Superannuation bill

Public Bill Committee, 16 September 2010.

Roger Gale (Conservative, North Thanet)

Good morning, ladies and gentlemen. I know that you had Mr Benton’s company for earlier Committee proceedings. You have mine for the rest of the duration of the Committee stage. Housekeeping arrangements—hon. Members may remove their jackets if they wish to do so. If you wish to catch my eye, it is a good idea to call me either Mr Gale or Chairman. I do not mind which. I go curiously deaf when people call me Chair.

I have spoken to both Front-Bench speakers, and I take a relaxed view of clause stand part debates. For those who have not served on a Committee before, at the end of debate on amendments, the question is put, That the clause do stand part of the Bill, as amended or not. You then have an opportunity to have a tiny wrap-up debate. However, in a Bill such as this, which is quite complex, it is often helpful to have a broader debate at the start, on the first group of amendments. If the right hon. Member for Dulwich and West Norwood wishes to do that in this case, with the agreement of the Minister, I am more than happy for that to happen, on the clear understanding that there will not then be a clause stand part debate.

There are colleagues on both sides of the House who have not sat on a Committee such as this before. If you have any problems or queries, or if there is anything that you do not understand, please do not hesitate to ask. Do not sit in gloom and darkness all morning wondering what is going on. The amendments are grouped in accordance with their legal and position of influence in the Bill, so you might find amendments to clause 2 that are in fact debated with clause 1, because they are relevant to the same subject. Those will then be put to a vote—if there is a vote—later. As I said, it is an arcane process. It takes time to understand, so if anyone has any questions, please do not hesitate to ask.

Clause 1

Tessa Jowell (Labour, Dulwich and West Norwood)

I beg to move amendment 1, in clause 1, in page 1, line , leave out lines 7 to 10 and insert—

Roger Gale (Conservative, North Thanet)

With this it will be convenient to discuss the following:

Amendment 3, in clause 1, in page 2, line 3, at end insert—

Amendment 2, in clause 1, in page 2, line 4, leave out subsections (5) and (6).

Tessa Jowell (Labour, Dulwich and West Norwood)

We had two excellent sittings earlier this week. I welcome the spirit in which Government Members have approached the close questioning and their clear desire to seek proper understanding of the impact of the changes on the civil servants who stand to be so substantially affected. As we consider improving the Bill, it is important to remember that it is a time of considerable uncertainty and anxiety for thousands of civil servants. The Bill is not simply a blunt instrument for negotiating purposes. If it finds its way on to the statute book in its present form—unamended—it could be vital to their lives.

We heard eloquent accounts from two civil servants about the impact of the changes on them personally. Karen Bell, the Central Office of Information civil servant, testified that she faces being made redundant in November and will lose £17,000 if she is made compulsorily redundant. The six to eight months that that would allow her to find another job she considers difficult, given her age and circumstances.

We also heard from David Cowell, a member of the Government office network. He faces a real threat of compulsory redundancy. In his written evidence, he said that the passing of the Bill would mean that

“it is highly likely that my house will be re-possessed by the lender and I will become homeless as well as probably jobless.”

Those are two human examples of the hardship and the potential impact of the changes on civil servants.

The Government in our sittings and on Second Reading set great store by their stated ambition of reaching a negotiated settlement. However, our scrutiny in Committee and elsewhere must ensure that the legislation that reaches the statute book is practical, fair and in the long-term interests of the civil service work force and the country. The Opposition’s argument is that the legislation, without amendment, meets none of those tests.

As Mr Dusty Amroliwala said in his evidence on Tuesday, he

“cannot for the moment see circumstances in which, if we were not to reach an agreement with the unions on a long-term deal, we would recommend to Ministers that they should exercise the provisions of the sunset clause.”––[Official Report, Superannuation Public Bill Committee, 14 September 2010; c. 4, Q3.]

That makes one thing clear—the Bill is designed to be used and will set the terms under which thousands or, indeed, tens of thousands of Karen Bells or David Cowells could be made redundant. For them, the Bill represents whether they will keep their homes, help their children through university or avert acute financial hardship while looking for a new job. It is not simply a blunt instrument to be used in negotiation.

The Opposition believe that the amendments would improve the Bill, to strike a fair balance between the interests of the taxpayer and the reasonable and, it is fair to say, established expectations of civil servants. The existing caps set out in the Bill are unfair and discriminate against those civil servants who have worked in public service for many years. At a time when their jobs are being threatened by substantial cuts to departmental budgets, low-paid and long-serving civil servants could see their redundancy packages cut by up to two thirds of what they would have received under the scheme put forward by the previous Government.

Our argument, therefore, is that the February 2010 scheme should form the basis of the reform that we all agree is needed. It meets the tests against which reform should be judged, such as making a substantial contribution to tackling the deficit—£500 million was the accumulated saving under the 2010 package—while also ensuring that the reasonable expectations of civil service staff, and the lowest-paid in particular, are met. It was also important to address, as we sought to do, the age-discriminatory aspects of the earlier arrangements.

Gavin Williamson (Conservative, South Staffordshire)

What the right hon. Lady is saying is informative, but the Public and Commercial Services Union seemed interested to state that the February negotiations should be the starting point, rather than an end point. Do you believe that is feasible, or were the February negotiations by far and away too generous?

Roger Gale (Conservative, North Thanet)

Order. The right hon. Lady will answer in a moment, but first some standard procedure—it is a learning curve for everyone. Please address the Chair: do not use “you”, but “the hon. Lady”.

Tessa Jowell (Labour, Dulwich and West Norwood)

Right hon. Lady.

Roger Gale (Conservative, North Thanet)

The right hon. Lady.

Tessa Jowell (Labour, Dulwich and West Norwood)

The hon. Member for South Staffordshire ought to know that I will address that point later in my remarks. I think that what we heard from PCS was essentially a negotiating stance. Anyone who has been involved in such negotiations would understand the difficulty of being put on the spot and, as Mr Lewtas the senior official from the PCS said, of revealing the negotiating hand when negotiations are being actively undertaken.

As Peter Boreham said in the evidence session, a two-year cap is not out of line with the private sector, but in line with what some of the—regarded as better—private sector organisations are offering. The amendment would bring the maximum cap for redundancy in line with other parts of the public sector, including local government, education and the national health service. It is important to underline that that emerged from an eight-month consultation between the Government and the civil service unions, and that we, on the Opposition side of the Committee, are confident that that would provide a fair resolution of this issue.

All six of the civil service trade unions have expressed their support for the use of the principles underpinning the scheme as a basis for moving forward. I would like to take the opportunity to pay tribute to the open-minded way in which the Minister approached questioning the trade unions earlier this week. He showed himself to be genuinely engaged in seeking to reach a negotiated agreement with the unions that is fair and recognises the principles that we established. The response from the PCS official on Tuesday should perhaps be seen in the context of negotiation, rather than as a clear statement that shuts the door on the possibility of reaching a negotiated settlement on the February 2010 provisions.

The amendment would end the undesirable differential between compulsory and voluntary redundancies. That is something that we need to address with some care. Several witnesses commented on the fact that staff who volunteer for redundancy are likely to be more highly skilled, better paid and with the prospect of future employment. More attractive voluntary terms may, therefore, result in the civil service losing some of its more talented staff. The officials negotiating with the unions were particularly exercised about that when we were in close discussion about the February package. It is important, however the matter is resolved, that there is not a perverse incentive in the provisions. In the evidence session, David Wreford from Mercer stated that

“It is often counter-productive”

as

“People who volunteer tend to be most attractive to the market and…so you typically find that…those who step forward for voluntary terms are not the ones you would have otherwise chosen as part of the selection process.”––[Official Report, Superannuation Public Bill Committee, 14 September 2010; c. 34, Q89.]

John Hemming (Liberal Democrat, Birmingham, Yardley)

Does the right hon. Lady accept that, if those people who accept voluntary redundancy are more likely to get a job, and those who do not accept voluntary redundancy are less likely to get a job, we are likely to see fewer people out of work?

Tessa Jowell (Labour, Dulwich and West Norwood)

That depends on the level of impact of the Government’s forthcoming cuts, to be announced in the spending review on 20 October, on job numbers in the civil service. So I do not think that that is an answer that we can give at this stage.

John Hemming (Liberal Democrat, Birmingham, Yardley)

I thank the right hon. Lady for giving way again. I would like to address a point she made earlier. She said that Mr Boreham said that two years’ or three years’ redundancy pay is not out of kilter with the private sector. I have being trying to find that in the evidence, but have found that he said:

“Last year, a number of private sector businesses took the opportunity to reduce their redundancy terms simply to make them more affordable, given the financial situation that they were facing.”

Moreover, Mr Boreham goes on:

“The private sector is also pulling down redundancy terms on the grounds of affordability. So, there is a significant gap between public and private sector redundancy in financial terms.”––[Official Report, Superannuation Public Bill Committee, 14 September 2010; c. 12-13, Q24 and 26.]

That seems to disagree with the right hon. Lady’s report of what Mr Boreham said. Will she clarify the source of her information?

Tessa Jowell (Labour, Dulwich and West Norwood)

Let me come back to the specific reference. I think that the gist of Mr Boreham’s evidence was on the benefits of good practice in minimising the long-term damage to the work force that provisions that are considered to be unfair and overly mean can inflict. It is wrong that those who are made compulsorily redundant should receive significantly worse terms than those who leave voluntarily.

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

May I bring the right hon. Lady back to the point of the distinction between voluntary and compulsory terms? There is an important difference between our views on it. Does she recognise that the ultimate decision on who stays and who goes rests with the manager? There is a logic to increasing the incentives for voluntary exits in order to increase the pool of options available to managers. At the end of the day, it is managers who will decide, and that will help mitigate the risk articulated by the right hon. Lady about different incentives facilitating the exits of people whom we might not want to lose.

Tessa Jowell (Labour, Dulwich and West Norwood)

The decision about who goes and who stays is, of course, ultimately a decision for the authorised manager, because they will have to sign off the terms of the deal. However, reflecting on my own experiences as a former Minister for the Cabinet Office, there is considerable concern that a voluntary scheme that is significantly more generous than a compulsory one produces, and is at risk of producing, a perverse effect: the numbers may go down and the savings may be achieved, but we may end up losing some of the more talented staff, who will be able to find positions elsewhere.

One of the issues raised by the trade unions during discussions was the importance of a proper human resources strategy for managing the underperformance of staff who might otherwise be made compulsorily redundant. It is very important that the way in which the provisions are applied achieve the desired effect, which must be a civil service that is capable and has the capacity and the skills to deliver the intended policies of Ministers.

Harriett Baldwin (Conservative, West Worcestershire)

I completely agree with the Government on the point of view of the employer. However, we heard a lot of evidence from trade union representatives who effectively said that they would much prefer a redundancy process with great emphasis on those taking voluntary redundancy, and that the terms of the Bill give an added attraction to those made redundant on that basis.

