Superannuation bill
Public Bill Committee, 14 September 2010.
Joe Benton (Labour, Bootle)
Before we begin, I would like to make some preliminary announcements. Members may, if they wish, remove their jackets during Committee sittings. Will all hon. Members ensure that mobile phones, pagers and so on are either turned off or switched to silent mode? As a general rule, my fellow Chair and I do not intend to call starred amendments that have not been tabled with adequate notice.
Not everyone is familiar with taking oral evidence in Public Bill Committees, so it might help if I briefly explain how we will proceed. The Committee will first be asked to consider the programme motion on the amendment paper, for which debate is limited to half an hour. We will then proceed to a motion to report written evidence, followed by a motion to permit the Committee to deliberate in private in advance of the oral evidence sittings. I hope that we will be able to deal with that formally. Assuming that the motion is agreed to, the Committee will move into private session. Once the Committee has deliberated, the witnesses and members of the public will be invited back into the room and our oral evidence sitting will begin. If the Committee agrees to the programme motion, it will hear oral evidence this morning and this afternoon. I hope that that is clear.
Joe Benton (Labour, Bootle)
Copies of memorandums for the Committee will be made available in the Committee Room.
Joe Benton (Labour, Bootle)
We will now hear oral evidence from witnesses from the Cabinet Office and the Hay Group. Welcome, and thank you for coming. For the record, please introduce yourselves to the Committee.
Joe Benton (Labour, Bootle)
Thank you. The panel will pose various questions and, as I have mentioned, the session will closely resemble the routine in a Select Committee, so I hope that that is satisfactory.
Harriett Baldwin (Conservative, West Worcestershire)
May I ask Mr Amroliwala about clause 2? As a new MP, it strikes me that it is quite unusual to have a sunset clause in primary legislation. Is it usual for expired primary legislation to be revived by means of a statutory instrument? Can you explain why it is considered necessary in this case?
Harriett Baldwin (Conservative, West Worcestershire)
If the negotiations were unsuccessful, the sunset provision took effect a year after Royal Assent and Ministers thought that it was necessary to revive the legislation using clause 2, would there not be a risk that the Government were effectively undermining the ability of Parliament to undertake proper scrutiny of the legislation coming back into force?
Tessa Jowell (Labour, Dulwich and West Norwood)
I welcome Mr Amroliwala to the Committee. He was the lead official on this issue when it was my ministerial responsibility in government. We have heard from the new Government that there are many civil servants sitting around doing nothing, because it is too expensive to make them redundant. Will you tell the Committee what advice you have provided to the Government on that issue? How many civil servants have you indicated are sitting around doing nothing?
Tessa Jowell (Labour, Dulwich and West Norwood)
Have you indicated that there are civil servants sitting around doing nothing, because it is too expensive to make them redundant?
Tessa Jowell (Labour, Dulwich and West Norwood)
Under the existing terms?
Tessa Jowell (Labour, Dulwich and West Norwood)
The February 2010 package was clearly costed on its savings over three years. What advice have you provided on the level of savings that will be realised by the Bill’s provisions?
Tessa Jowell (Labour, Dulwich and West Norwood)
For the benefit of the Committee, can you tell us what those are?
Tessa Jowell (Labour, Dulwich and West Norwood)
At that point—after 22 October—the existing, more generous terms will no longer be available to staff who are being made redundant.
Tessa Jowell (Labour, Dulwich and West Norwood)
I have two further quick points. The equality statement, which the Government are required to prepare alongside the Bill, seemed rather scant. Will you tell us about the methodology and the work that was done to answer the questions in the equality statement, or was it principally a desk exercise?
Tessa Jowell (Labour, Dulwich and West Norwood)
This legislation will have a substantially more severe impact on staff than the measures that were agreed with five out of the six unions in February 2010. Why were the options outlined in the Bill not put to Ministers at any time during the discussions that formed part of the preparation of the 2010 proposals?
Tessa Jowell (Labour, Dulwich and West Norwood)
Or before.
Tessa Jowell (Labour, Dulwich and West Norwood)
Perhaps the reason why you did not discuss the terms with the unions was that you knew that there would be absolutely no chance whatsoever of getting even one of the unions to agree to the terms in the Bill. The February 2010 proposals were agreed by five out of the six unions. As I am sure you accept, the point about the judicial review being an obstacle is easily met. The judicial review succeeded only because the proposals had not been reached by agreement. You can fix the 2010 package and meet the terms of the judicial review without dispensing with the whole package. Would you agree?
Tessa Jowell (Labour, Dulwich and West Norwood)
On a specific point—
Gavin Williamson (Conservative, South Staffordshire)
Mr Benton, can I perhaps have the opportunity—
Tessa Jowell (Labour, Dulwich and West Norwood)
Can I just finish the question?
Joe Benton (Labour, Bootle)
Order. I know that a lot of people want to ask questions, and you will have to leave it to my discretion. This topic is relevant and should be pursued, but I ask the right hon. Lady to bear in mind that other people want to come in, and we only have until 12 o’clock.
Tessa Jowell (Labour, Dulwich and West Norwood)
Certainly, Mr Benton. It is important to be clear about this point: the proposals in the February agreement could still stand and meet the grounds that they were struck down by judicial review, because the objection that was upheld in the judicial review was that they had not been concluded by agreement.
Tessa Jowell (Labour, Dulwich and West Norwood)
I am separating two things—the objection that was upheld in the judicial review and the intrinsic elements of the 2010 package. I take you to be saying that there is no objection to the intrinsic elements of the 2010 package, but that the objection that the court upheld was the failure to reach agreement on the terms with the unions at the time.
Tessa Jowell (Labour, Dulwich and West Norwood)
But my final point is—
Joe Benton (Labour, Bootle)
Order. I must curtail your questioning now, but if there is an opportunity, I will return to you later on.
John Hemming (Liberal Democrat, Birmingham, Yardley)
In a sense, I want to continue the points made by the right hon. Member for Dulwich and West Norwood. In essence, the law as it stands allows any one of the trade unions to veto a change to the agreement. One of the unions decided to use that veto to change the agreement, and the High Court—the administrative court—struck that down when it was taken to judicial review. Would I be right to assume, therefore, that you would advise any Government faced with this situation to use a legislative approach to open up the logjam?
John Hemming (Liberal Democrat, Birmingham, Yardley)
In that sense, this is a negotiating position, and we do not expect the proposals in the Bill to be final. You would not therefore advise the Government about savings on the basis of the figures in the Bill, because we do not expect that to be the final outcome.
John McDonnell (Labour, Hayes and Harlington)
I have three points, but I will be as brief as possible. They follow on from the point about the legal challenge. Mr Amroliwala, you have accepted in your introductory statement that this is open to challenge. Indeed, the PCS said at the Public Administration Committee that it would challenge it on human rights grounds. You also accepted that it could be open to successful challenge.
How robust is your legal advice, and how confident are you that the Government would defend their position successfully this time? Is it a 50:50, 60:40, or 70:30 chance of success? I ask the question because in previous meetings you were extremely confident in advising the Minister that the Government’s previous position was robust. In fact, you were virtually certain of victory in the courts, and then the Government lost. Last time round, the High Court ruled that redundancy rates are accrued rights. Therefore, that seems to be the basis of the challenge under European laws that the PCS will use. How confident are you? What have your lawyers advised is the percentage chance of victory?
