be the last word. The Minister was clear at Second Reading that the Government’s intention is to reform the CSCS by negotiated agreement, rather than rely on the caps. We have heard today that work is now under way as a consequence of the negotiations to bring forward a new scheme as soon as the Bill becomes law. This, in any event, will require the repeal of Clause 2, as we heard earlier.
Lord Wallace of Saltaire
My Lords, logic might suggest that all we need in this Bill is Clause 1. I understand that point, but since the High Court judgment in May, it has become apparent that when the terms of the compensation scheme were subject to legal doubt, the purpose of restructuring within government might be stalled altogether, with consequential financial implications and uncertainty and consequent distress for staff. Having Clause 2 in reserve ensures that, if a scheme is subject to prolonged litigation, there is a provision which produces certainty and can be brought into force to prevent the process of government restructuring being put into limbo. Therefore, this is a reserve power which the Government are asking for which we hope will not be necessary. I stress again that it is a fallback in the event of refusal to agree followed by judicial challenge. The question then arises as to what the default position should be if a scheme is stalled by prolonged litigation. It is right that Parliament should decide in an Act of Parliament what the default position should be, hence Clause 2. I repeat: putting these limits into primary legislation leads to greater legal certainty and thus democratic accountability.
Lord McKenzie of Luton
My Lords, I will obviously not pursue the proposition that Clause 2 do not stand part of the Bill but, like the noble Baroness, Lady Noakes, I am struggling to understand fully the Government’s position on this, particularly in relation to the fallback. Can the Minister be a bit more specific on the fear that the introduction of the scheme, by way of order in a parliamentary process, is somehow less secure than caps being included in primary legislation as a fallback, particularly when those caps are, pretty much across the range, substantially more adverse than the scheme which is going to be introduced?
It seems to me that Governments, as they legislate, could argue right across the piece that there is always the prospect of a challenge. Somebody might take a different view—the courts might take a different view to the Government—and there are consequences of that. If there are, the Government have to face those consequences. I suggest that to try and build in, or hardwire, if I may use the expression, a sort of fallback position in all sorts of circumstances, particularly these, does not seem appropriate. It is something which concerns us greatly and to which we shall certainly return on Report. It is not only our view. The Delegated Powers Committee made a further point about reviving these provisions but, if we adopted this across all government legislation, legislation would be littered with provisions so that if there were a successful challenge here, there or anywhere else, there would be something in your back pocket as a fallback. That does not seem a very sensible basis on which the Government should legislate.
While I hear what the noble Lord said, I am not convinced by the proposition that he has made, certainly on the issues around the basis for discussion and interim solution. In a sense, that is now past and we have something which is, if not fully agreed, on the point of being implemented. Yet, as the noble Baroness said, Clause 1 has moved us on from it anyway, so I remain unconvinced. The issue of having a measure like this in the background, which of itself must be a deterrent for somebody who believes that they have a case in law to pursue, whether they are right or wrong, is that it must make it less likely that they would seek, in their terms, to get justice. That is a regrettable step as well.
Lord Wallace of Saltaire
Since the High Court judgment—since, indeed, one of the unions decided to take what had until then been negotiations to judicial review—we find ourselves in a situation where it is possible that judicial review may be used as a means of delaying the introduction of the scheme. If that litigation were to take a sufficiently long time, the current default would be the previously existing scheme. Now, the previous Government negotiated for some 18 months to change that scheme, rightly insisting—and having the agreement of the unions—that the previous scheme was no longer viable or affordable. We wish to make it absolutely certain that, in the event of continuing litigation, the default to any failure to introduce the new scheme would be enshrined in primary legislation, which is therefore much less open to judicial challenge. That is the justification for Clause 2.
Lord McKenzie of Luton
We are in danger of getting a bit repetitive. Could the Minister say a little more about why the primary route is more secure? Fundamentally, if the Government’s judgment is that there are risks around a legal challenge that could delay the implementation of the scheme, I would have thought that the Government should be concerned about that and should seek to address it—not by having this fallback position, which they have accepted all along they do not want to deploy, but by looking at the arrangements that they will implement to ensure that those are less likely to suffer the legal challenge that the Government clearly fear on this. It seems to me to be the wrong approach. If we think that people’s rights are being impaired and are not secure in our judgment about this, I would have thought that the thing to do is to change arrangements until we are secure. I know there is never certainty in everything in life, but that seems to be the right route for the Government, rather than to have this back-pocket fallback that, at their own admission, the Government see as a blunt instrument that they never intend to deploy.
Lord Wallace of Saltaire
I used to teach international politics, not law, and this is the point where I should appropriately offer to write to the noble Lord, and place a copy in the House of Lords Library, about the statutory basis of the scheme as it applies to the cap and to make sure that there are some informal conversations between now and Report to tease out the details of this difference.