Tessa Jowell (Labour, Dulwich and West Norwood)

Ultimately, however, that is part of the negotiation process. Ministers face having to manage an accelerated reduction in the capacity of the civil service to deliver policy. Civil service managers in all Departments will have to judge which staff have the skills necessary to continue doing a good job of delivering policy. We cannot have a situation whereby the people who leave are simply those who want to leave. That would leave managers having to organise and manage the remaining capacity, made up of the staff who wanted to remain for whatever reason.

Much of our discussion on Tuesday focused on the pay differential between the public and private sectors. The Office for National Statistics released a further report yesterday. I underline the point made by Mr Carl Emerson of the Institute for Fiscal Studies that public sector workers tend to have higher levels of qualifications, skills and experience.

Pay for comparable jobs is not higher in the public sector than the private sector, but the people doing them are likely to be better qualified. Pay in the civil service is substantially lower than in the private sector and other parts of the public sector. The median salary is about £22,000 a year and 40% of civil servants are paid less than £20,000 a year. Enhanced redundancy protection has formed part of a compact that has built the commitment of such people to work in the civil service.

The Minister has said on a number of occasions that he wants to protect the lowest-paid, and we agree with that aim. His colleagues have said that they want to protect the lowest-paid, and Mr Dusty Amroliwala told us that he wanted to do so. There is consensus across the House that that is the right course of action. However, if we do not agree to the amendments, we risk failing thousands of low-paid civil servants, whom we have all said we want to protect.

Negotiations may provide a fair settlement for the low-paid, but that is not guaranteed. Tens of thousands of people may be made redundant over the next year and that may well be done under the terms of the Bill. Such people will face the real life circumstances that two of our witnesses so vividly described. The Committee must not forget the heavy responsibility that it carries.

John Hemming (Liberal Democrat, Birmingham, Yardley)

One point that has been made from the Government Benches is that there is an interplay between the number of redundancies and the redundancies package. Is the right hon. Lady arguing for her proposals in the knowledge that they would lead to more redundancies? Is that a price worth paying?

Tessa Jowell (Labour, Dulwich and West Norwood)

The hon. Gentleman’s point is not wholly clear to me. I am explaining what I fear will be the consequences for lower-paid civil servants if the Bill is passed unamended. I therefore commend the amendments to the Committee.

Roger Gale (Conservative, North Thanet)

Before we proceed, a few words of explanation may be helpful, particularly for Members who arrived after the Committee started. We have grouped three amendments. As always, only the lead amendment will be decided on automatically and may be put to a vote if the mover so chooses. The other amendments may be voted on, but only by discussion with the Chair. Effectively, we are talking to the first amendment, so Members should not expect the others necessarily to be voted upon, although all Members may speak to any of the grouped amendments. For those who arrived slightly later, I have said clearly that the clause has a stand part debate, which is a debate on the clause in principle, once it has been debated.

Some Chairmen take a view that that can only be done at the end. With a Bill such as this, I have always taken the view that it is helpful sometimes to have a broader debate, which is why the right hon. Lady has perfectly properly, and in order, covered slightly wider ground than the actual amendments. Any comments on the clause should relate to that clause. This is not a further Second Reading debate on the whole Bill. The formal procedure is that I shall call Back Benchers—or indeed Front Benchers—from all parts of the Committee. The Minister will hear what everybody has to say and will respond to the debate. Any Member may, by catching the Chair’s eye, speak more than once. It is not the same procedure as on the Floor of the House.

John Hemming (Liberal Democrat, Birmingham, Yardley)

I rise to oppose all the amendments to clause 1. The first problem is that we need to focus on protecting staff working in the civil service, many of whom do a good job. The best protection is the flexibility to minimise redundancies. The Opposition propose, in effect, to reimpose their previous scheme, most importantly without the incentive of voluntary redundancy.

Allowing the incentive for voluntary redundancy will make it possible to work with the agreement of the work force in reducing numbers and, thereby, minimise numbers of redundant people. The fact that those people who will go for voluntary redundancy might be those more likely to get another job—or be more confident of getting a job—is valuable. In imposing the previous settlement, the Opposition are effectively saying that negotiations have come to an end.

The hon. Member for Birmingham, Erdington made a good point on Tuesday about some exceptional cases where people have specifically gone through a process— effectively creating a contract with the Government—whereby they specifically and obviously agreed something. That should form part of negotiations. The Opposition are saying that negotiations come to an end at that point; we revert to imposing the agreement that was in place earlier this year, we do not encourage voluntary redundancies and flexibility and we do not try to minimise redundancies. I cannot agree with that.

John McDonnell (Labour, Hayes and Harlington)

In the general debate so far on the elements in the amendment, the most important concern for all members of the Committee was to create an environment in which negotiations could proceed constructively and come to a conclusion, whereby the legislation virtually becomes irrelevant. All the advice, from the unions and the CBI representatives, was that to succeed at negotiations in a difficult climate requires time. I think there was reticence to see the use of legislation, as it would impact on those negotiations. Some of us have put it more forcefully.

I do not support the details of the past scheme agreed between the then Government and five of the six unions, and which was then open to challenge. I do not support some of the detail, but I do support the principle, which was to achieve a negotiated settlement on a deal in which the majority of the trade union members it affected would not see a dramatic reduction of their accrued rights. That is where the deal fell apart last time; it was challenged. Whatever we think about individual trade unions, any union representative has to be able to sell the deal to their members. If a trade union cannot take its members with it, it cannot complete the deal.

John Hemming (Liberal Democrat, Birmingham, Yardley)

Perhaps the most poignant advice was from Dusty Amroliwala, who I presume will be affected by the civil service compensation scheme. When he gave evidence to the Committee, I asked him:

“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?”

His answer, remembering that he is an independent civil servant and affected by the scheme, was:

“That was certainly one feature of the advice, yes, without a doubt.”––[Official Report, Superannuation Public Bill Committee, 14 September 2010; c. 7, Q15.]

The advice from the civil service, which is affected by it, is that this particular mechanism is one to use to break the logjam.

John McDonnell (Labour, Hayes and Harlington)

With the greatest respect to Mr Amroliwala—I hope he is not affected by the scheme as a result of some of the things that we are about to say—he was one of the advisers who constructed the last scheme that failed in the courts. Part of his advice that was so robust to Ministers was suggesting that the scheme would succeed in the courts. Therefore, I take with an element of scepticism the effectiveness of his advice and its ability to survive in the real world and sustain a proper agreement. I take more realistically the advice given by people with experience of negotiation; that came from both the CBI representatives and trade union representatives. It was about giving time for negotiations to take place.

I am trying to work through how to arrive at a reasonable settlement. What settlement will hold, not with just five of the six unions, but all of them? Also, within a union, what will hold with their members? The valid point made by a number of the trade union representatives was to ask what deal will hold and be sustainable in the courts if a legal challenge was taken—not by a union, but by an individual union member. The union representatives themselves made it very clear that they would be vulnerable to legal challenge, as the Government were, if they did not abide by what is now a court judgment on accrued rights.

The amendment is important and supportable. Although we do not want to be in a situation where legislation has been brought forward almost as a cosh within the negotiations, and although the Opposition feel—we have made this clear, and much of advice has made this clear to the Committee—that introducing legislation at this time is unprecedented and not particularly constructive, the amendment would give the basis of a message to the current negotiations, saying that the clause could form the basis of a deal.

The Minister put the PCS representative on the spot by asking him whether PCS could recommend a package as the basis of a successful deal to their members. No trade union official would have the authority to give the Minister that assurance at a meeting like that. A lot would have to happen; it would have to go back, and the negotiator would have to consider it. It would have to be put to the executive, before a recommendation went to members. It would then be up to them to decide.

John Hemming (Liberal Democrat, Birmingham, Yardley)

Does the hon. Gentleman think it is a good approach to try to negotiate an industrial agreement in a Public Bill Committee?

John McDonnell (Labour, Hayes and Harlington)

I fully agree. That is why I never supported the legislation. I wanted to allow the negotiations to take place, have the normal mechanisms to report to Parliament that a deal had been signed, and then go forward. I do not want to go back to the principles of the Bill, but the context is such that legislation undermines the negotiations rather than assists them.

However, we are where we are. The legislation is before us, and through the amendment we are trying to create a climate of opinion in the negotiations that facilitates the making of a deal. As I said, I never supported the original proposals as set out here when they were agreed by the previous Government, and I do not think that they are the best. However, adopting the amendment would send a signal to the negotiators that there is a prospect of a deal, even if there are elements around the final deal that have to be ironed out by the PCS, and certain minor changes need to take place.

The role undertaken by the Committee would be constructive. Putting that message into negotiations would, in some ways, override some of the damage that has been done by the introduction of the legislation. I support the amendments on that basis.

From the Committee today, we could send a signal to the negotiators that we have some parameters of a deal that would protect most of their members from severe damage, under the Bill, to their accrued rights. That is the reason to support the amendments. At this delicate stage in the negotiations there is a responsibility on our shoulders to be realistic about what sort of deal could emerge. If the approach is bloody-minded and we say that the Bill will go through without amendments and that these are not the sort of parameters that a negotiated settlement could be formed around, we will provoke not just PCS members but members of other unions who settled for the deal previously. The last thing that we want in this period are forms of industrial conflict exacerbated by a parliamentary Committee.

Large numbers of people will inevitably lose their jobs as a result of the comprehensive spending review, and if they feel that they will not get a just settlement they will take whatever action is available to them, which will be either industrial action or legal action, as we have already been told. Neither route will create the sort of industrial relations climate that the country, let alone the Government, will need to get through this period.

I therefore urge Members to support the group of amendments because it sends the appropriate signal to negotiators, and the Bill currently does not. In that way, we could play a constructive role in the negotiations, even though I never wanted to be in this position in the first place.

Jack Dromey (Labour, Birmingham, Erdington)

The hon. Member for Birmingham, Yardley is right that, in the best traditions of Public Bill Committee hearings, evidence given is evidence that should be assessed in reaching a decision on the proposals in the Bill.

After the public hearings earlier this week, I was contacted by a long-serving civil servant who works in what is called the Joint Support Chain Services in Plymouth—it used to be the Defence Storage and Distribution Agency. He is employed in the explosives business trade. I know Plymouth well; I have been there 100 times. It is a city with great naval traditions. It is the city of Drake and of Devonport dockyard. It was bombed fiercely by Hitler’s bombers during the war, but gave outstanding service to the Crown then and has done ever since. Those who work in the Ministry of Defence regard themselves very much to be servants of the Crown and the armed forces.