In the Public Administration Committee’s discussion, the Chair said—as you have said—that if the courts rule against the Government, they could provide interim relief or, in the longer term, full redress. What calculation has been made for the potential provision of interim relief? Have you recommended that the Government have a contingency fund for such cases? I would also welcome an answer—if not today, by a note—about the cost so far to the Government of the legal actions that they have lost.
Secondly, very briefly, time and again in the debate we have discussed the number of staff who were on terms of five or six years’ redundancy payment calculations. The figures on the number of such staff and the overall cost of that are still to be disclosed. It would be helpful for us to have that information in advance of the final debate on the legislation.
Finally, in the negotiations that have taken place in the past, on a range of issues, I know of no example—[Interruption.]
Joe Benton (Labour, Bootle)
Order. I am sorry to interrupt, but there is a lot of background noise.
John McDonnell (Labour, Hayes and Harlington)
Thank you, Mr Benton. I thought there was heckling for a minute. I will be very brief. I know of no example where legislation has been introduced in this form during past negotiations or at their commencement. Will you tell us whether this sets a precedent? Are there other examples? In the previous discussions that took place under the last scheme, there was extensive consultation with staff. I compliment you on your role in that, Mr Amroliwala, and I hope that it does not affect your career in the future. Will you explain what consultation there has been, particularly on the implications for equality in individual Departments?
John McDonnell (Labour, Hayes and Harlington)
There may have been more; I am sorry.
John McDonnell (Labour, Hayes and Harlington)
Percentage judgment?
John McDonnell (Labour, Hayes and Harlington)
I asked whether you had recommended that a contingency fund should be established in the light of interim relief.
John Hemming (Liberal Democrat, Birmingham, Yardley)
Further to the legal points made by the hon. Member for Hayes and Harlington, would I be right in saying that the reason why you haven’t recommended that a contingency fund is established, or why you would have recommended any Government to go down this form of route, is that whereas a statutory instrument is secondary legislation and is subject to judicial review—either on human rights grounds, or on the fact that in the previous instance it was not in accordance with statute law—primary legislation, which this is, cannot be struck down through judicial review?
John Hemming (Liberal Democrat, Birmingham, Yardley)
In other words, the domestic courts cannot award any costs or compensation in that situation.
Richard Graham (Conservative, Gloucester)
May I return to the point mentioned by the hon. Member for Hayes and Harlington on redundancy rates? Is it really the case that the judge ruled that the redundancy rates in practice at the time of employment should be regarded as accrued rights? Is that the EU position as well? In which case that would presumably be a potential issue if primary legislation was challenged. My understanding as an employee in both the public and private sectors over the years has been that while pension rights are certainly accrued rights, redundancy payments are what are in practice by the employer at the time when anyone is made redundant. Could you clarify your views on the matter?
Richard Graham (Conservative, Gloucester)
I have a supplementary question on protecting lower paid civil servants, which is something that I think all of us, on both sides of the House, are keen to try to do as far as possible. I know that is one of the Government’s primary objectives in negotiating with the trade unions a settlement that will be different from that proposed in the Bill. Could you clarify whether you believe that the only way to protect the lower paid is through negotiation rather than primary legislation? If, by chance, one of the unions decided not to agree a negotiated settlement, would you consider amending clause 1 of the Bill to achieve greater protection of lower paid workers?
Richard Graham (Conservative, Gloucester)
But if by any chance the negotiations broke down, rather than going ahead with the Bill as currently proposed, would it be possible and practical to amend clause 1 to reflect the goal of trying to protect the lower paid?
Gavin Williamson (Conservative, South Staffordshire)
I think that all sides of the debate pretty much accept that the public services are going to be quite substantially restructured due to the budget deficit that we have inherited. In your view, is there any possibility that we could restructure the public services under the current civil service compensation scheme arrangements?
Gavin Williamson (Conservative, South Staffordshire)
But under the current financial situation?
Gavin Williamson (Conservative, South Staffordshire)
Would it be fair to say that the current civil service compensation scheme is substantially more generous than comparator schemes in local government?
Gavin Williamson (Conservative, South Staffordshire)
So it really is the necessity of the economic situation that we are in that means that this has to be driven forward, is it not?
Claire Perry (Conservative, Devizes)
Related to that question, a lot of myths are circulating about compensation, by which I mean weekly pay, pension arrangements and redundancy pay. It would be helpful to understand the true situation as you understand it as to whether there has been a gap widely in favour of the public sector versus the private sector, both in terms of redundancy pay, which this Bill tries to address, and weekly earnings and pension provisions. Crucially, we need to keep our talent flowing into the civil service and we need a strong and healthy public sector. Does this risk alter the compact that has been built and deter good quality candidates from entering the system at a time when we need fresh entrants, fresh ideas and fresh thinking?
Claire Perry (Conservative, Devizes)
Taking compensation in the round.
John Hemming (Liberal Democrat, Birmingham, Yardley)
Going back to the issue of the low-paid, I have a question for both of you. If we cannot get an agreement from the trade unions to have a better deal for the low-paid, it would be possible for the Government unilaterally to make a better deal for them under the terms of the Bill. I presume that that is true.
John Hemming (Liberal Democrat, Birmingham, Yardley)
Either by just agreeing that they will pay extra money or by having a statutory instrument to amend the measure to pay extra money to the low-paid. There does not have to be an agreement to make a better deal for the low-paid; that can be done unilaterally.
John Hemming (Liberal Democrat, Birmingham, Yardley)
I am just making that point. To protect the low-paid, the best thing is for them not to be made redundant. The Bill has the advantage that the cheapest people are not necessarily chosen for redundancy, and things can be structured so as to protect the low-paid that way. People talk about the low-paid and the high-paid, but it may be better to analyse by more bands. How would you each distinguish the various thresholds for the low-paid, medium-paid and high-paid? What would you suggest?
John Hemming (Liberal Democrat, Birmingham, Yardley)
It would be a good one for Peter to answer.
John Hemming (Liberal Democrat, Birmingham, Yardley)
It would have to go through as a statutory instrument to change it.
John Hemming (Liberal Democrat, Birmingham, Yardley)
Okay, but coming to Peter, I probably cannot ask what form protection should take, because that will be part of the negotiations as well. However, if you were advising the Government, how would you distinguish between the low-paid and the high-paid, and how should people be protected, apart from by aiming not to have redundancies in the first place?
John Hemming (Liberal Democrat, Birmingham, Yardley)
That relates to lower service, rather than low pay.
John Hemming (Liberal Democrat, Birmingham, Yardley)
Another issue that has been raised is that some people work part time, in some form or other, over part of the year. The amount that such people get paid over the year may be £20,000, but they are paid at a rate of £25,000. One asks the question as to whether they should be treated as low paid or high paid—perhaps we should try to look at what people are actually paid, rather than what their banding is.
John Hemming (Liberal Democrat, Birmingham, Yardley)
So you cannot comment on that.
