Superannuation Bill

My Lords, in speaking to Amendment 7, I shall speak also to the other amendments in this group. The purpose of this amendment is abundantly clear. It would remove Clause 3. Amendments 9, 10 and 14 are consequential, as the removal of Clause 3 would obviate the necessity of sunset and sunrise clauses, and provisions relating to orders. With the deletion of Clause 3, the caps, which have been at the core of so much dissatisfaction with this Bill and with this process, would go. They remain a continuing source of anxiety and many civil servants who fear redundancy believe that their compensation will be a fraction of what they hitherto considered to be their entitlement. The caps set out in the Bill are not only punitive—certainly in relation to the current scheme—but they are, in terms of the Government’s own position, redundant. If the caps are a blunt instrument supposedly needed as a basis for discussion and to force agreement with the trade unions, they are no longer necessary, as an agreement is no longer a precondition of introducing a changed compensation scheme. We know that the Government are actively working up the detail of a scheme, which is expected to be introduced shortly after this legislation enters into force. Before the scheme order is laid, Clause 3 will have to be repealed for the scheme to be effective. The further reason the Minister has advanced for retaining the caps is that they are needed in reserve. We have just touched upon that issue. The Joint Committee on Human Rights, however, has blown the cover on this. Removal of this clause would go some way to addressing the anger that accompanied its inclusion in the Bill and would place the emphasis back on the need for consultation and negotiation. It would remove a genuine source of anxiety for those who expect to be made redundant and who fear that, by one means or another, the caps will define their compensation. We have been encouraged in our determination to remove these caps by the latest report of the JCHR in HL Paper 64. The committee considers, contrary to the view of the Government, that the Bill in its current form engages Article 1 of Protocol 1 to the European Convention on Human Rights. It was very clear that the legitimate expectation of obtaining effective enjoyment of a property right can and does amount to possessions in this case. Individuals have acted on reliance on their expectation that they will receive certain sums—for example by entering into mortgage commitments—in the belief that, even in redundancy, their commitments could be met. The committee’s view is that the limits on compensation payments set out in Clause 3 of the Bill clearly constitute an interference with that right, but not a deprivation of it. It is the Government’s obligation therefore to seek to justify that there is a sufficiently compelling public interest in doing so, provided the interference is not arbitrary, is proportionate and does not affect the very substance of the right. In summarising the Government’s justification—basically, affordability and the lack of comparability with other parts of the public and private sectors—the committee considers that the case has not been made for the limits, or caps, imposed in the Bill. The limits in the Bill are, as we know, less generous than those that the Government have said that they are prepared to agree to and, indeed, have agreed to with five trade unions. References to blunt instruments and the Government’s minimum negotiating position, the committee says, are not compatible with the argument that the limits in the Bill are a necessary and proportionate interference with civil servants accrued rights. Clearly it is too late for the Government to unpick their previous justification for the caps, but there can be no doubt that their retention, revival and potential use damages any case that changes to the CSCS are a justifiable interference with civil servants accrued rights. Far from help the Government’s position, it can be concluded that the preservation of the caps makes it more likely that the Government’s approach will be treated as incompatible with the convention. We debated a moment ago the supposed fallback protection that the caps provide in the circumstances of a legal challenge. The JCHR was sceptical about this leading to less legal certainty, because the Government would ultimately have to remedy any incompatibility by compensating all those affected. The JCHR’s view is that the route to minimise legal uncertainty is not questionable distinctions between the relative uncertainty of incompatible primary or subordinate legislation, but by providing limits on compensation that are capable of stronger justification. There are overwhelming reasons why the caps in this clause should go from the Bill. They are more trouble than they are worth to the Government; they do not contribute to the scheme that has been negotiated; they are an impediment to trust and negotiation with trade unions; their continued existence makes defence of incompatibility with the human rights convention more difficult, if not impossible; and they create a range of practical difficulties. Worst of all, they create real distress and uncertainty among our civil servants. It is time to give them up. I beg to move.