That individual, who is employed in vital work in processing ammunition for the front line in Afghanistan, said:

“I am nearly 50 years of age. I have a wife and two dependants aged 12 and 15. Our family has never incurred any credit card debts. We pay our mortgage faithfully each month on time, never having missed a payment. We have no other outstanding debts; we are in many ways old-fashioned in that we purchase only that which we can afford. I do my job to the best of my ability, as do my work colleagues. I was due to receive £60,000”—

many of those employed in Plymouth now face redundancy—

“less tax, when I lose my job. I would have used this money to pay off the remainder of my mortgage. The rest would have cushioned my family until I found other work. But what work will there be in such a place as Plymouth, left abandoned by the Westminster-centric-driven politicians? Nowadays I feel ashamed to say that I’m a Civil Servant. I believe that people will think that I’m lazy, inept, incompetent, a waster, that this country is burdened by the likes of me and the sooner I’m rid of the better. I am not responsible for, nor have I contributed to the greed, that has so damaged our country. Yet it is the likes of me that will pay.”

In the debate on Tuesday, a Government Member referred to public perceptions. The problem is that public perceptions, many of which are myths, have been fed because of a lack of leadership by Government. It is important, therefore, that the evidence before Committee is properly assessed when we reach a decision. The notion that civil servants are well paid, with gold-plated pensions, and in secure jobs is simply not true.

Reference was made on Second Reading and in the debate on Tuesday to public sector comparisons. That is wrong, because the civil service is at the lower end of the public sector. A crude, public-private comparison is therefore not appropriate. There has also been a failure to understand the nature of employment in the civil service. For example, there are many more low-paid jobs in the private sector, and many of those at the bottom end of the civil service have already been contracted out.

Claire Perry (Conservative, Devizes)

I appreciate the various comparisons about pay, which I am sure we will debate at great length and for which there is information from both sides. I understand, however, that the Bill considers only one matter, which is the maximum redundancy pay for a civil servant.

Is there any evidence other than that which has been presented by the Government? That shows that cash payments within the narrower civil service are generally approximately three years’ pay and can be up to six years’ pay, whereas the statutory minimum for redundancy in the private sector is for 30 weeks’ and, typically, the best practice is for 12 months’. Ignoring the wider compensation structure issues, which both sides would like to discuss, does the hon. Gentleman agree that in the specific case of redundancy pay, which is what the Bill addresses, there is a relatively large discrepancy in favour of civil service sector workers?

Jack Dromey (Labour, Birmingham, Erdington)

The hon. Lady has drawn a misleading comparison, because it is not right to focus on but one part of the total package of terms and conditions of employment. That is why, on Second Reading, I quoted an excellent senior army officer, who spoke to me when I first dealt with the Ministry of Defence many years ago. He said that although staff were paid little, at least they could look forward to a decent pension and they would probably be supported if they were made redundant. We must therefore consider the matter in the round. If the hon. Lady wishes to draw comparisons, I, too, am happy to do so.

In the civil service employment structure there are many more graduate jobs—they comprise more than 20%, compared with 15% in the private sector. Graduates who are working in the private sector get 3.4% more than those who are employed in the civil service. We heard on Tuesday that workers in call centres in the private sector get 14.3% more than people who are working in the civil service.

In the debate earlier this week there was a suggestion that the civil service has been inured to these tough times, but nothing could be further from the truth. On pay, the comparisons are clear. In the year to March 2010, the Office for National Statistics Figures show a 3.6% increase in the private sector, but a 2.8% increase in the public sector. Predictably, there was a 5.2% increase in the finance sector. The Incomes Data Services estimates for the year ahead show that pay will rise in the private sector.

Roger Gale (Conservative, North Thanet)

Order. I am always reluctant to curtail remarks, particularly when I have, effectively, given hon. Members a free rein, but the debate concerns superannuation and redundancy; it is not about pay. The time has come for me to ask the hon. Gentleman to confine himself to discussing clause 1.

Jack Dromey (Labour, Birmingham, Erdington)

I have no problem with that, because I hope that in the debate thus far, we have cleared the undergrowth of myth that has been fed by the Government in their seeking to justify this shameful measure. It is simply not true that civil servants somehow enjoy a privileged existence that should be brought to an end during tough times.

I come straight to the amendment. I found the debate the other day interesting, because, after Second Reading, I sensed that there was genuine hope on both sides of the House that an agreement could be reached at the next stages that would prevent the dangerous precedent of unilaterally, by way of a statute of Parliament, altering the terms and conditions of employment to their detriment. I hope that the “blunt instrument”, in the unfortunate words of the Minister for the Cabinet Office and Paymaster General, will not be used against civil servants during the next stages.

If Government Members mean it, and if the Government mean it, we are on test. I ask the Minister to facilitate negotiations in the way that the amendment seeks to do, and then to put the unions on test in those negotiations. My judgment, as somebody who handled such issues for many years, is that if there is support on both sides of the House for a move of that kind at this stage—putting the offer that was made in February of this year back on the table—that would lead to a quick negotiation, perhaps a reconfiguration of the package, because the point has been fairly made about the interests of the lower-paid, and a settlement then being reached. I ask the Minister, “Why not?”

We need an act of good faith on behalf of the Government. A clear message has been sent that change is necessary and that the current arrangements need reform, which has been embraced on all sides. My judgment is that all six unions would respond to an initiative of that kind.

In conclusion, it is a serious matter. The lasting damage that will be done to the morale of the good men and women who serve the Crown, and who are proud of the job that they do, should not be underestimated for one moment. It will be a stain on Parliament if we do not take the initiative now. I stress again: if there is a genuine view on both sides that that package might form the basis of a settlement, let us allow that to happen.

Richard Graham (Conservative, Gloucester)

One of the things that I have found hardest during our debate in this Committee is the inconsistency in the position of Opposition Members. For example, the right hon. Member for Dulwich and West Norwood answered a question earlier by saying that it would not have been appropriate for the PCS to have revealed its negotiating position during a public Bill debate, but she put that very question to the representative of the PCS by asking whether that representative would be 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?”––[Official Report, Superannuation Public Bill Committee, 14 September 2010; c. 57, Q128.]

All parties have said that the current status quo is not sustainable. That does not mean, in answer to the emotional speech by the hon. Member for Birmingham, Erdington, that Members on the Government side of the House do not recognise the invaluable contribution made by civil servants across the land, in whichever Department they work. We all do, and that has been stressed by both Ministers and Back Benchers. But given that we all accept that the status quo is not sustainable, and given that Labour Members in the previous Government were unfortunately unable to arrive at a negotiated solution with the unions, it seems curious that, as the hon. Member for Birmingham, Yardley pointed out, the shadow Minister wants to rule out negotiations by trying to achieve the same result with an amendment to the Bill, which would produce exactly the same position as the previous attempt at a Bill, which failed with the result of a judicial review. The advice given to the Government is that it would be much harder for a judicial review to be had if primary legislation was enacted.

Tessa Jowell (Labour, Dulwich and West Norwood)

The hon. Gentleman is developing his remarks, and I will deal precisely with his point. As I said on Second Reading and in the oral evidence session in the Public Bill Committee, the six trade unions have accepted the principles of the February settlement. [ Interruption. ] I am very reliably informed that they have accepted the principles as a basis for further negotiation. However, it is perfectly reasonable for a single official, without having the authority of his executive committee, to be unable to give the precise assurance that the Minister—rather generously—sought in his question. We want the February package put back on the table as a basis for negotiation, and with all due respect, we can be optimistic about the will of the six unions to reach a negotiated settlement.

Richard Graham (Conservative, Gloucester)

I simply do not share the right hon. Lady’s confidence in the ability of the PCS to achieve a sensible negotiated settlement without the blunt instrument of the Bill, for two reasons. First, she mentioned that the PCS negotiators had effectively accepted the principles of the deal that she and her colleagues put to them earlier this year. Two days ago, I put precisely that point to the PCS and I was told:

“That would have been untrue. We did not accept the original deal.”

I again asked the witness whether he was denying that his

“own negotiators came away from the meeting with a positive recommendation.”––[Official Report, Superannuation Public Bill Committee, 14 September 2010; c. 60, Q135-136.]

He answered, “Yes”. On that basis, and given what the right hon. Lady has said and what other hon. Members believe, I am not convinced about that good will.

John Hemming (Liberal Democrat, Birmingham, Yardley)

Will the hon. Gentleman give way?

Richard Graham (Conservative, Gloucester)

May I finish this point? In his evidence to the Public Administration Committee, the deputy general secretary of the PCS spelt out 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”.

However, in his evidence, Geoff Lewtas from the same trade union said that, in that agreement,

“it was really only some of the lower-paid whom we felt were adequately protected”.––[Official Report, Superannuation Public Bill Committee, 14 September 2010; c. 58, Q128.]

Those two statements are completely incompatible. The deputy general secretary says that the sticking point was that the lower-paid were not adequately protected, but his colleague says that only some of the lower-paid were adequately protected. It is not possible for any Labour Member to believe that both those statements can be true.

Given that the right hon. Member for Dulwich and West Norwood and the Minister gave the PCS representative two opportunities to state that the union would effectively accept the negotiated deal that it had turned down in February, and given that the judicial review still applies, it will not be possible without the Bill to solve the problem that all parties agree needs to be resolved. It is a blunt instrument—that is absolutely correct—that is on the table to oblige that trade union to see its way forward to a rational result for the benefit of its members, especially the lower-paid, which we all want to see. I will, therefore, not be voting for the amendment.

I will happily give way to the hon. Member for Birmingham, Yardley.

John Hemming (Liberal Democrat, Birmingham, Yardley)

I will speak later.

Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)

I have two or three points to make. First, we have often heard complaints from the other side of the debate about the unions’ failure to say definitively whether they would accept the February 2010 agreement, but we have heard nothing—it is fair to make this comparison—from the Government on what they are prepared to accept. It is unfair to expect the unions, outside of a negotiation, to say what they would accept when we do not ask the same question of the Government. The Government want to use the Bill, which is a blunt instrument, to force the unions to the negotiating table, but why is such emphasis placed on demanding that the unions explain what they will accept, when we do not ask the same of the Government? There is a case for considering that slightly unfair.

Secondly, the hon. Member for Gloucester, who was speaking for his side of the debate, said that he wanted to put it on record that civil servants make an invaluable contribution. The problem with his position is that this blunt instrument, as it stands, seems to put a value on their contribution, and that value is an extreme deterioration in their terms and conditions. I gently say to the hon. Gentleman that the tax workers in Cumbernauld in my constituency do see the Bill as an attack on them, and homilies on their invaluable contribution are not likely to get very far with those employees.

Finally, returning to the numbers involved, the matters under discussion are really important for lower-paid civil servants. According to the Bill, as I understand it, a civil servant earning £22,000—the median earnings in the civil service—who is made compulsorily redundant will receive £22,000. Under the February 2010 agreement, that civil servant would have received £60,000, which is a profound difference and is a huge amount of money to such workers. I do not know how long it has been since most Committee members have earned such a sum, but £22,000 is not a lot of money.