Nick Hurd (Conservative, Ruislip, Northwood and Pinner)
I have two questions for Mr Boreham in the context of comparisons with the private sector. You will have heard from the debate in the House that a lot of importance was attached to protection for the lower-paid. In your written submission you stated that, in the private sector, the
“median redundancy payment is 3 weeks of pay per year of service.”
I wonder whether I could draw you out on making distinctions between treatment of people at the lower end of the pay spectrum and of people at the higher end, in terms of redundancy practice. My second question relates to your description in the written submission of
“a huge disconnect between redundancy payments to individuals with long and short service.”
Again, can I draw you out on your experience in the private sector of that disconnect?
Nick Hurd (Conservative, Ruislip, Northwood and Pinner)
Can you see how that outcome might have a prejudicial effect in terms of decisions on people’s futures and who gets made redundant?
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
Can Mr Boreham reflect on the influence on the private sector of the distortions from extravagant packages at the top end? It seems to me that we are talking about fairness and norms. How is that affecting the view of the work force in the private sector and, more broadly, employees’ views of what is fair?
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
We are trying to talk about what constitutes fairness in redundancy packages in the public and private sector. I understand that you have been called because you have expertise in the private sector. Perhaps the overlap between the two—and, in particular, the way that the top end of the private sector seems to have steamed ahead—affects perceptions and norms in the market.
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
I take your point that remuneration committees, although in the past not particularly effective as far as I can see, may not want to pay above-inflation increases, but do you think there is any possibility they will go for decreases?
Angie Bray (Conservative, Ealing Central and Acton)
A question for Mr Boreham, if I may. You mentioned that you felt that a redundancy payment is largely about tiding somebody over while they look for another job, but I wonder whether you think it reasonable that redundancy should also take into account somebody’s age. Clearly, some of the older civil servants may find it less easy to move on to further employment. I wonder whether that should be taken into account.
Angie Bray (Conservative, Ealing Central and Acton)
So it is a balance?
John McDonnell (Labour, Hayes and Harlington)
Just for the record, you were asked a question about the comparability between the current civil service arrangements—redundancy and compensation—and the most recent agreed arrangements for local government and health. Although it is true to say that the existing compensation arrangements for the civil service are better than the most recent local government and health conditions, the Government’s proposals in this Bill—that is all we have because we know nothing more about the negotiations—are significantly worse, are they not?
John McDonnell (Labour, Hayes and Harlington)
Well, they are worse by 50% in some instances, are they not?
John McDonnell (Labour, Hayes and Harlington)
That is considerable, is it not?
John McDonnell (Labour, Hayes and Harlington)
I see. To revise conditions?
John McDonnell (Labour, Hayes and Harlington)
Peter, all we can work on is what is in the Bill, and the Bill is a 50% reduction compared with what is going on in local government.
John McDonnell (Labour, Hayes and Harlington)
The ability to obtain the maximum, then—is there not a considerable distance between the Government’s proposals and what is extant within comparable services in local government and health?
John McDonnell (Labour, Hayes and Harlington)
That is not the same with the police or the fire service, is it?
John McDonnell (Labour, Hayes and Harlington)
Let me assure you that it is not. The other issue you raise, and it is a valuable point, is the one around the significant variation because of length of service. Have you read any of the statements that we have had in from other witnesses?
John McDonnell (Labour, Hayes and Harlington)
Let me just explain. What is interesting here—apart from some of the fairly worrying concerns that people have about the implications of the new scheme for their future lives—is the view that people who have been in the service for a long time have been in it for a whole range of reasons. They have accepted lower rates of pay because they have the security of other forms of payments, such as redundancies and pensions, and that comes across in a few of the statements. I can understand your concern about the differentiation over long service, but the reason why that has built up is that people have entered this service accepting, for a period of time, lower rates of pay because they have these other benefits. So they have taken a view in the round when they have chosen their career. I understand your view that that should not be such an overriding factor now. That is why in the private sector, where there have been changes, they have taken into account the historical decisions of their staff and they have applied new systems to new joiners.
John McDonnell (Labour, Hayes and Harlington)
On a large number of redundancies as well; many redundancies are in contracts of employment, so they have had to negotiate those. On many occasions, if you look across the field, they have applied the mechanism to the negotiations with new joiners. That is to ease the implementation of the mechanism itself. Has the consequences or financial implications been considered—perhaps Mr Amroliwala should respond to this—of applying this mechanism to new joiners only?
John McDonnell (Labour, Hayes and Harlington)
You have put your finger on it. It does change the deal and it changes unilaterally, because historically the people who will now be applying for redundancy came into the service on one deal—slightly lower pay in return for more secure and better provision on redundancy, pensions and so on—and now the Government are tearing up that deal. You have put your finger on it.
Nigel Dodds (DUP, Belfast North)
You mentioned in your written comments to the Committee the fact that the population affected by the Bill is relatively small. There has been some discussion about comparisons with the private sector and local government, but across the public sector as a whole, can you elaborate on the current position as far as redundancy schemes are concerned? Many people will be talking about the public sector compared with the civil service.
Nigel Dodds (DUP, Belfast North)
You talked about local government and the way things are moving, but right across the public sector as a whole, what is the position on redundancy compared with the civil service? What is the outlook?
Harriett Baldwin (Conservative, West Worcestershire)
I have a question for Mr Boreham about evidence that he might have from the private sector about the impact on mobility for the lower paid—the more junior staff—in organisations where the total compensation for senior staff being made redundant is reduced. Is there any evidence from the private sector on how that impacts on junior staff and their mobility?
Harriett Baldwin (Conservative, West Worcestershire)
And what about within the organisation itself—not between organisations but inside?
Gavin Williamson (Conservative, South Staffordshire)
How typical are the caps in clause 1 to private sector redundancy rates?
Gavin Williamson (Conservative, South Staffordshire)
I have picked up from your comments that under the current system, effectively the civil service is operating almost on a system of last in, first out. Is that really good for an organisation over the long term?
Gavin Williamson (Conservative, South Staffordshire)
When we talk about last in, first out, often it means that the younger people tend to be the ones who are pushed out.
Lindsay Roy (Labour, Glenrothes)
My question is to Peter. The Government say that they intend to bring practice into line with best practice in the private sector. What criteria have we used to determine best practice?
Lindsay Roy (Labour, Glenrothes)
And are these the ones that have been applied by the Government?
Lindsay Roy (Labour, Glenrothes)
Do you agree that there is a degree of subjectivity in what you are saying?
Lindsay Roy (Labour, Glenrothes)
Do you agree that this is not a simple matter?
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
This question is more for Mr Amroliwala. Have you in your own position—as well as the civil service more generally and the Government—reflected on how what seems to be agreed as a unilateral change in conditions will affect the productivity of many civil servants, particularly the lower paid? Has that been inputted into calculations?
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
Thank you. My worry about that comes from having one of the biggest HMRC centres in my constituency, in Cumbernauld, where many of the workers fit into the category that is designated as low paid. When I speak to them, they say, “Look at all these people up at the top making millions of pounds, with their bonuses, severance packages and share options.” That problem is not created by you or the civil service, but it will be difficult to convince these civil servants that any package along such lines is fair, because of the perception of what is going on at the top end—in the public sector too, but in the private sector in particular. I leave that on the table for reflection.
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
Thank you.