Lord McKenzie of Luton
Could the noble Lord cover—or write to me on—the issue of timing? The issue was raised because I referred earlier to people knowing that the RDAs will go. With that knowledge, at what point do the processes start and at what point do either the current arrangements for compensation apply or new arrangements apply in the future? Does he feel comfortable about there being a level playing field in the way in which these are dealt with across the service?
Lord Wallace of Saltaire
My Lords, I am sure that the noble Lord is aware that, although the RDAs will disappear, some of their task will be undertaken by the new LEPs and some of those involved will, naturally, be strong candidates to find posts in those new sectors. This is not completely a zero-sum affair. I am very conscious that in Yorkshire, we have one of the more effective RDAs. We are now in the process of agreeing local economic partnerships and I have no doubt that many of the staff in the Yorkshire RDA will work for the Yorkshire-based LEPs.
Lord McKenzie of Luton
I shall speak to Amendment 11 only briefly since it generally goes over ground that we have covered quite extensively so far. It deals with the deletion of the provisions that enable the caps to be extended or revived after they have lapsed. I refer to the Delegated Powers and Regulatory Reform Committee report, which describes Clause 3(4)(c) as,
“somewhat different and more unusual”.
It goes on:
“This provision enables clause 2 to be revived at any time after its expiry or repeal, by order subject to affirmative procedure in the Commons. Paragraph 12 of the memorandum explains that the power is needed ‘if for some reason CSCS amendments cannot be implemented as anticipated’”.
It reaches this conclusion:
“The Committee considers that no convincing justification has been made for the unusual power in clause 3(4)(c)”.
Clause 3(4)(c) gives the power to revive the provisions. Can the Minister adduce greater justification than has been provided so far to the Delegated Powers and Regulatory Reform Committee?
The Delegated Powers and Regulatory Reform Committee’s report also raises the question of to which House the proposed orders are to be made. It focuses on the fact that they will generally, under the Bill, be made to the House of Commons, rather than to your Lordships’ House as well. There were, I know, issues around whether it is a money Bill and whether these are financial provisions, but the report draws parallels with previous legislation that has come before your Lordships’ House. Perhaps in responding the Minister could cover that point as well.
My noble friend has not moved her amendment, the thrust of which I support. It seeks to achieve what we seek to achieve by removing the right to revive or extend the sunset clause by a different route. These amendments are all part of a package through which we object to the caps. We certainly object to their continuance and the opportunities for them to be revived after they have otherwise been repealed or lapsed.
The Deputy Chairman of Committees (Lord Colwyn)
If this amendment is agreed I would be unable to call Amendments 12 to 14 because of pre-emption.
Lord Wallace of Saltaire
Before I reply to this, perhaps I may say a little about changing patterns of employment which affect redundancy and people moving from one job to another. I think there are some generational issues here. My father spent 40 years in the same job, apart from Army service, from the age of 15 until he was 60. The old pattern of employment in which you left school and expected to be in the same career until you retired is one that those of us of a certain age still cling to, but our children by and large do not expect to do so. The levels of turnover in the younger levels of the Civil Service are higher than in the older levels of the Civil Service, so there are certain generational issues here. Our younger generation is more attuned to the idea that you do not have a single career pattern or job pattern for life, and they are prepared to move. That is certainly the Government’s hope.
In discussing Amendment 11, it is almost unavoidable that I trespass on the amendments that will follow because the noble Lord, Lord McKenzie, has already mentioned the Delegated Powers Committee’s report. We have welcomed it and recognise that the sunset and sunrise clauses are open to question. We hope that the three-year time limit that the two government amendments in the next group will introduce will go a long way towards meeting the points raised by the committee about the power to revive Clause 2 by order. It seems to us that that is a reasonable response to the Delegated Powers Committee’s report.
As with much of the Bill, this is a question of how we ensure that we come to a satisfactory and stable settlement on the new compensation scheme by agreement as far as possible with the unions, but avoiding litigation that would challenge the new scheme. It is our hope and intention that Clause 3 would not have to be used for a further revival of the Bill at any point, but it is there to ensure that we have the necessary guarantees. I have already explained to noble Lords opposite what our hope and intention is when this Bill receives Royal Assent, so we hope that much of the Bill will thus be superseded. I hope that when we move on to the next group of amendments the noble Lord will recognise that the Government have moved some way towards recognising the concerns which the Delegated Powers Committee expressed and which this amendment seeks to address.
Lord McKenzie of Luton
My Lords, there are some further comments, and perhaps we can pick them up in relation to the next group that we are about to debate. I accept that the Government have moved some way but, I suggest, not very far. We can come on to that. I beg leave to withdraw the amendment.
Lord McKenzie of Luton
The Minister will understand that, as we do not like the caps and do not want them to continue in any form, we cannot support—although will not oppose today—this set of amendments. The Minister says that the amendments put a time-limit on the provisions but, as I read Amendment 14, it states:
“An order under subsection (4)(c) may not be made after the end of the period of 3 years beginning with the day on which this Act is passed (‘the relevant period’ … But the Minister may by order extend (on one or more occasions) the relevant period”.