Claire Perry (Conservative, Devizes)

Several of us have earned less than that in the past five years.

Roger Gale (Conservative, North Thanet)

Order. The hon. Lady may not intervene from a sedentary position. If she wishes to intervene, she must ask to make an intervention and, if permitted, rise to her feet.

Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)

I am happy to give way to the hon. Lady, if she wants to express her enthusiasm.

Claire Perry (Conservative, Devizes)

I am grateful to the hon. Gentleman for giving way, and I apologise for my sedentary intervention.

I want to provide a real-world context for this discussion. I submit that many workers in the private sector earning approximately £22,000, or less, would be delighted with a payout of £66,000 and consider it to be extraordinary largesse. I reiterate that this compensation package ought to be placed on a fair footing, which, during the previous Administration, the right hon. Member for Dulwich and West Norwood repeatedly and determinedly attempted.

It is interesting to hear the stories of how much money individuals will lose, but the fact remains that there is an enormous discrepancy between this specific element of the compensation scheme and the prevailing norms for millions of private sector workers.

Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)

On a point of fact, the sum would have been £60,000, not £66,000. I understand that the compensation was £60,000 or three years’ pay, whichever was the lower.

I am delighted—this will be final point—that the hon. Lady has raised a comparison with the private sector, because she is absolutely right. In the occupational classification produced by the ONS, the bottom three categories make up 30% of the private sector. Those categories make up only 10% of the public sector, which is why, as my hon. Friend the Member for Birmingham, Erdington pointed out, we are comparing apples with pears.

John Hemming (Liberal Democrat, Birmingham, Yardley)

The example that Karen Bell of Prospect cited would receive £51,000 under the current scheme, £42,500 under voluntary redundancy if the Bill went through, and £11,000 under statutory redundancy. The figure of £42,500 is much closer to the current scheme than statutory redundancy, which many people in the country face—not that I am arguing that we should level down in any way.

I disagree with my hon. Friend the Minister on one point, in that I do not see the proposals in the Bill as being on the table. I understand that negotiations are ongoing, and that in the Committee we should not aim to put anything on the table, and we should not pressurise the trade unions to say what their views on negotiations are. Dusty Amroliwala, who will hopefully not be affected by the scheme but who is almost certainly covered by it, has said that he would advise any Government to use a legislative approach to remove the trade unions’ veto on an agreement, which is what the proposals achieve. They achieve it in a way that is not massively aggressive, as I have just cited in an example.

I do not, however, see this as being on the table; obviously, the Minister can confirm whether that is the case. My understanding is that negotiations are continuing—as they should—with the objective of getting a flexible deal that would, hopefully, protect people from redundancy with flexible approaches, such as moving towards part-time working.

Richard Graham (Conservative, Gloucester)

I am grateful to the hon. Gentleman for giving way, especially as I forgot to give way to him earlier. I absolutely agree with what he is saying. We are not trying to put something on the table; we are trying to have something on the table that would allow the changes to the current status quo to happen if negotiations, unfortunately, were to fail. I am absolutely convinced of the Government’s good will in those negotiations and that we all share the hon. Gentleman’s view on achieving a much better result than the Bill provides for, especially for the lower-paid. But the Bill needs to be there to ensure that the status quo is changed, given the lack of results so far.

John Hemming (Liberal Democrat, Birmingham, Yardley)

There is a further point. I still do not see it as being close to being on the table, but one issue has been raised with me. If anyone were made redundant under the scheme and then the scheme were to be improved through negotiation and a settlement, there would be a question about what happens to those who were made redundant under this scheme. We should be concerned about such people. My personal priority is still to minimise redundancies. If we end up losing better people who can get jobs in the private sector, but people remain employed in the public sector, there will be less unemployment, and I think less unemployment is a good thing to aim for.

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

It is a great pleasure to serve under your chairmanship, Mr Gale. This morning is a first for both of us, in a couple of respects. I have noticed with great interest the generosity that you have shown in the Committee to new Members of the House and I am hopeful, up to a point, that that may be extended to new Ministers as well. We will see—I do not want to test that too far.

The hon. Member for Hayes and Harlington, with characteristic candour, said he wished we were not in the place that we are today. That is also the Government’s view—he may not believe that, but it is the truth. We are discussing amendments to clause 1, which introduces austere caps on the level of payment possible to staff departing on voluntary terms, who will receive payments calculated under the current terms, but limited to a maximum of 15 months’ pay. For those leaving on being formally dismissed, the limit will be 12 months’ pay.

It is important to set the clause, and the Bill, briefly in context. The first point of context is the urgent need to reduce public expenditure, and I am not going to indulge in any partisan knockabout as to why we are in that place. That would not be appropriate given the substance of what we are now addressing. As the hon. Gentleman said, the human consequence is that we are on the brink of an inevitable significant reduction in head count within the civil service. That is an extremely difficult and delicate process, which needs to be managed properly, fairly and, we submit, within a framework of certainty to both those given the difficult job of managing that process and those who have to live with some of the consequences of those decisions.

The second point of context is that there is a clear need to reform the civil service compensation scheme. One of the striking points of the debate has been the cross-party and cross-Committee consensus on the need for reform of a scheme that is unaffordable, inappropriate and—to our way of thinking—out of kilter with the experience of so many of our constituents.

The right hon. Member for Dulwich and West Norwood was right to open her remarks by setting an emotional framework for the Bill of tremendous anxiety and insecurity. We believe it is time to deliver some certainty, because uncertainty is one of the great fuellers of insecurity. There has been uncertainty around this agenda of reform for two, arguably three, years and it is time to bring that to a close.

In making the case for the amendments, I thought the right hon. Member for Dulwich and West Norwood was suggesting that—based on our frank language in calling the Bill a blunt instrument—our motive is to end this process with the Bill. That could not be further from the truth, however, and that phrase should not be taken at face value. The Minister for the Cabinet Office and Paymaster General, my right hon. Friend the Member for Horsham (Mr Maude), used an emotive phrase—that the Bill is a blunt instrument—quite deliberately, because it is a blunt instrument. It is designed to do something simple, straightforward but controversial, which is to change the pace and dynamic of the negotiations, which have dragged on.

The Committee knows that we are here because of the trigger of a court judgment which crystallised the problem underlying this negotiation, which is that the process of negotiation can be held to ransom by one union. The Bill, as we have clearly stated, is not where we expect to end up. It represents a de minimis position, from which we expect to move forward and which we are now negotiating in very good faith.

Jack Dromey (Labour, Birmingham, Erdington)

Reference was made by Government Ministers and Back Benchers side earlier this week to a genuine desire to reach agreement. Reference was also made to the retabling of the February 2010 package. As a genuine move towards reaching agreement, would the Government be prepared to table that offer, on the basis that they expect a settlement to be quickly reached?

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

If I may, I will address the amendments specifically, because they are seeking to do what the hon. Gentleman is discussing, which is, to use the language of the hon. Member for Hayes and Harlington, to send a signal to the negotiation process. Our view is that that is not the appropriate way forward. We have been clear about this—we are conducting a twin-track approach. The Bill sets out a de minimis position and, in parallel, there is a serious negotiating process under way. Those conducting the negotiations on behalf of the union are aware of the Government’s position and where the Government are flexible in relation to the Bill. Those negotiators need no signal from the House in that respect; they are receiving those signals on an almost daily basis in the meetings that are taking place.

John Hemming (Liberal Democrat, Birmingham, Yardley)

I ask what is perhaps a slightly difficult question. It is possible that the Bill will come into force and people will be made redundant before there is an agreement. In those circumstances, would the Government consider, as part of that agreement, a scheme whereby anyone who was made redundant under the terms of the Bill gets the terms that may be agreed later? That is a difficult question to answer without notice, but there are people who are concerned that they may be made redundant under the Bill, while a better settlement is reached later which they would miss out on. Would the Government consider a measure to assist those people?

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

That is a reasonable question, but I will not be drawn into a detailed answer, because that might be part of the negotiation process. When that point has been raised before—not least by the hon. Member for Hayes and Harlington—it was pointed out that if the Bill is designed to be a catalyst for a faster, more serious process of negotiation the onus is on concluding that negotiation as quickly as possible, not least to mitigate the risk that the hon. Member for Birmingham, Yardley has mentioned.

The amendments have been tabled with the most honourable of motives, by someone who has probably more knowledge of the complexity underlying the tortuous process than any other member of the Committee and to whom my right hon. Friend the Minister for the Cabinet Office and Paymaster General has paid warm tribute in the House for her work over a long period of time in trying to reach an agreement. Effectively, her amendments encourage us to go back to February 2010. My right hon. Friend has already expressed the problem with that approach in evidence to the Public Administration Committee.

We have a number of objections, but the most important one is that no deal was done on that basis, and no evidence suggests that a deal can be done on that basis. We have discussed the response of the representative from PCS to my direct question on 14 September. No deal was done on that basis, however, and therefore no hard reason exists why we should continue to proceed on the basis of that package.

As my right hon. Friend has said, that was then; the new coalition Government have stated their aim of bringing the scheme more into line with schemes in the private sector. We have been honest in saying that the February package does not meet that objective, so it fails the affordability test.

Moving in the direction that the right hon. Member for Dulwich and West Norwood suggests would remove incentives for the trade unions to negotiate. We have a problem with the way in which it removes incentives for voluntary departures or for people to step forward and look at the voluntary compensation packages. We have discussed that, and a difference of view exists on its merits. We would like managers to have more options that people can choose from, and we would like managers to have more flexibility and the ability to tailor packages for individuals in such difficult situations. For those reasons, we will not support the amendments.

John McDonnell (Labour, Hayes and Harlington)

We are dealing with two issues here. First, we must consider the signals that the Bill and the amendment send to negotiators. The Opposition argue that the signal that would be sent by the amendment would create a climate that is more conducive to a settlement, because PCS—whatever has been said previously—has said that the principles in the amendment are the basis for a negotiated settlement.

Secondly, we must avoid tipping the balance that would provoke a union, but more likely an individual, to take the Government to court over accrued rights. Any individual who feels that they are losing so much of their accrued rights has more incentive to resort to court action. I remind the Committee of the comments of the hon. Member for Harwich and North Essex (Mr Jenkin), who chairs the Public Administration Committee, on Second Reading. He cautioned that a successful legal challenge would cause the Government considerable difficulty because they would be required to compensate large numbers of people who had been made redundant under terms that were found to be illegal, which would involve considerable cost. We need that balance in the settlement not only regarding what union members will accept but what will least provoke a legal action, as a result of which the Government would incur significant costs over the long term.