John Hemming (Liberal Democrat, Birmingham, Yardley)
It is in the register of interests, although it is not an interest for here, that I am a private sector employer and have been for 25 years. I currently have more than 150 staff. The best practice in the private sector is not to make redundancies, and to plan in such a way.
Mr Boreham, do you agree that the best practice in the public sector would have been not to overspend? As Lord Turnbull said recently, as did Tony Blair, the Government lost control of the finances. We should not have overspent and should not be in the situation of having to make redundancies.
John McDonnell (Labour, Hayes and Harlington)
Peter, I do not want you in a position in which you in any way mislead the Committee—you were not an advisor to the Government in the past in terms of redundancies and all the rest of it. I just want to say to Dusty that I know of no scheme in the public sector, and certainly in the civil service, that is based on “last in, first out”. In fact, every redundancy that has taken place in recent years has, in law, required the Government and Departments to identify the reasons for redundancy, to look at the restructuring, to go through a consultation process and to judge people on the basis of their ability to perform their duties in that redundancy situation. It is true, is it not, that there is no “last in, first out”?
I want to follow on with something because it relates to past practice. Let me go back to the individual representations that have been made to us, which are distressing at times. One person said that they did not have any redundancy mortgage protection insurance—they were worried about losing their home. When people entered the service, they saw the redundancy arrangements that would apply almost as their redundancy mortgage protection. They were not given the option of redundancy protection insurance because they thought that the terms and conditions on which they were employed would provide them with that protection. If you are in the private sector, you know that if the conditions are not particularly good, you can take out your own redundancy mortgage protection insurance. However, these people have not done that, on the basis of the calculation that if they ever entered a redundancy situation, they would be protected by the existing scheme. That relates back to the point Peter made—quite rightly so—that this tears up the original contract and undermines the accrued rights that people had looked to in order to guarantee their protection in the future.
John McDonnell (Labour, Hayes and Harlington)
No, but there are greater losers, and they have admitted the personal implications here. If they thought that this would happen some years ago, they would have entered into other forms of protection. We have denied them that opportunity by this unilateral action.
Dusty, could you comment on that issue of “last in, first out”?
John McDonnell (Labour, Hayes and Harlington)
It was used in the context of manpower planning, actually.
Joe Benton (Labour, Bootle)
This is likely to be the last question because we have to finish at 12 pm.
Claire Perry (Conservative, Devizes)
I want to ask about potential plans to extend this. We have talked about why it is not necessarily applicable across the wider public sector, but what about non-departmental public bodies, of which we have an enormous and proliferating number? Many of those are subject either directly or in shadow terms to similar pay, pensions and redundancy payments as under the civil service scheme.
Claire Perry (Conservative, Devizes)
I know that it is difficult to keep track of the NDPB estate, particularly given that we often get the proliferation of sons of quangos, but is your office confident that you would be able to say what number of people employed in the wider public sector would be subject to the caps?
Joe Benton (Labour, Bootle)
Time for one more quick one.
John Hemming (Liberal Democrat, Birmingham, Yardley)
When you are going through these processes, how do you minimise the effect on people? It is possible to bring in things at no cost that actually protect people, such as trying to ensure that there are never two redundancies in the same household, trying to ensure that redundancies are voluntary rather than compulsory, or offering sabbaticals so that staffing costs can be reduced gradually. Do you have any comments on those sort of ideas?
Joe Benton (Labour, Bootle)
Order. I am sorry, but that brings us to the end of this particular section. On behalf of the Committee, I would like to thank the two witnesses. Thank you very much for your attendance this morning and the helpful way in which you responded to questions.
Joe Benton (Labour, Bootle)
Welcome to our meeting. Thank you very much for coming. Would you first of all like to introduce yourselves to the Committee?
Joe Benton (Labour, Bootle)
Thank you very much. Our first question will be posed by Claire Perry.
Claire Perry (Conservative, Devizes)
I want to take forward a conversation we have been having with other witnesses about the compact—the whole bringing together of compensation levels, redundancy pay and pensions. One of the concerns it would be interesting to hear your views on is whether the specific changes in the Bill radically change the civil service compact or are they redressing a balance that has perhaps got out of line in the last years, particularly with reference to the private sector?
Claire Perry (Conservative, Devizes)
To paraphrase, are you suggesting that we have a situation where the overall compensation package in the public sector has got out of whack with that of the private sector, but we are having to deal with this now because of the economic trigger that has forced us to look for spending reductions?
Gavin Williamson (Conservative, South Staffordshire)
Would you in your professional capacity ever advise any of your clients to adopt a similar scheme to the current civil service compensation scheme?
Gavin Williamson (Conservative, South Staffordshire)
Yes.
Gavin Williamson (Conservative, South Staffordshire)
Would that be because it could put the business in peril and effectively affect the livelihoods of everyone else?
Tessa Jowell (Labour, Dulwich and West Norwood)
Could I ask all the witnesses to speak up because the acoustics at this end of the room are very poor and it is hard to hear what you are telling us?
I wanted to pursue a bit further this point about the public and private sector comparison and hear from each of you the extent to which you think that retaining differential rates in redundancy—compulsory or voluntary—between the public and the private sectors is fair and reasonable in the light of the other different employment circumstances of people working in the public sector versus the private sector.
John Hemming (Liberal Democrat, Birmingham, Yardley)
Given the current situation, with the previous Government losing control of the finances and the courts having vetoed changes to the superannuation scheme, do you think that the Government are right to be doing what they are doing? Are the Government missing a trick? Are there things that could be done to protect some of the people being made redundant, or to assist them in getting future employment? What suggestions do you have for the Government?
Harriett Baldwin (Conservative, West Worcestershire)
I do not know whether the panel has had a chance to read through the witness statements that were sent to the Committee by individuals across the country who are affected by the Bill, but copies are available. As I read those statements, I was struck by the personal circumstances. On the point to which you were just alluding, there are examples of people who are, for example, in the redeployment pool of the Ministry of Defence or are on what is known as the surplus list of the Department for Work and Pensions. As HR professionals, what advice would you give to your employers on best practice, given the current economic conditions? Do you see such schemes as being practical alternatives to redundancy? What impact do they have on mobility and the attraction and retention of staff?
Harriett Baldwin (Conservative, West Worcestershire)
Is there a relationship between the number of people who might find themselves in that situation and the level at which redundancy pay is set?
John McDonnell (Labour, Hayes and Harlington)
I take very seriously the comments that you made about process and the importance of taking time to do this, and about the implications on morale if issues are dealt with in such a way that people do not feel that they have been fully involved and consulted, and particularly the need to avoid any process of imposition, where people could feel that an injustice has been done to them. It is not for you to comment, but the general view of some of the trade unions is that that is what we could drift into if we are not careful.
You commented specifically on the civil service scheme. Have you looked at other public sector schemes for comparators, such as health, teachers, the fire service and the police? Do you have views about their schemes? The concern is that the Government proposals in the legislation—we do not know what is happening in the negotiation, as it is not for us to be told at this point in time—would mean that the scheme in the Bill is considerably worse than the comparators found in local government, health and elsewhere. What are your views on those other schemes? Do you see them as open to challenge, or do you see some form of comparability? You mentioned distortions between the private and public sector. If the proposals in the Bill are imposed, there would be a distortion within the public sector as well.
