Exactly. That is a really important point, given that this is a clear U-turn in Government policy following the announcement last year. There is absolutely no such exemption in the Bill. In the NHS, for example, even without the inclusion of pension strain payments, according to research by the union Unison, the proposed cap will affect nurses, midwives and paramedics with long service. These issues were the subject of very high level negotiations, where a higher level cap was set to mitigate against penalising long service in key front-line services. For this reason, will the Minister consider exempting people with salaries on or below average earnings?
On industrial relations, the exit payment cap will be implemented across a range of public service areas that already have fair, transparent and effective procedures in place which arise from collective agreements negotiated between employers and trade unions that are sensitive to the specific issues facing each sector. If we have anything to learn from the junior doctors’ action, it is that good industrial relations are vital and that we should not legislate haphazardly to weaken terms and conditions.
The Secretary of State said we should move away from the “Whitehall knows best” attitude—I could not agree more—but the Bill weakens that ambition by imposing an arbitrary cap across the civil service on exit payments and by restricting the freedom and flexibility that employers require to manage restructuring and redundancies effectively, at a time when public sector employers require it most. The public sector is in the middle of its most dramatic budget cuts in decades, and employers are having to restructure almost every aspect of public services to meet their new budgetary constraints. In moving the goalposts in the middle of an extended period of large-scale reorganisation, without an initial period of protection, particularly for staff over 50, the Government are further limiting the opportunity for employers fairly to reconsider strategic and operational decisions made in previous reorganisations and planned to be effected in stages on the assumption that current agreements and policies would apply. Will the Minister therefore consider a grace period for public sector employers undergoing reorganisation?
On the public purse, the Government seek to justify the cap solely on the basis of the cost of payments to staff in the public sector between 2011 and 2014. This is the only evidence provided in their consultation, but it fails to recognise that, during the same period, employment in the civil service fell by 107,350, under the current civil service compensation scheme arrangements. No evidence is provided to demonstrate that the cap will deliver value-for-money savings, as changes in the compensation payments naturally affect the number of staff willing to exit the public sector, which might engender higher costs elsewhere.
As for the coalition Government’s early conciliation scheme, which has actually worked quite well, the proposals could have a perverse impact by diverting people to tribunals, where settlements will not be capped, and avoiding settlements at this optimal stage. Ministers should therefore consider exempting such conciliation payments from the cap.
Finally, two more important exceptions should be considered: first, whistleblowers, and secondly, people retiring on ill-health grounds. Whistleblowing is a vital part of our democracy, and capping settlements in such cases could easily deter people from blowing the whistle, given that this often puts their livelihoods and reputations at risk. The Government have made clear their intention not to include those retiring on ill-health grounds and that this will be put in secondary legislation, so will the Minister take this opportunity to make it clear that this is the case and that such people will be explicitly exempted?
5.22 pm