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

I understand the point that the hon. Gentleman has made, and I know that the amendment has been tabled with sincerity. There is a balance to be struck here, but the Government have opted for a bold approach to try and break a deadlock and reach a position of certainty. This relies on a twin-track approach, which is why we do not wish to be drawn into amending the Bill. The point of the Bill is to be a catalyst or a blunt instrument to set out the Government’s minimum position. We do not expect the process to end in this place. There is a serious, almost daily process of negotiation in which, and the representative of the PCS was keen to put this on record, the PCS is actively involved. Those who are negotiating do not need a different signal from this Bill. They know the Government’s position, because they are negotiating it daily.

In a response to a query from the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East, my right hon. Friend the Minister for the Cabinet Office set matters out with some caution and showed where there is some flexibility around the terms for voluntary compensation. The key issue, which is at the core of these amendments and at the core of all the concerns expressed by the House on Second Reading, is the treatment of the lower-paid.

Jack Dromey (Labour, Birmingham, Erdington)

The Minister made reference to asking a direct question, and both he and other Government Members were entitled to ask a direct question of the unions on Tuesday. May I then ask him a direct question? When several of his hon. Friends suggested that if the package on offer this February were put back on the table it might form the basis of a settlement, did they mean it?

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

I think all I am going to say in response is what I wanted to say in response to what I believe is the core concern underlying the amendments, which is the treatment of those people at the bottom of the pay scale, of whom there are large numbers. The answer is the same. However uncomfortable hon. Members are with the process—I understand their frustration—there is a twin track. There is the blunt instrument of a Bill which sets out a minimum position and there is a separate negotiating process which I understand—I should stress to the Committee that I am not involved directly—is progressing in a serious and productive way. As was made very clear by the Minister for the Cabinet Office, the principle is that those negotiations will be conducted in private and there is no greater supporter of that principle than the unions negotiating on behalf of their members. It is not appropriate for me to be drawn on the details of those negotiations or on what the Government are prepared to accept.

The right hon. Member for Dulwich and West Norwood has served the Committee well in throwing yet another spotlight on the core issue, which is that whatever negotiated settlement emerges from this, it has to be judged on the basis of how it treats those at the bottom of the pay scale. All I will say to the right hon. Lady— and it is all I can say and I know it will be frustrating—is that for the Government, that is the test. The people who are absolutely at the top of the tree in terms in our considerations are the lower-paid, and we are happy to be judged on the basis of how they emerge from the negotiated settlement. I must conclude by saying that we cannot support the amendment.

Tessa Jowell (Labour, Dulwich and West Norwood)

The debate on the Bill’s central clause has been a bit of a dance around several different. My hon. Friend the Member for Hayes and Harlington put it well when he said that a clear message must be sent to the negotiators. I welcome the progress that I sense the Committee has made on better understanding the respective positions.

I listened carefully when the Minister made it clear that the provisions that we oppose represent, from the Government’s point of view, the de minimis position. Again, I hope that he will reconsider that position, particularly in the light of Mr Boreham’s evidence. In question 51, Mr Boreham said:

“The one-year cap would be at the aggressive end of current practice”.––[Official Report, Superannuation Public Bill Committee, 14 September 2010; c. 19, Q51.]

Obviously, he was reflecting the changing nature of the labour market in light of the economic situation, but he also said:

“It would be pretty typical in the private sector to have a cap. Historically, it might have been as high as two years”.––[Official Report, Superannuation Public Bill Committee, 14 September 2010; c. 20, Q54.]

The Government should therefore not be afraid that our proposals are out of step with what is happening in other parts of the sector.

The Minister referred to the proposed measures as “blunt” and “bold”. Labour Members consider them to be brutal, for reasons that I hope have been clearly stated by my hon. Friends. We are grateful for the extent to which he has heard them. We recognise that the situation is highly dynamic; we also recognise that we are in the unusual position of not returning for Report and Third Reading for three weeks, during which time it is highly likely that progress will be made. We argue that the provisions in the February package should be put back on the table as the framework for negotiation, given the protection that they include for the lowest-paid, their capacity to contribute substantially to deficit reduction and the extent to which they address the problem of age discrimination, which the Bill will arguably—it is open to question—exacerbate.

That is our proposition. We have sought to capture its elements in our amendments to the Bill. We have had a full discussion reflecting the complexity of the issue, but at the centre is respect for the decency and integrity of our civil service and the decency and sensitivity that must attach to the realistic and reasonable expectations built up by civil servants in various sectors, in many cases over years of dedicated and professional service. With your leave, Mr Gale, and that of the Committee, and on the basis that we can return to the issue on Report, when I hope that we will begin to see the constructive fruits of our advocacy of the February package, I beg to ask leave to withdraw the amendments.

Clause 2

Paul Goggins (Labour, Wythenshawe and Sale East)

I beg to move amendment 4, in clause 2, page 3, line 14, at end insert—

I warmly welcome you to the Chair, Mr Gale. I have served under your chairmanship on a number of occasions and you are always a very fair and helpful Chairman, so I look forward to this afternoon’s sitting. It may interest the Committee to know that, during the recess, an A380—one of the new so-called super-jumbos—landed at Manchester airport, in my constituency, for the first time, and the pilot of that aircraft could not have had more skill than my right hon. Friend the Member for Dulwich and West Norwood showed when she beautifully landed the debate on clause 1 within 30 seconds of the end of this morning’s deliberations. I shall also try to be—

Roger Gale (Conservative, North Thanet)

Order. I am bitterly disappointed. I thought that the right hon. Gentleman was going to say that it is now possible to fly by Flybe from Thanet to Manchester.

Paul Goggins (Labour, Wythenshawe and Sale East)

We are working on that, Mr Gale. Clause 2 also raises a number of very significant issues, both in relation to the civil service compensation scheme and more generally for Parliament and for legislation. As per your guidance earlier, I shall make some general remarks about the clause as well as focusing more specifically on amendment 4 a little later.

Clause 1, which we debated this morning, clearly deals with the substance of what may be on offer to the trade unions—to the work force. My right hon. Friend described the terms of the Bill as brutal and the Minister described them as austere, so none of us is in any doubt about the difficulties that staff will face if the terms of the Bill are in the end what is delivered. I am the first to acknowledge that Ministers—both the hon. Gentleman and the Secretary of State—have been very clear with the House and the Committee that they hope that this is not the final position and that, in a sense, this is a blunt instrument, to quote that expression again; it is a negotiating device.

However, clause 2 gives the Minister an incredible set of accelerator and brake pedals to use in relation to the legislation. Those measures are of concern here and perhaps more broadly. Subsection (3) enables the whole Bill to fall after 12 months, but in subsection (4) we see a variety of devices to bring forward the date of the end of the Bill, to extend it beyond the 12-month period and, intriguingly, to reawaken the Bill at some future point should Ministers judge that necessary. I shall deal with that in more detail later.

Whether this set of powers is an appropriate use of legislation is highly questionable. The message from the Committee is very clear and, I hope, increasingly shared on both sides of the Committee that the way to resolve the problem is not this miserable Bill, but sensible negotiation with the trade unions. That is entirely the right thing to do in a society such as ours. In a democracy, that is the way things should work. Indeed, I think that the general consensus now, from the evidence session the other day and the various remarks made by Committee members today, is that all six of the trade unions would now regard the principles of the February 2010 offer as a positive starting point for further negotiations.

I pay tribute to my right hon. Friend, as the Minister did earlier, for her efforts over a long period of negotiation, leading to the February 2010 offer. Clearly, in the end that was not a complete success, but a huge amount of groundwork was done, which the Minister and his officials could build on and capitalise on if they approached negotiations now in the generous spirit in which I suspect the Minister personally would like to pursue them.

The right thing to do is to enter the negotiations, rather than leaving the powers in clause 2 as the backstop measure by which to impose the miserable conditions set out in clause 1. That is what every member of the Committee has expressed as a wish, as a desire. We have put it in different ways, but in the end we all want a negotiated settlement. Relying on the powers in clause 2 gives the wrong message.

It is important to negotiate rather than rely on such powers. We are constantly coming up against a difficulty, which we saw both on Second Reading and today. Negotiations are going on in parallel with the passage of the Bill. Inevitably, on Tuesday trade union officials were unable to comment further on particular questions. Indeed this morning the Minister was unable to comment further on certain detailed information. We understand that because we know that the negotiations must, to some extent, remain confidential. None the less, it is a very unpleasant experience for this Committee and for Parliament to be providing such wide powers to Ministers, trusting that somehow a negotiated settlement will emerge. There must be much stronger emphasis from this Committee that we expect a settlement to emerge.

In urging the Minister to push for negotiation rather than the powers in clause 2, I should like to make the point that, if this turns out to be the final word, dreadful conditions will be imposed on those who are made redundant, but what will be the impact on those who remain? I am talking about the work force who feel that they have not been treated seriously and not been given proper respect. Yet this is also a work force who are crucial both to Government and to the delivery of public services.

For all those reasons, I urge the Minister to get into the negotiations and not to rely on the powers in the clause. Many of us feel uncomfortable about this Bill and the way in which it has been pitched. From everything that the Minister has said, it is clear that he genuinely wants to find a solution. I noted on Second Reading that he felt quite affronted when some Members of the House treated his remarks about wanting to protect the low-paid rather discourteously. He was affronted, I think, at the thought that he would not want to protect those who are the lowest-paid. Nonetheless, as we discussed this morning in respect of clause 1, there is no specific additional provision for the low-paid. What we as a Committee should try to do is strengthen the Minister’s hand by ensuring that sensible negotiations are in place.

In amendment 4, my right hon. Friend the Member for Dulwich and West and I propose a mechanism that will help to bring greater transparency to the negotiation process and, I hope, strengthen the Minister’s hand at crucial points in the discussions that he may need to have with some of his right hon. and hon. Friends. As we know from our time in government, such discussions can sometimes be quite lively.

Amendment 4 proposes that the Minister brings back to the House a report that sets out clearly what negotiations have been carried out and how the terms of those negotiations have progressed. Parliament will then consider and make some judgment about whether those negotiations were conducted seriously. If it decides that the negotiations have not worked, it will consider where the blame lies. If the Minister and his colleagues in government know that a report has to be produced, that will ensure that the negotiations are more transparent and that there is a greater accountability to Parliament. Under the terms of our amendment, there then has to be an affirmative resolution, which means that there is another procedure to be gone through, thus giving this Committee or another Committee of the House the opportunity to consider the quality of the negotiations.

There has to be a proper process of consultation. The negotiations did not get off to a good start; in fact they got off to a miserable start. Although this Bill has been described as a Bill to break through the deadlock, there were no prior discussions about its terms with any of the trade unions. It was merely published, introduced in Parliament and then the discussions started. It would have been rather better if there had been some constructive discussion before the Bill was published.