John McDonnell (Labour, Hayes and Harlington)
A bit like us then.
John McDonnell (Labour, Hayes and Harlington)
What about the Bill’s scheme?
John McDonnell (Labour, Hayes and Harlington)
Can you comment on the comparability? If it was imposed in that way, it would produce a distortion between the other public sector schemes, would it not?
John McDonnell (Labour, Hayes and Harlington)
It would, let me assure you.
The statements we have from the individuals reflect what the unions have told us. The issue of the compact was raised, and it was clear that a number of civil servants—they may be in a particular age group, I am not sure—entered the service on the basis that although there were lower levels of pay, there were arrangements beneficial to them, such as the pension and redundancy arrangements. They did not make alternative arrangements on that basis. They could have entered into mortgage protection schemes in case of redundancy, but they did not. Therefore, this unilateral tearing up of accrued rights is what offends them. I have operated in both the private and public sectors, and in the private sector, if accrued rights are withdrawn, often in negotiation, compensation will be paid for the withdrawal of those accruements. That has been the practice in the past.
John McDonnell (Labour, Hayes and Harlington)
But where they are defined in law as accrued rights, which these were in the previous judgment, in the normal run of things compensation would be paid if accrued rights were withdrawn, because otherwise the company would be open to legal challenge, would it not?
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
I want to go back to the question of whether the Bill is a basis for negotiation or an imposition. How could the employer, in this case the Government, go about convincing employees at this stage that they were prepared to negotiate in good faith? Is this kind of measure likely to be a successful way of building the trust that I assume is necessary for subsequent negotiations?
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
As this goes on, is there a productivity cost? You are all HR guys. The work force are understandably suspicious about what will happen to their redundancy packages in a context in which the Government are clear that they want to get rid of a lot of these people’s jobs. Is the productivity cost precisely quantifiable? Would it be fair to assume that there is a productivity cost?
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
Can I just ask a final supplementary? In the context of your comment about brand, Mr Wreford, the work force in the public sector perceive the brand in a slightly different way, so that might increase the notional sense of unfairness and contribute to the uncertainty and lack of productivity.
Tessa Jowell (Labour, Dulwich and West Norwood)
I wonder if you could comment on one of the apparent effects of the way in which the legislation would apply. Basically, the longer you work, the more you lose in the event that you are made redundant. In your experience, could that be described as age discriminatory?
Tessa Jowell (Labour, Dulwich and West Norwood)
May I ask a second question? On the differential rate for voluntary and compulsory redundancy, does voluntary redundancy under the current proposals attract a higher rate of severance? Is that conventional in the wider labour market beyond the public sector?
Angie Bray (Conservative, Ealing Central and Acton)
Presumably, in almost all circumstances, it is preferable to work on a voluntary basis if at all possible.
John McDonnell (Labour, Hayes and Harlington)
While we have you here, we might as well use your expertise. I have my own view on this, but I would welcome yours—it is a subjective judgment. You have put forward factors about the need for time and for avoiding a position that will impact upon morale, but if they are not taken into account and things go wrong, how long does it take an organisation to recover in your experience?
John McDonnell (Labour, Hayes and Harlington)
To all of you. Give us a subjective judgment based on your experience.
Joe Benton (Labour, Bootle)
If there are no further questions from the Committee, I should like to thank the witnesses for attending this morning and responding to the questions.
That concludes our business for this morning. We will take further evidence at 4 o’clock.
Joe Benton (Labour, Bootle)
Good afternoon. We will now hear oral evidence from the Council of Civil Service Unions, Prospect and the First Division Association. Perhaps the panel will briefly introduce themselves to the Committee.
Joe Benton (Labour, Bootle)
Thank you very much, and welcome. Before I call the first Member, I remind all Members that questions should be limited to matters within the scope of the Bill, and that we must stick strictly to the timings in the programme motion that the Committee agreed. I will try not to interrupt anyone in mid-sentence.
John Hemming (Liberal Democrat, Birmingham, Yardley)
In a sense, questions four and five are talking about where the negotiations go now, and that question is addressed to anyone involved in the negotiations. Obviously, you cannot talk about the details of the negotiations, but do you think that constructive negotiations are proceeding, following the introduction of the Bill? Is it possible to engage in constructive negotiations? Do legal or strike action, or threats of strike action, add to the process of potentially coming to a resolution or do they detract from it? How do you see things going from here?
John Hemming (Liberal Democrat, Birmingham, Yardley)
And you are the three who deal with negotiations?
John Hemming (Liberal Democrat, Birmingham, Yardley)
Perhaps I should say that the people on the panel at the moment had come to agreement previously.
John McDonnell (Labour, Hayes and Harlington)
One issue that we raised this morning was the potential for legal challenge. The judicial review confirmed, as you know, that the issues around the compensation scheme included accrued rights and that interfering with the possession of those rights would be in breach of the European convention on human rights. How confident are you that the Bill is actually unlawful and therefore open to challenge?
Claire Perry (Conservative, Devizes)
Thank you for your time this afternoon. One of the issues that we are all very interested in is the protection of the lowest paid who, of course, were exempted from our proposed civil service pay freeze. I would be very interested, in the light of what you were saying about the quality of outcomes, in how you think of the threshold. What actually determines low pay in your mind? Also, is a good-faith negotiation the best way to achieve that protection? Again, I would be very interested in your views on that point.
Claire Perry (Conservative, Devizes)
It is interesting that you say that, because of course we heard evidence this morning from a different group of witnesses suggesting that, in fact, there had been, if you take average incomes across the private and public sector, quite substantial relative increases in the public sector versus the private sector. Indeed, if you look at average weekly earnings in the private and public sector, there is now a discrepancy in favour of the public sector. What we are trying to understand is the whole compensation compact, which to me includes hourly earnings, pensions and, indeed, redundancy pay, and make sure that we have something that is fair and equable across the whole of the work force, whether public or private sector. I would be interested in your views on whether you feel that does or does not exist currently.
Tessa Jowell (Labour, Dulwich and West Norwood)
I want to return to what I think is the headline question. The Minister for the Cabinet Office has made it clear that he wants to see a negotiated agreement that will make the Bill redundant. If the February 2010 proposals were put back on the table, would you see them as a good basis on which to open negotiations, with a view to reaching a negotiated settlement?
Tessa Jowell (Labour, Dulwich and West Norwood)
Do you think that that applies to all six unions?
Richard Graham (Conservative, Gloucester)
Following the point made by my hon. Friend the Member for Devizes, can we just clarify with you all that, when oral evidence was given on 27 July, the reasons given by the PCS for not agreeing to the agreement put forward in the negotiations with the previous Government was that the majority of its civil servants earned less than £22,000 and that
“the sticking point for us in the last negotiations was over the level of protection there was to the lower paid in the Civil Service”?
Evidence given by either yourselves or your representatives from the same unions confirmed that the deal on the table for those who earned less than £20,000 was a retained three years’ pay. To quote the FDA representative, I think that you felt that it was the right balance in the agreement that everybody under £20,000 should retain pretty much the terms that they had.