Am I right that the import of that is: as long as it is done before the end of the three-year period, you can keep it going for another six months, then another six after that, then another six after that and another six after that? What on earth is the difference from the current position? Okay, you have to get your decisions in order so that you do not miss the deadlines but, if I may say so, that does not seem much of an advance on where we are at the moment. I would be very surprised if the Delegated Powers Committee was comfortable with that. What is the magic about three years, in any event, even if it was just three years and six months, which is not what the Bill provides? Is it not the case that if there is to be a legal challenge to the arrangements which are introduced, that is likely to happen quite quickly? It is unlikely that somebody would accept the scheme if they are unhappy with it, and wait X number of years before pursuing that, so why three years? What is the magic of that?
I do not think that the Minister has yet dealt with the issue about the recipients of the relevant orders and of that going only to the House of Commons, which is what the amendment preserves. It does not challenge that at all. I would accept that we have some advance here on where we are but, frankly, it is not much of one. The fact that we will not oppose it today does not mean that we will not wish to raise and challenge it on Report.
Another thing it does not do is to address the issue of being able to extend the sunset clause. That is in subsection (4)(b) of the provisions, while this is particularly addressed at subsection (4)(c), the sunrise provisions. I am not sure that it sets the sun on the sunrise provisions, because if I read it correctly—the Minister will no doubt sort me out if I am incorrect—there is the opportunity to keep this going in perpetuity, which simply cannot be right.
Baroness Drake
If I might concur with my noble friend Lord McKenzie, given a sunrise provision with a life of three years and a reading of the amendment which seems to suggest that there can be unlimited occasions on which it can be extended, that does not seem much of a concession—if I may presume, having not been in Grand Committee before. Even listening to the Minister’s argument that there is a need for a fallback position, surely that is still taking the need for it to an extreme extent, because if there were to be a human rights challenge from one or more of the unions I am sure that it would manifest itself very quickly. I cannot see them waiting indefinitely or until thousands of people are made redundant before they would make such a challenge.
I remain extremely concerned that this seems a very open-ended provision, even allowing for the argument put about the need for the Government to have a fallback position in the event of a legal challenge. If I were a trade union negotiator, I would feel very anxious about the integrity of the negotiating process on an ongoing basis if there were such an unlimited sunrise provision.
Lord Wallace of Saltaire
My Lords, there were two questions which I will take. One was the question that was rightly raised—I thank the noble Lord for reminding me—of scrutiny only by the other place. The second is on the justification for three years, which might be extended.
On the first, noble Lords will recall that there was some debate in the other place on whether this should be considered a money Bill, because it involves public expenditure. The justification for scrutiny only by the other House is that changes made by order under the Bill could have a direct impact on public expenditure, for example by changing the level of the caps as provided for under Clause 2 or by reviving the powers to impose caps under Clause 2 using the powers in Clause 3(4). These seem to the Government to attract Commons financial privilege. It is therefore entirely defensible for the Bill to have been drafted to allow scrutiny of these delegated powers in that House and not this one.
On the three-year time limit, it is not simply a question of when a judicial or a legal challenge might be mounted; it is a question of how long it might take for a process of appeal—for a legal challenge—to be worked through. I am sure that noble Lords who have been involved in trade union negotiations will recall how lengthy litigation can be as one moves from lower courts to higher courts and, when human rights considerations are at stake, even occasionally appealing to the European Court of Human Rights. The only reason why the three years is there—and why there is a permissible clause for extension by order each time, which has to be laid before the House for six months at a time—is for the extreme case that such successive appeals might be taken in an extended judicial process to try to prevent a compensation scheme being implemented.
I am willing to take this back to see whether it is possible to squeeze the three-year extension any further, but we are playing, as we can, with making the workable scheme possible. On that basis, I hope that the noble Lord may be willing to accept the government amendments as they stand.
Lord McKenzie of Luton
My Lords, I am grateful to the Minister for expanding on some of those points. Certainly, we do not propose today to oppose the amendments, but, as I said earlier, we will want to revisit them on Report. I am grateful for his offer to look at whether he could squeeze the number of opportunities in which the period could be extended. In doing so, in a sense, the Minister has accepted that, as drafted, you could have a succession of six months extensions which would go way beyond three years and six months. It could go on for a very long time.
There is no qualification here or criteria attached to when that extension might be sought. Despite the fact that it may be an order that has to go to Parliament, there are no criteria under which Parliament is able to judge whether that is a fair outcome or not. On the grounds that it is potentially more than three years, I am grateful for the Minister’s offer on that. It seems to be three years regardless of the circumstances. There needs to be no trigger which causes that extension to take place, which seems to be unfortunate as well.
I would stress that all of this is second order for us because we do not want it there anyway and we will continue to do what we can to get it removed. I hope, in that context, that the Minister will do what he can to see whether it can be further constrained. It does not seem to have moved that far from the starting position in the Bill.