Now we are being told that the negotiations are fully under way and moving forward, and we certainly hope that they are. I have to say that I was greatly encouraged by the tone and content of the Minister’s questions at the evidence session on Tuesday, especially in relation to the questioning in the latter part of our proceedings about whether all the trade unions would be content to use February 2010 as a starting point.

In conclusion, there is a mixture of factors. It would be wrong to use the devices in clause 2 to enforce the miserable conditions in clause 1. However, I believe that the Minister wants to do his best to protect the lowest-paid and wants the negotiations to work well. Given the poor way in which the negotiations started, we are left with the dilemma of whether we can simply leave the situation as it is. My right hon. and hon. Friends and I want the Minister to reassure us in relation to the negotiations. Why does he believe that it is not necessary to be accountable to Parliament through a further report and the affirmative resolution procedure?

John Hemming (Liberal Democrat, Birmingham, Yardley)

It would be nice to have some consistency from the Opposition. When they were in government earlier this year, so great was their urgency for a new agreement that they put through a statutory instrument to change the civil service compensation scheme without the agreement of all the trade unions. Now they are proposing a further delay with the amendment. There must be some consistency. Because of the country’s financial situation, things need to move on and cannot be allowed to drift for ever.

John McDonnell (Labour, Hayes and Harlington)

I offer my understanding of the amendment and some words of advice. The previous Government stated their negotiating position at the start of the negotiations and then negotiated for eight months. They thought that they had reached a deal and I believe that they were close to doing so. With a little honing of the offer, there may well have been a settlement that all the unions would have signed up to. The time scale of the general election intervened—I do not expect a Front-Bench response to this point—and put pressure on the previous Government to seal the deal. Given a few more weeks, I think that there would have been a settlement on a similar basis to that proposed by the previous Government.

From what I understand of the current Government’s proposals, they have an old-fashioned negotiating strategy, whereby they take an extremely hard line, expect resistance and want to meet somewhere in the middle. The irony is that somewhere in the middle is the previous Government’s settlement. With a little flexibility, there can be a negotiated settlement.

The amendment is important because the Government and Parliament need a longstop in the negotiations. There may come a time when the Government want to come to Parliament with a report that states what was said and what was put down so that the whole of the Commons can understand the rationale for their final position. That is what the amendment asks for. That would be good governance and good parliamentary governance because we would all understand, and therefore be implicated in, the final decision. That would push us back from the current brink.

The problem with all such negotiations is that, when one side wins, if all sides do not understand that they have got the best deal that they could possibly get, there will be collateral damage. A settlement that is begrudged on one side will not stick for long. For the period that it does stick, it undermines the morale of the staff concerned. The problem then comes back in another form.

Another form of industrial relations is the spitting in the soup negotiations. Although the employers might well win, the staff who serve the managers’ soup will spit in it beforehand. We do not want to generate that sort of attitude in the civil service as a result of an imposed or begrudged settlement. The amendment is perfectly reasonable. It enables the Government to come back with a report to explain their final position before implementation. It enables Parliament to take a view, to have a serious discussion if necessary about whether the settlement is accepted or imposed and to realise, if imposed, that we are going over the brink.

If the settlement is imposed, there will be consequences for industrial relations, not just in the civil service, where I think there will be industrial action, but across the public sector and elsewhere. The lesson of history is that one spark, from one industrial dispute, can set off a whole, bitter range of destruction in an industrial relations climate, which damages the country as a whole.

The amendment enables the Government to come back and say, “This was our aim in the negotiations. This was our position. This was their position. This is what we are recommending”, enabling the House of Commons to take that final decision ourselves—whether to accept the settlement or to go over the brink into what could be a dangerous situation.

Richard Graham (Conservative, Gloucester)

The Minister for the Cabinet Office remarked in the House of Commons at the beginning of the Superannuation Bill debate that had agreement been reached earlier in the year, the case for accepting it would have been pressing for everyone. Does the hon. Gentleman not agree that in this instance, for a particular trade union to have chosen to disrupt the course of the negotiations was a tragedy? Had agreement been reached, we might not be here today.

John McDonnell (Labour, Hayes and Harlington)

I am an old Hackney class warrior, but I am trying my best not to fall into the sort of language used by the hon. Gentleman. It is not constructive in our discussions to argue whether one union has disrupted negotiations or whatever. The Public and Commercial Services Union took a position based on the interests of its members—it could do nothing else. It is now trying to ensure that there are proper negotiations in a fruitful atmosphere. Are we not doing the same? Going over the past and isolating one union from the others is not constructive, and is almost trivial when considering what we face. I am giving some importance to the negotiation in its own right—of course—but also to its consequences for the industrial relations climate of this country.

Richard Graham (Conservative, Gloucester)

The point I was gently making is that it is surely in all our interests, including that of every member of all the trade unions involved, to achieve a long-term settlement, which is sustainable for the unions, for the Government and for the economy of the country. Therefore, in the clash between short and long term, surely it is in everyone’s interest to focus on the long term.

John McDonnell (Labour, Hayes and Harlington)

Of course. The hon. Gentleman is completely right. I am desperately trying to see the issues from all sides at the moment. I can understand the Government’s position even though I do not agree with it. I do not agree with their whole economic scenario—we had that debate in the Chamber, when I set out my Marxist analysis of the argument, but never mind. I do not agree with the Government’s position but I understand where they are coming from.

We use the expression, “We are where we are”, and where we are at the moment is understanding what will let us arrive at a reasonable settlement or solution. That means looking at individual union perspectives. In the last negotiations, the PCS clearly felt that it could not carry its members with it on the settlement, because so many of them were losing out. We had the potential for a little honing of the agreement in order to reach a solution. That is where we are at the moment in the negotiations.

The amendment, therefore, would given openness to the debates, because the Minister could say, “At the end of these negotiations, I will report them to Parliament and Parliament will decide.” Doing that strengthens the Government’s hand, enabling them to set out the reasonableness of their argument and to expose the other side, if it has been unreasonable, or vice versa.

The amendment would give us that one, final moment. I do not want to exaggerate, but it could be a moment in history for the Government—either to agree or to go over the brink. The amendment enables the Government to step back from the brink; it enables the whole House to step back from the brink, if the settlement is that problematic, or, if necessary, to unite on an agreed solution that may eventually have to be imposed.

That is democracy. I do not understand why there is any opposition to the amendment, as I think it gives a way of involving all of us in the process, which will be good—from my position—for the country overall, but from the Government’s position, certainly good for their standing.

Finally, I think affirmative processes are quite proper for issues such as this. It is important to involve the whole House in significant decisions in the history of this country and the decision-making process of any Government. That is a basic democratic right for individual Back-Bench Members such as me, who otherwise would not have a final say, in the light of the state of the negotiations as reported.

Harriett Baldwin (Conservative, West Worcestershire)

There seems to be a real problem about the amendment, although I would be happy to take interventions if I am incorrect. If the amendment were agreed to, it seems to me that two things on which we have all agreed throughout the whole debate—that we should have a negotiated settlement, and that the current arrangements need to be changed—would run the risk of not taking place.

I understand that until clause 1 comes into force, the current arrangements would continue. We have heard many people on both sides make the case that there needs to be a change in the current arrangements. For that reason, I think the amendment has significant problems, and I will not be able to support it.

Paul Goggins (Labour, Wythenshawe and Sale East)

Does the hon. Lady acknowledge that regardless of whether Parliament should be caught up in the discussion about the negotiations, we are now caught up in it? Therefore, it is quite legitimate, in terms of the amendment, for Parliament to say that we have heard about the negotiations, which the Minister tells us he hopes will go well and will protect the low-paid, but that Parliament now has an interest in the matter and we expect a proper and formal report on those negotiations before we take the final, dreadful step of imposing the conditions in clause 1. Does she not think that Parliament has the right to exert that influence?

Harriett Baldwin (Conservative, West Worcestershire)

During our proceedings, we have been asking a lot of questions about the current state of the negotiations. Both sides have told us consistently that as they are in negotiations, they are not able to give us much detail. The amendment would create an incentive for the unions to carry on negotiating for a long period, because the current rules would remain in place until clause 1 came into force. Given that both sides in the discussion have agreed that the current arrangements need to be altered, implementing the amendment would cause a problem.

Jack Dromey (Labour, Birmingham, Erdington)

On Tuesday, the hon. Lady asked this question:

“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?”––[Official Report, Superannuation Public Bill Committee, 14 September 2010; c. 56, Q124.]

Am I right that the clear suggestion inherent in the question is that the hon. Lady believes that the February 2010 deal should be put back on the table?

Harriett Baldwin (Conservative, West Worcestershire)

I asked the question to see what the answer would be, rather than to my personal opinion as a humble Back Bencher about how the negotiations should take place.

Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)

I have been listening closely to what has been said so far, and I want to focus on what I think underpins our amendment and where we see the process going.

I want to talk about productivity. It was mentioned this morning that the most important thing is to prevent job losses, which I think is absolutely right. However, we have to consider the productivity of the workers involved. We have already had, in the past 10 days, the difficulties at Her Majesty’s Revenue and Customs, which led to a statement to the House. Only yesterday, the Governor of the Bank of England suggested that the case for cracking down on tax avoidance is irresistible. Underpinning what Labour Members have said in the Committee is the sense that, without a negotiation at this stage, the morale of the work force will be so depressed that they are unlikely to respond positively to innovations that the Government will rightly want to introduce in how they work. We have to think closely about that. The Government will be sending a message about how they wish to conduct their industrial relations, which is important for a new Government.

John Hemming (Liberal Democrat, Birmingham, Yardley)

Does the hon. Gentleman agree that organisations that face making redundancies tend to have morale problems? The sooner such issues are resolved, the sooner morale can rise again.

Gregg McClymont (Labour, Cumbernauld, Kilsyth and Kirkintilloch East)

There is something to the hon. Gentleman’s point, but in this case the Government are not necessarily the same kind of employer as a private sector employer. On Tuesday, one of our human resources witnesses mentioned the importance of brand. Alongside other reasons why people decide to work for the civil service is the notion that the Government will treat them fairly, perhaps more fairly than if they were in the private sector. From that point of view, the message the Government send out early in their term is important for the entire public sector. I know from his comments that the Minister is concerned about that message, so it is worth our ruminating on morale.

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

I am grateful to the right hon. Member for Wythenshawe and Sale East for making it clear, in moving his amendment, that the way forward is by sensible negotiation. I am grateful to him for that, given the noise around this emotive Bill. The amendment would change clause 2, which is an emotive clause. It provides for the Bill to be time-limited. I stress and place on the record that the Government have no desire to see the legislation continue any longer than is absolutely necessary.