The question in my mind is this. If the deal on the table for the lower-paid members of your unions was pretty good and the people who would miss out were predominantly the better-paid members, why did the largest union, which represents predominantly the lower-paid and has the largest number of them, turn down the deal? Can you explain to the Committee what the rationale was? Would you not agree that they have made a fundamental mistake in letting down the union’s lower-paid members?
Richard Graham (Conservative, Gloucester)
Quite so, but I would like your views, please.
Richard Graham (Conservative, Gloucester)
Can I put the question another way? Could you all confirm that from your unions’ point of view, the deal on the table then was attractive as far as the lower-paid members were concerned? For this purpose, we can define “lower-paid” as earning less than £20,000.
Richard Graham (Conservative, Gloucester)
But you would surely recognise, would you not, that the reason why this Government are introducing the Superannuation Bill is precisely that the previous package was ultimately rejected, as it happens, by the largest of the trade unions, and that reverting to the previous package is therefore simply not a practical option? Although you are obviously reluctant to separate out parts of the package, can you confirm what Jonathan Baume of the FDA said? He said specifically:
“We had protected over half the Civil Service and everybody under £20,000 retained pretty much the terms that they had”.
Surely that statement says that what was on the table was attractive to the lower-paid. Therefore, surely one union prevented a deal that would have protected the interests of the lower-paid especially, leading to a situation in which the Government have no option but to return to an issue unresolved by the previous Government with a Superannuation Bill to ensure that some solution is reached.
Richard Graham (Conservative, Gloucester)
I would conclude that all the members of your unions and members of the PCS have been badly let down by the PCS.
Harriett Baldwin (Conservative, West Worcestershire)
I want to ask an almost identical question to that of the right hon. Member for Dulwich and West Norwood. If the February 2010 deal were on the table once again, would your members settle for that deal?
Harriett Baldwin (Conservative, West Worcestershire)
I appreciate that you answered the question earlier, saying that it would be a good basis for the reopening of negotiation. I phrased it slightly differently. Would your members settle for that? One thing we can all agree on—and was agreed on Second Reading—was that a negotiated settlement would obviously be much better than this Bill having to be enacted. The question is: if the offer were back on the table, would your members settle for that?
Jack Dromey (Labour, Birmingham, Erdington)
First, I should declare an interest. I was for 15 years chairman of the Ministry of Defence Joint Industrial Whitley Council, representing industrial civil servants in the Ministry of Defence—at their height, 109,000 of them. I would like to explore the consequences of what is proposed in the Bill. I want to give you an example of an industrial civil servant in the Ministry of Defence and ask you, as unions representing non-industrial civil servants, if this experience is one that is common across the civil service.
I have a number of cases in front of me, but a particular one refers to Northern Ireland and a skill zone 3 vehicle maintenance fitter, earning £21,000, who commenced employment in 1982 and has had continuous employment since. Mercifully, as a result of the peace process, Operation Banner and normalisation, at a time when significant reductions were being made, he was offered £77,000, of which £14,000 was the financial recognition award, the additional payment on offer at the time. He was then asked if he would be one of those who stayed on, to ensure continuity of service to the Ministry of Defence. He considered it with his family, agreed to stay and, on doing so, was reassured that, if he went in subsequent years, he would not get the FRA payment but he would still receive £63,000.
As a consequence of what the Government now propose, if he is made redundant—fresh redundancies have been occurring in the Ministry of Defence—he will lose £56,000. Is that the experience of non-industrial civil servants?
Jack Dromey (Labour, Birmingham, Erdington)
With your leave, Mr Benton, may I ask some brief questions? It would be helpful if the Committee heard that testimony, because it is important that Parliament hears the consequences of its actions before it makes any final decisions on such matters.
I want to ask two other questions. First, are you aware of any precedent, in respect of any area of public sector employment, of statute being used unilaterally to change terms and conditions of employment—in this case, significantly for the worse?
Jack Dromey (Labour, Birmingham, Erdington)
I am not aware, Charlie, that the Council of Civil Service Unions represents French civil servants—you represent British civil servants.
Jack Dromey (Labour, Birmingham, Erdington)
Are there any precedents?
Joe Benton (Labour, Bootle)
I am in the hands of the Committee. I see no objection to it. If Karen Bell wants to make a contribution, by all means do so.
Jack Dromey (Labour, Birmingham, Erdington)
Can I ask one other question that follows on from that? Last week, the Minister for the Cabinet Office described the Bill as a blunt instrument, when bringing it before Parliament. What was your reaction to being told that a blunt instrument was being used against you?
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
I want to return to an issue that was raised a moment ago, which was the relative pay in the public and private sectors. It seems that underpinning many views on the Bill is a perception of public and private sector pay. Can I invite our witnesses to elaborate a little on that comparison and on why some of the things that are in the public sphere about that comparison may be unfortunate and inaccurate.
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
Are you are saying that it is comparing apples and pears and, more broadly, from the other answer, that this is a blunt instrument directed at perhaps the wrong target?
Richard Graham (Conservative, Gloucester)
Can I put a question?
Joe Benton (Labour, Bootle)
Order.
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
I was just going to ask, Mr Benton, whether it is possible to get information on relative pay in the public and private sector. Although it may not be seen as pertaining to the Bill precisely, it seems to me that it underpins a lot of the argument about the Bill. Can the statistical service produce a briefing on this comparison?
Joe Benton (Labour, Bootle)
Who are you asking to provide that?
Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)
The Library could produce it. It could be made available.
John Hemming (Liberal Democrat, Birmingham, Yardley)
Just a quick question to Karen, whom I would like to come back to. Would I be right in taking the figures that you have given us and saying that if you are made redundant now under the old system, or the agreed system from earlier this year, you would get £51,000? If you are made redundant under VR, under the new system, it would be £42,500, and under CR it would be £34,000. Is that right?
John Hemming (Liberal Democrat, Birmingham, Yardley)
I was just trying to clarify that. I have a question for the negotiators, although it is also relevant to all civil servants. If you were here earlier, you would have heard from the civil servant, who told the Committee what advice he would give to the Government had they not changed, if the judicial review had gone through as it did. His advice to the Labour party in government would have been exactly the same, which is to go down this sort of route, effectively, to remove the veto to any change. It is not good news to be made redundant; there is no question about that. You cannot pretend that that is good news in any way.
In what other areas, other than looking at the overall package, would the civil service unions look for things to be done? The example made by the hon. Member for Birmingham, Erdington was a good one, looking at an exceptional case where perhaps a person made a specific decision at the request of the Government and where there should be some exceptions. I have talked in the past about a constituent who happens to be in a household with two civil servants, who approached me and asked whether there was any way to ensure that we do not have both civil servants made redundant in the same household by allowing someone who has been made redundant to nominate someone else not to be made redundant. Is it possible, for instance, to arrange for sabbaticals for people? In the interest of trying to balance out different people, is it possible to move people from full-time jobs to job shares and achieve a reduction in the count without doing something that someone does not want to happen? At times that might be possible.
The point about all that is that it is a very difficult situation. Nobody would want to be in it. There may be things that can be done by being flexible. I think that the example made by hon. Member for Birmingham, Erdington was a good one, where there is a specific injustice, which will happen in a number of cases, that should be dealt with as part of the negotiations. Are they the sorts of things you think should be looked at in the first instance? Are there other things that you would wish to be looked at?
Angie Bray (Conservative, Ealing Central and Acton)
Just a quick question to Karen Bell. As some of my colleagues have said, any prospect of redundancy is a grim one. Given what you have told us about what you expect from the Bill that would be different from what you get now, will you and your colleagues, who may also be facing the prospect of redundancy, be putting pressure on your union to ensure that you get a negotiated settlement that will supersede the Bill? Will you hope therefore to get a more generous settlement.
Angie Bray (Conservative, Ealing Central and Acton)
I just wondered whether Karen wanted to comment on that herself.
Angie Bray (Conservative, Ealing Central and Acton)
I’m sorry. Given where we are with the Bill—you have given us the figures that you can expect and the changes it will bring—I am making a logical assumption that you and your colleagues will be urging your union negotiators to go for a negotiated settlement, which is far more likely to bring in a more generous settlement than if we settle with the Bill.
Angie Bray (Conservative, Ealing Central and Acton)
But is it your understanding that because negotiations are going on at the same time, a negotiated settlement might give you a better settlement?
Angie Bray (Conservative, Ealing Central and Acton)
Can I put a question to Mr Cochrane? You mentioned a little while ago that one of your concerns has been that it is always the junior staff who tend to find themselves made redundant first and make up a large number of those who are given redundancy. Would you agree that one of the points behind the cap in the Bill is to try and get around that particular problem, because historically it is those who are too expensive to let go who stay in their jobs, and it is those who are last in with the fewest rights accrued who are let go first. That is exactly what the Bill is trying to address.
Angie Bray (Conservative, Ealing Central and Acton)
I think everyone in the room values the work done by civil servants across the board. We know what excellent work they do and that goes without saying. We have been referring to the comparisons on occasion between the private sector and the public sector, and we heard that it was apples and pears and we should not be making that comparison. Can I get some comments on the public perception? Given the difficult times that the economy has been going through recently, the private sector has taken a huge hit and a large number of companies have been laying people off for months at a time or putting them on three-day weeks. There has been a lot of pain. Do you believe that the civil service understands that the pubic expect some shared pain—if you like—unfortunate though it is? We have to make the comparison, because the private sector has taken a big hit and many of its workers have had to be laid off for several months.
Angie Bray (Conservative, Ealing Central and Acton)
But within the economic circumstances we find ourselves in. That has to inform the whole—
Angie Bray (Conservative, Ealing Central and Acton)
Absolutely, I am sure that I would agree with that.
Joe Benton (Labour, Bootle)
May I just point out to the Committee that we have about 10 minutes of the session left and several Members have indicated that they wish to speak? I appeal to Members to keep their questions as brief as possible and I ask the witnesses to do likewise.
John McDonnell (Labour, Hayes and Harlington)
Members who are not here may engage in the debate on Report, so it is important that we get on the record today a clear message from you. I have a number of points. First, has the Bill helped or hindered the negotiations? Secondly, you are professional negotiators, and I welcome Karen’s input in particular, so what is the strength of feeling among your membership on the imposition of the Bill and the Government’s attitude so far?
Thirdly, on Second Reading, my right hon. Friend the Member for Dulwich and West Norwood raised the lack of information about the impact assessment of the Bill, particularly on equalities and other matters, with which I concur. What assessment have you undertaken of the impact of the Bill, particularly on equalities issues and how it will damage people’s lives? We have had individual submissions, to which we referred at length today, which relate to the “compact”, as it has been described. People have planned their careers and their lives around the compact—the balance between pay and the security of compensation arrangements on redundancy and the pension—but the Bill will tear up that compact. As we have seen in the individual statements, it will severely damage the lives of your members.
Paul Uppal (Conservative, Wolverhampton South West)
I know that time is of the essence, so I will be very brief. We have heard the Bill referred to as “a blunt instrument” many, many times. There is consensus on all political sides that the issues raised by the Bill must be addressed. The reality is that the last Government tried to address the issue; we spoke earlier about the February agreement. Ultimately, however, the reality is that that process failed.
I am just interested in the counter-view and perhaps a different argument. I know that you cannot speak about current negotiations, obviously, but I am interested in your views about the fact that the Bill contains sunset clauses. Does that provide you with any succour?
Joe Benton (Labour, Bootle)
This will have to be the last question and it will have to be a quick one.
Jack Dromey (Labour, Birmingham, Erdington)
Reference was made by the hon. Member for Ealing Central and Acton to public perception. On pay, can I put it to you, very quickly, that in the year to March 2010 pay in the private sector went up, according to the Office for National Statistics, by 3.6% but in the public sector it went up by 2.8%? Incomes Data Services estimates that in the next year, from April 2010 onwards, the average private sector pay rise will be 4% while the average public sector pay rise will be 1%.
On the issue of pay freezes, you have referred to pay freezes in the civil service. One million local government workers are also having a pay freeze, as opposed to 10% in the private sector in the year from April 2009 to April 2010.
Is it not the case therefore that the perception may be that in terms of—
Joe Benton (Labour, Bootle)
Order. I am sorry but we have reached the end of our allotted time for questions. I thank all our witnesses. We will now hear evidence from Fiona Draper and from the Public and Commercial Services Union.
Joe Benton (Labour, Bootle)
Thank you for coming. Perhaps you would like to introduce yourselves to the Committee before we start the questioning.
Joe Benton (Labour, Bootle)
Thank you very much. We will begin with a question from Gavin Williamson.
Gavin Williamson (Conservative, South Staffordshire)
Do you believe that the threat of legal and strike action will substantially change the Government’s bargaining position?
Gavin Williamson (Conservative, South Staffordshire)
With the benefit of hindsight do you think that it would have been better to accept the agreement that was put forward?
Gavin Williamson (Conservative, South Staffordshire)
Do you accept the need to reform the terms? Do you accept that the current situation that the Government have inherited means that there will have to be restructuring within the civil service, and that the current civil service compensation scheme is not viable as it stands, to be able to deliver the savings that are going to have to be made?
Harriett Baldwin (Conservative, West Worcestershire)
If the February 2010 deal were now offered again to your members do you think that they would vote to accept it at this point, or do you think they would vote to do what they did previously?
Harriett Baldwin (Conservative, West Worcestershire)
In terms of the agreement that came up in the debate on Second Reading, that everyone would prefer to see a negotiated outcome here, would you also subscribe to that view?
Harriett Baldwin (Conservative, West Worcestershire)
What impact is it having on the timing of negotiations? If the Bill were to receive Royal Assent by the end of October, my understanding in respect of current employees who have stated redundancy terms as of now, is that those which apply currently would still apply up until the Bill receives Royal Assent. Does that have an impact in terms of the timing of your willingness to come to a negotiated agreement here?
Harriett Baldwin (Conservative, West Worcestershire)
And the major sticking-point, from PCS’s point of view?