The Minister for the Cabinet Office has stated on the record, and I join him in stating, that he would be pleased if the Bill never reached the statute book because it was not required, having been replaced by a negotiated settlement. I would be happy to join a short list of Ministers who have failed to take a Bill through Parliament, in this case because it was superseded by events and was no longer necessary. The inclusion of a sunset clause prevents the legislation from continuing ever onwards. Instead, if the Government wished to renew it, we would be obliged to return to it.

My reading of the amendment is that its purpose is to delay implementation of the Bill until the House is satisfied about consultation with the work force. The idea behind that is to ensure that the Government have sought and taken into account the views of the work force and their representatives on any changes to the compensation scheme, but the potential consequence would be to delay the Bill until a new scheme had been agreed. That is my understanding. The Government completely understand the concern about consultation, the need to engage and—as the old Hackney class warrior put it—the need to take people with us through the extremely delicate and difficult process on which we are about to embark.

The Superannuation Act 1972 requires that where a scheme is made under section 1 of the Act, or that scheme is amended by way of another scheme, there must be consultation with affected employees or their representatives. In case the point is not clear, that requirement does not apply when a scheme is altered by primary legislation, rather than by amending the scheme. I make that point for the record, but I will not dwell on it or build on it. The main point was made by the right hon. Member for Wythenshawe and Sale East, which is that the end game must be a negotiated settlement. That is the urgent priority. It is urgent, because after the spending review on 20 October, we will be months—arguably weeks—away from a situation in which mangers will have to take very difficult decisions about head counts.

Jack Dromey (Labour, Birmingham, Erdington)

On the end game, the Minister said in Committee on Tuesday,

“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?”––[Official Report, Superannuation Public Bill Committee, 14 September 2010; c. 64, Q146.]

It could not be clearer. I take it that the hon. Gentleman meant that the Government might be prepared to re-table the February package.

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

With a great deal of respect, the hon. Gentleman has over-interpreted my position and my interest. I was giving the gentleman speaking for the PCS an opportunity to place on record the view of the union towards the February package by asking him specifically whether it would recommend it. The hon. Gentleman should not read into that an interpretation of the Government’s position in relation to the February package, which we discussed exhaustively this morning.

To return to the amendment, I was referring to the urgent priority to reach a negotiated settlement. As for meeting the concern of hon. Members about adequate consultation with union members and civil servants, it will of course be the case that, when we reach an agreement, which is the expected outcome, there will be a proper consultation process not only because that is a statutory requirement, but because it is the right thing to do for reasons that the hon. Member for Hayes and Harlington explained.

In the meantime, the priority is to reach a negotiated settlement that will, by definition, contain an element of consultation. I assure the right hon. Member for Dulwich and West Norwood that those negotiations are being conducted very much in line with the principles that she established in her own negotiations. In that context, as and when we reach a deal, the Bill is dead and there is no need to consult on the terms. The main reason why we will oppose the amendment is that it would effectively undermine the purpose of the Bill in delaying implementation. As I think I made clear this morning, the purpose of the Bill is to break a deadlock and make it more possible that a deal is done quickly. It is about breaking the deadlock and changing the dynamic of the negotiation. Delaying the Bill’s implementation, as the amendment proposes, would undermine that rationale and logic.

As my hon. Friend the Member for West Worcestershire said, such a delay could have negative and complicated consequences for staff in the sense that, until the Bill is implemented, the old terms apply. As was debated extensively on Second Reading, there is a feeling certainly on the Government side that the current terms carry a risk of distortions in respect of decisions because the current terms favour so clearly certain groups of people and thus contain a risk that decisions will be taken not on the basis of ability, but on the basis of the relative cost of letting people go. That is clearly a situation that we do not want to prevail.

John McDonnell (Labour, Hayes and Harlington)

All the amendment does is enable the Government to secure their Bill, and give them just that bit more flexibility on the final timing of the end of the negotiations. If the Minister thinks that the unions or others will get the incorrect message that there is a lack of urgency, let us place it on the record that everyone agrees that there is a sense of urgency about concluding the negotiations. Let us not allow false messages to come out.

It has been Government practice—good practice—that when there is a fairly momentous decision to be made, the whole House is included. The amendment follows that practice of bringing a report before the House and then the House taking the final decision before—hopefully not—the Government go over the top. That is all the amendment does. It gives the Government additional flexibility.

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

I understand the point that the hon. Gentleman makes, although it is appropriate to say that I cannot recall the contents of the previous negotiating process being reported to Parliament. I am happy to be corrected on that. I come back to the point that I stressed this morning, which is that there is a fundamental principle that the discussions are confidential on both sides at this point, and therefore it is not desirable to set out the Government’s position in a report. Neither side will be keen on revealing the contents of discussions before a final position is reached. We are prepared to consider presenting something to Parliament once the position has been finalised, but not before.

The point that I am trying to stress and why we oppose the amendment is that it would ensure that the current scheme continues until the report is approved. As I stressed before, we are seeking to achieve a negotiated settlement. Once discussions with the unions are complete—we are determined they remain confidential until they are complete—we will consult staff.

On the point made about the role of the House of Commons—every Member will have a view—I am not sure that it would be appropriate for the House of Commons to be involved at such a detailed level in the internal functions of the civil service, as suggested by the amendment. Parliament has an important role in legislating and holding the Executive to account. It would not be appropriate or right for the House to be involved in the minutiae of the management process. As I said, it was not so involved in the negotiations conducted by the previous Administration.

Paul Goggins (Labour, Wythenshawe and Sale East)

I am sure that the Minister will acknowledge that Parliament is being asked to take an enormous step—to sanction a set of conditions for redundancy, which the Minister himself says he does not wish to impose on the work force. He wants something that will be better, particularly for the lower-paid. The amendment addresses the very unusual circumstances. He is asking the Committee to approve a set of conditions that he himself hopes will not be necessary. The least we ask is that he comes back at an appropriate point to report on the negotiations that have taken place. What could possibly be wrong with that?

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

If the right hon. Gentleman had listened carefully to my remarks, I said that we are prepared to consider presenting something to the House once the position is finalised, but we are not prepared to hold up implementation of the Bill until the report is approved.

I have set out the reasons why we cannot support amendment 4, but we recognise the signal that it sends about the need for proper engagement with staff at a time of considerable anxiety and insecurity.

Paul Goggins (Labour, Wythenshawe and Sale East)

The Minister made some remarks about the sunset clause and the other provisions in clause 2, which I want to come to in a little more detail when we discuss amendment 5. I assure him that I heard what he said and I welcome the offer he made, whether or not our amendment is accepted this afternoon by the Committee. His offer to keep the House informed on negotiations, particularly at crucial times, is a genuine offer and is received in the spirit in which it is made.

We are trying to strengthen the Minister’s hand. If the Government know that the Minister must return to Parliament and give a genuine, open and transparent report on the negotiations, it strengthens his hand to make sure that those negotiations achieve his aim of a reasonable, negotiated settlement that protects the lowest-paid staff. It is a genuine attempt to strengthen his hand. Now that Parliament has been drawn into this in a way that it did not ask for—this Government Bill is quite unusual in its terms—it has an interest. It is important that a formal mechanism is in place for reporting so that before the potential dreadful conditions could be imposed, which the Minister himself tells us that he does not want to impose, Parliament would have a chance to consider the quality of the negotiations and to see that everything possible had been done.

In response to the hon. Member for West Worcestershire—who, far from being a humble Back Bencher, is establishing a reputation for fair-mindedness in the Committee and elsewhere—our amendment would not provide for an indefinite delay. It would not give the trade unions a veto for ever, allowing them to prevent the publication of a report and thus stop an affirmative resolution on the conditions in clause 1 taking place. It simply states that the Minister must produce

“a report of consultations that have taken place”.

Those negotiations might have fallen apart and there might have been no agreement, and the Minister would have to come back and report that; an agreement would not be required first. There may be some delay, but it would not be an indefinite delay.

John Hemming (Liberal Democrat, Birmingham, Yardley)

Is the right hon. Gentleman saying that the Opposition would back the Bill if the amendment were accepted?

Paul Goggins (Labour, Wythenshawe and Sale East)

The purpose of opposition is to try to ensure that the Bill is properly scrutinised, and to take opportunities to make the Government more accountable when we see them. We certainly do not back the Bill, and we have made clear the reasons why. We think that negotiation is the way forward; we do not think that this is the right way to do things. When opportunities to strengthen the legislation and make Ministers more accountable arise, however, we will take them.

Harriett Baldwin (Conservative, West Worcestershire)

It strikes me that if the amendment were passed there would be a considerable incentive to continue negotiating indefinitely. It would always be possible to say, “We are still negotiating.” That incentive would be provided by the fact that the current conditions would remain in force during that period.

Paul Goggins (Labour, Wythenshawe and Sale East)

I accept that there would be some delay, but I think that that delay is merited because of the gravity of what Parliament is being asked to sanction. Interestingly, when the Minister responded to my hon. Friend the Member for Birmingham, Erdington, he could not tell us whether he had been offering a new starting point for negotiation in the exchange that he had in Committee on Tuesday. In a sense, we do not know whether that is now a new point for negotiation. We have to trust the Minister to go away and negotiate. The required report would be a way of ensuring that we get feedback on whether the Minister went away and made a genuine offer that was flatly rejected by other parties to the negotiations. We would know where we stood when we took the final decision, so the delay would be merited.

John Hemming (Liberal Democrat, Birmingham, Yardley)

The right hon. Gentleman says that delay is now merited. Why was it not merited earlier this year?

Paul Goggins (Labour, Wythenshawe and Sale East)

I will now come on to the remarks that I was going to make in response to the hon. Gentleman’s comments earlier. He talked about the Government rushing into this earlier in the year. I remind him—he knows this, but it is worth restating—that my right hon. Friend the Member for Dulwich and West Norwood and her team entered into extensive, painstaking negotiations over a period of eight months. They put out a consultation document, “Fairness for All”, to which 18,000 people responded. My right hon. Friend could not have been more painstaking, and five of the six unions accepted the terms that were offered in February 2010. One did not, and we all know the story there.

Government is a responsible position, however, and Ministers have responsibilities. We were approaching a general election and people needed to know where they stood. We knew, crucially, that had we won that general election we would have needed to deal with the deficit. The package that my right hon. Friend put forward in February would have saved £500 million over three years. It was not rushed government, it was responsible government that she was conducting.

John Hemming (Liberal Democrat, Birmingham, Yardley)

How much delay would be reasonable now?

Paul Goggins (Labour, Wythenshawe and Sale East)

I will not specify a time. The point of negotiations is that an end date is not set out—goodness me, as a former Northern Ireland Minister, I find myself getting into familiar territory here. In that context, once an end date is put in place, people know that an agreement will not be reached by then because it becomes an obstacle to negotiations. I will not suggest a date, but I do not expect the negotiations to go on for ever.

If the Minister had been genuine and open but unsuccessful, because other parties refused to respond in kind, he would be at liberty to come back. I am not going to set out time limits. It is in everybody’s interest to have certainty, particularly in the current climate, where we know that horrendous cuts in public expenditure are going to be meted out on the public services—those who work in public services also have an interest in certainty. That is why I think that negotiations—if those were done genuinely with February 2010 as a starting point—could be conducted briskly in order to bring certainty to this issue.

I do not intend to press amendment 4 to a Division. We have honestly and robustly rehearsed the issues across the Committee. The Minister and his officials will engage in the negotiations and, on Report, we will no doubt have some information about the progress of those, even if it is not possible at that stage to go into detail. We may look again at ways in which we can make sure that Parliament retains its interest in this controversial measure, but we do not want to press the amendment to a vote.

I beg to ask leave to withdraw the amendment.

Paul Goggins (Labour, Wythenshawe and Sale East)

I beg to move amendment 5, in clause 2, in page 3, leave out lines 20 to 27.

I referred earlier to the various accelerator and brake pedals that the Minister seeks to give himself through the legislation. Although I have made it clear that we do not accept the terms of the Bill—it is not the way we wish to proceed—if we take the terms on which the Minister is presenting the measure, it is understandable that he wants negotiations to carry on and to be completed. Therefore, having a sunset clause, 12 months after the Bill is enacted would make sense in his terms. It would mean that the Bill, which was no longer needed, would come to an end. It is also perfectly understandable, in his terms, that he may want a provision that enables him to bring forward the date at which the Bill will no longer be required. If negotiations are successful, he has admitted that the Bill will not be necessary.

The Opposition have serious difficulties with the Bill in relation to two further provisions. Those concerns are applicable not only to this matter, but in a wider sense to Parliament. The first is the provision to extend the period beyond the 12-month sunset clause to a further date, during which time the conditions in clause 1 could be applied. That implies that the Minister is half expecting that the negotiations may not be concluded even by the earlier part of 2012, which is at variance with the messages that we hear from Ministers. I am keen to hear why the Minister needs the power to extend further the date of the sunset clause.

More intriguingly, he wants to give himself a power to bring the legislation back if it is needed some time in the future. I am trying to understand how that process would work. For the sake of argument, let us say that despite our best endeavours the Bill is enacted, but before or after that happens, there is a negotiated agreement with the trade unions for something better than the provisions in clause 1. However, although that is agreed by negotiation, at some point in the future the Minister may suddenly want to revive the conditions in clause 1. That does not seem to make sense. Both in relation to the Bill and in general, the Minister should explain why he needs that power of extension and the power to revive the conditions—the “sunrise power”, as it has been called.

The sunset provisions are not merited by this kind of issue. I have referred to my time as a Minister in Northern Ireland, and in some of the legislation for which I was responsible, I made use of sunset clauses, but in rather different circumstances. For example, in the Justice and Security (Northern Ireland) Act 2007, we had a difficult judgment to make about whether we still needed provisions for judge-only trials, which is a highly contentious issue. As Ministers, we judged that we still needed such powers, but we made a provision in the Bill that they would end after two years unless there was a further resolution of both Houses to keep them in place. We thought that there was a controversial situation that might change, so Parliament would want to keep a close eye on developments before it decided to reinstate the provisions. When there is controversy, there may be a reason for a sunset clause and an opportunity to renew powers, but not when negotiations are going on outside this place between trade unions and management. That does not make sense.

I also recall a situation when a sunset clause was put in place because the parties in Northern Ireland could not agree when we were trying to set out a new model for a justice Ministry, following the devolution of policing and justice. It was hard to find agreement, so the Government held the ring as an honest broker and introduced a further model, which is now working. That is sunsetted until 2012, when it will be important for the parties to reconsider the arrangements and make fresh proposals.

The Government can set a sunset clause as an honest broker, which means that the other parties must get on with it and come up with a solution of their own. I do not understand, however, why sunset clauses of that type are warranted in this context. Why, in particular, is it necessary to have a provision to extend beyond the sunset of 12 months? Why on earth is it necessary to have a provision to bring the powers back into force long after a negotiated settlement may have been agreed?

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

Amendment 5, in effect, will remove a Minister’s ability to postpone the sunset clause or to revive clause 1 once it has lapsed. The apparent intent of the amendment is to ensure that the measure has a definite end date to prevent the Minister’s being able to extend it beyond 12 months.

In reply, I return to our starting point: we want and expect to reach an agreement quickly, which is the purpose of the Bill. It is a catalyst to try to break the deadlock and make that happen. Clause 2 provides for the effects of the Bill to be time-limited and we have no desire to see the legislation continue any longer than is absolutely necessary. The clause includes the option to bring forward the termination date, which signals the Government’s position.

The powers under clause 2 are necessary, particularly if we cannot reach a quick agreement. We must avoid finding ourselves back in the current situation. The House and the Committee have reached a common view that the current scheme is unaffordable and inappropriate. If, however, changes were quashed in ways that we cannot predict, and we were forced to revert to the current scheme, the ability to extend the sunset clause, which was the focus of the right hon. Gentleman’s inquiry, increases the incentive to reach an early agreement. That is the fundamental point and that is what we want to deliver. The Government’s ability to revive the measure, if necessary, may mean that the legislation can be repealed sooner than it otherwise might have been. Without that power, it is possible to argue that the Government could be minded to allow the Bill’s effects to continue until there is no risk at all that any future scheme would be quashed.

Jack Dromey (Labour, Birmingham, Erdington)

May I ask the Minister two questions arising from what he has said? First, does the suggestion that the clause is necessary in the event of the provisions of the Bill being quashed suggest uncertainty on his part as to what might happen in the event of a legal challenge? Secondly, are there any circumstances in which, once an agreement is reached, the provisions of the Bill might be used on a second occasion to change for the worse the terms and conditions of employment for civil servants?

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

No, that is certainly not the intention. The Bill only allows the Minister to improve the terms; there is no capacity to reduce them. We want to try to maximise flexibility to achieve what I think we all want, which is a negotiated settlement as quickly as possible. In that context, I have two specific answers. On the need to maintain the ability to revive the Bill, Mr Dusty Amroliwala, in his evidence to the Committee, addressed that well when he talked about arguably remote but real risks in the future when, for example, a change to the scheme might actually be approved by union members in a ballot, but be subsequently challenged in a court, perhaps by an individual. The hon. Member for Hayes and Harlington signalled that as a possibility. We want to protect ourselves against a return to the situation we are in now, where by default the current terms are in place. The ability to extend the Bill or extend the sunset provision sends a strong signal and an incentive to the negotiators to get the deal done quickly, because it is not something that can wait for 12 months.

My final point is one I should have made earlier. The ability to revive or prolong is clearly set out as requiring the approval of the House. That is important and I should have stated it much earlier. It is self-evident why that is necessary, because these are unusual arrangements. However, we assure the Committee and the House that any changes to revive or prolong would require the approval of the House.

John McDonnell (Labour, Hayes and Harlington)

It is positive that there is provision for the affirmative procedure, but that is still a power by ministerial order. The argument that the power to revive the terms of the Bill is on the basis that the terms of the Bill will be challenged, and that the challenge will be successful in court, defies logic. That would simply revert us to the original Bill, so we will go around the same circle continuously. That is like groundhog day, so I do not think that can be the argument. It needs to be clarified, perhaps in a note, because I am not completely sure about the logic of the recommendations from civil servants on the drafting of the Bill.

What would be really helpful are other examples when the award to a Minister of a futuristic power has been made in this way, because I cannot think of any, apart from emergency legislation. I now understand why the Government are seeking to have the measure classified as a money Bill, because I cannot see this power going through the House of Lords. We are all opposed to retrospective legislation, but we are even more opposed to giving powers to Ministers in perpetuity to bring back a scheme of this sort, even by affirmative order.

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

I shall not be drawn into discussing whether this should be a money Bill. That is beyond my powers and my understanding of Erskine May. However, I know a man who understands those things very well and he is called the Speaker, which is just as well as it is his decision. We will have to wait for that. He does not have to make the decision now, but it is his to make and all of us who know him will know that he will make it on the basis of a great deal of knowledge of process.

To clarify a point on which the hon. Member for Hayes and Harlington was confused, we are concerned about the risk—a remote but real risk—of a challenge to a revised scheme, not to the Bill. The central argument is about why the Government require the powers that amendment 5 challenges.

I conclude by repeating the central argument that the Government’s ability to extend or revive the Bill is necessary. Without such powers, we could find ourselves in 12 months’ time in exactly the same position as we are in now. We desperately need to avoid that, because the overriding aim and the whole driver of this controversial Bill is to break the deadlock and act as a catalyst for serious negotiation, because it is in everyone’s interests that the situation is resolved as quickly and fairly as possible.

Lindsay Roy (Labour, Glenrothes)

Is the Minister suggesting that the current negotiations are not serious?

Nick Hurd (Conservative, Ruislip, Northwood and Pinner)

No, I certainly do not want to be interpreted as having made any such suggestion. Various allusions have been made to my involvement in the negotiations, so I should clarify that I am not directly involved day to day in the negotiations, which are being conducted at official level with officials reporting to my right hon. Friend the Minister for the Cabinet Office. My understanding is that negotiations are being conducted in a serious, progressive and sensible way and that they are moving along. We want to protect ourselves and avoid returning to the present situation in 12 months’ time. That is why the powers are necessary and that is why we propose to reject the amendment.

Paul Goggins (Labour, Wythenshawe and Sale East)

The Minister has confirmed that he is not directly involved in the negotiations, which is perfectly understandable. I hope, however, that he will take away with him some of the firm and clear messages that have come out of today’s proceedings, including that the whole House wants to see a negotiation, rather than the imposition of the conditions set out in clause 1.

I remain concerned about some of the arguments that the Minister has made. I take him at his word when he says that he wants a negotiated settlement and that he wants it quickly. It makes perfect sense, from his point of view, to include a sunset clause—12 months is reasonable—and reinforce it with the power to come back to the House and bring that date forward if negotiations are successful. However, he proposes to give himself further powers to extend the point at which the sunset clause will kick in, with sunrise powers to bring back the Bill’s provisions in case there is further disagreement later. He ought to be more straightforward and not have a sunset clause at all; he can always come back to the House and rescind the legislation in future.

Either the Minister really means it when he says that the settlement must be short and quick and negotiated soon, or he needs to be clear that the process could go on for a very long time, in which case he should be honest and tell the Committee that he wants the powers for as long as they are needed. To include a sunset clause that allows him to bring the date forward, or knock it back and bring the powers back, is to give himself unprecedented and far-reaching powers that are unwarranted. I am afraid that he has convinced neither me, nor, I suspect, my hon. Friends. I urge them to vote in favour of the amendment.