Tessa Jowell (Labour, Dulwich and West Norwood)
I want to follow up this point, because as you will have gathered, the questioning from the Opposition side and, I think, from some hon. Members on the Government side has been very much to establish what the ball park for a negotiated settlement is, so we keep coming back to the February 2010 agreement. I think that it would be difficult if the view conveyed to the Committee is that that remains inadequate. However, as you said, Mr Lewtas, the PCS took the previous Government to judicial review and won, so that deal was essentially struck down and could only be resurrected if the issues of contention, particularly in relation to accrued rights, were resolved by negotiation. The Minister said during the debate that, had an agreement been reached, there would have been a pressing case to honour it. As a national officer, you speak for the union, so if that deal were put back on the table with a view to reaching a negotiated settlement without the disruption of industrial action or, indeed, the damage that imposing the Bill’s powers would do, are you optimistic that the PCS would find an accommodation that would not lead to a further judicial review or leave the Bill’s provisions as the only available option on the table?
Tessa Jowell (Labour, Dulwich and West Norwood)
That is very helpful indeed. I want to follow on from that. Are you aware of any of your members sitting around with nothing to do because they are too expensive to make redundant?
Tessa Jowell (Labour, Dulwich and West Norwood)
I think that is helpful.
Tessa Jowell (Labour, Dulwich and West Norwood)
On the basis of what we heard from Mr Amroliwala this morning, we can take that as being not true. In fact, other duties are being found for staff in, for instance, the Central Office of Information, whose functions may be being wound down. It is important to get that clearly on the record.
Richard Graham (Conservative, Gloucester)
Thank you all for coming. My first question is to Fiona Draper. In the advice that you give your clients, how do you separate, or do you treat as exactly the same, the question of the rights—in particular, the accrued rights that are due to individuals who serve an organisation that has a pension scheme and the “rights” attached to provisions for superannuation?
Richard Graham (Conservative, Gloucester)
Let me try again in a slightly different way. Do you regard the “accrued rights” of provisions for redundancy as accrued rights in the same way that a pension scheme accrues a pot of money that builds up during service with that organisation?
Richard Graham (Conservative, Gloucester)
Can I turn to Geoff Lewtas, who represents PCS? During the verbal evidence given on 27 July, as you may have heard earlier, I put to some of the gentlemen representing other unions the quotation from your colleague, Hugh Lanning, who said:
“the sticking point for us in the last negotiations was over the level of protection there was to the lower paid in the Civil Service.”
I gather he also said that half of the 300,000 civil servants who are your members earn under £22,000 a year. Under the negotiations held by the last Government, anyone who earned under £20,000 would have retained three years’ pay. What makes you think that you will be able to achieve a better settlement than that for the lower-paid, given that all the other unions believed that that was a fair deal?
Richard Graham (Conservative, Gloucester)
Of your 300,000 members, how many responded to the ballot? Of those who responded, how many were in the lower-paid category?
Richard Graham (Conservative, Gloucester)
I think that would be very helpful. The suggestion has been put to me that the turnout in the ballot was no more than 20%. If a narrow majority of that took the union’s position that it should reject the offer on the table, the question in my mind is whether that really represents the interests of more than half your members—150,000 people—who form the category of the lower-paid. If very few of them actually responded to the ballot, or voted in favour of it, I wonder whether the question is the extent to which the union’s leadership was letting down the lower-paid members.
Richard Graham (Conservative, Gloucester)
In the advice that you gave to your members, did you provide them with the fact that your own negotiators had accepted the original deal and that all the other trade unions had as well?
Richard Graham (Conservative, Gloucester)
You are denying that your own negotiators came away from the meeting with a positive recommendation.
Richard Graham (Conservative, Gloucester)
If I was still a civil servant—still on that salary—and I was a member of your union, if the eventual deal is agreed, or if a deal is not agreed and the provisions of this Bill go through, I would feel extremely let down by my union. What would you say to any of my constituents who felt that way?
John McDonnell (Labour, Hayes and Harlington)
I would just like to clarify the issue of the ballot, because it comes up time and again. It would be useful to have the exact figures. But when it comes to industrial action, you are required in law to ballot all members and accordingly to inform the employers where the members are located and their grades and job descriptions.
John McDonnell (Labour, Hayes and Harlington)
So everyone has the opportunity to engage in the ballot. The policy on this matter is therefore determined by your members and not by union officials. Is that true?
John McDonnell (Labour, Hayes and Harlington)
May I just go back to the points that we raised this morning? It is important that we get the PCS’s view on the record for other Members. You have heard the comments from other trade unions represented here today. Has the Bill helped or hindered negotiations? That is the first question that we asked the others, and it would be helpful to have your view.
Secondly, you heard this morning the discussions on the legal opinions. In the last round of negotiations, the Government lawyers were adamant that the PCS had no case in law. You went to court, and you won, and the judge determined that these were accrued rights. May I ask you the same question that we asked the civil servant this morning? Given that track record, how robust is your legal opinion this time around, in relation to resorting to Europe in terms of human rights, and how strongly are you advised that you would win? Your deputy general secretary said before the Public Administration Committee that the union would, if necessary, resort to law. So that strength of opinion is important.
Finally, on the issue of impact, your union represents the lowest-paid. We have had individual submissions, and we have had other unions’ assessment of the impact. What is the impact on your members of the Bill itself? We do not know what you have been negotiating, so what is before us? What is the impact on your members, particularly in terms of the equalities impact?
Jack Dromey (Labour, Birmingham, Erdington)
Can I ask one question comparing public and private, and then some questions in relation to the negotiating process? Do you have members who perform call centre functions?
Jack Dromey (Labour, Birmingham, Erdington)
Are you aware of the difference between comparable employees in call centres in the public and private sectors?
Jack Dromey (Labour, Birmingham, Erdington)
It would be helpful if you made those reports available, because we need to address the issue of perceptions, which one of my colleagues referred to earlier.
I want to ask you about the negotiating process. Are the negotiations under way?
Jack Dromey (Labour, Birmingham, Erdington)
Do they involve all the unions?
Jack Dromey (Labour, Birmingham, Erdington)
Do you want a negotiated settlement?
Jack Dromey (Labour, Birmingham, Erdington)
As soon as possible?
Jack Dromey (Labour, Birmingham, Erdington)
Can I ask you a crucial question? We are not here to negotiate a settlement, but we need to know on behalf of Parliament whether a negotiated settlement is possible. Reference was made earlier by Members on both sides about the offer that was put forward in February 2010. What would happen if that were put back on the table? Do I conclude from what you said earlier that if that were put back on the table, in terms of quantum and shape, that might form the basis for a settlement if some of the issues about the shape of the package were addressed?
Nick Hurd (Conservative, Ruislip, Northwood and Pinner)
May I push you a little further, Mr Lewtas, on what has been a common theme of Committee members’ questioning? Let me put it more explicitly today. Would you, as an executive, recommend to your members acceptance of the February package?
Nick Hurd (Conservative, Ruislip, Northwood and Pinner)
Thank you for that. Members are keen to get a sense of how seriously the negotiations are taking place. None of us is party to them on a day-to-day basis, but it is the backdrop to the Bill. Of particular interest is the degree to which your union is engaged with the process. As I understand it, the meetings are regular, quite intense—almost daily, I think that the Minister for the Cabinet Office said. Can you confirm whether the PCS has attended all the meetings, or give us a sense of what proportion of meetings you have attended and, therefore, the degree to which you are actively engaged in trying to negotiate a settlement?
Nick Hurd (Conservative, Ruislip, Northwood and Pinner)
Thank you. My third and final question is: who do you think won from your decision to pursue a judicial review?