| Previous Section | Index | Home Page |
Mr. Leigh: My hon. Friend is receiving considerable flak from the Opposition about how mean he has been, but he would be the first to accept that, in the private sector, things such as detriment contributions are not available. Will he answer the question that I put to the hon. Member for Holborn and St. Pancras (Mr. Dobson)
that he declined to answer? While the public are concerned about junior members of staff who lose their jobs altogether, what they are really worried about is what happened in the previous reorganisation, when senior members of staff cushioned their positions. They ensured that, where there were two directors of housing, both kept their jobs and a controller of housing was appointed on top of them. That is what the public want to hear about. Will my hon. Friend make it clear that the Government will ensure that such cheating of council tax payers does not continue?
Mr. Curry: I am grateful to my hon. Friend for reflecting a point of view that one hears widely. People wish to make sure that the reorganisation is carried out effectively and does not become a pretext for people to upgrade their jobs when a change in functions is not necessarily involved. We will examine carefully some of the increases in salary that appear to have been awarded in some authorities.
Mr. Dobson: Will the Minister give way?
Mr. Curry: I shall in a moment. I must make it clear to my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh) that the regulations do not include an element of surtax on people who have received a higher salary to fund the detriment compensation scheme.
Mr. Dobson: Will the Minister comment on the eligibility of Ministers of the Crown who have lost their ministerial posts and gone to the Back Benches--
Mr. Deputy Speaker: Order. The Minister would be wise not to reply to that.
Mr. Curry: Mr. Deputy Speaker, it is with the utmost restraint that I observe your injunction not to respond, deeply conscious as I am of what the ministerial compensation would be should I suffer a mishap in my relations with the Prime Minister over the next 24 hours.
Mr. Curry: The hon. Gentleman is in characteristic form--largely unoriginal but none the less endearing for that.
The hon. Member for Holborn and St. Pancras compared this scheme with that made available in 1986. Such comparisons must be fair and take into account all aspects of the two schemes. Under the 1986 scheme, the compensation payable was limited to £5,000 a year. There is no limit in these regulations, which in that respect are more generous. That was something that the local authority associations and the unions specifically asked for during the consultation.
Secondly, in the 1986 scheme a person had to have been in employment continuously for three years before reorganisation before becoming eligible for compensation. We have taken a more liberal approach in the regulations and require people to have been in employment on 1 April in the year before reorganisation--that is, one year's service at the most.
Thirdly, in the regulations, we require employers to make monthly payments of compensation. In the 1986 scheme, they were required by law only to make annual payments in arrears, although authorities had the option of making interim payments. If the schemes are compared in their totality, recognising the need to take account of the money available, the regulations offer significant benefits when compared with the scheme available in 1986, and are better able to deliver their object. It is a better-engineered scheme.
The detriment scheme aims to ease the transition from the old to the new staffing structure. It is not salary protection. New councils will wish to set up new staffing arrangements, with a salary structure to match and staff will get the salary set by the employer as the rate for the job. That may well increase over time. The payments under the regulations are compensation, not part of that salary and there is no presumption that they should increase in line with the salary.
The underlying salary may, of course, increase, and the employee will not be denied that increase if the increase in salary is matched by a decrease in compensation. If an individual is unfortunate enough to suffer more than one reduction in remuneration during the prescribed period, the regulations allow those reductions to be considered as a separate event, and allow separate sets of detriment payments to be made in respect of each reduction.
I have used the term "salary" as a convenientform of shorthand. The regulations provide for total remuneration--that is, salary as well as other payments or benefits in kind--to be taken into account in the calculation of entitlement to compensation. The definition of remuneration is similar to that used for pension purposes, and is generally familiar.
Some consultees have been anxious about the effect on the pensions of staff who qualify for detriment compensation under the regulations, and have asked why detriment payments are not pensionable. The answer is that there is no need for them to be: pensions are protected by other means. The Local Government Pension Scheme Regulations 1995--which, no doubt, hon. Members will instantly recall--provide for staff to receive a certificate of material change enabling them to elect to have any pensions calculations based on higher previous earnings.
The certificate enables staff to choose their highest earnings in a period going back as far as 13 years. Staff are therefore protected--and, in addition, will receive a slight financial benefit through not having to pay contributions to their local government pension schemes on their detriment compensation.
Mr. Curry:
No doubt the hon. Gentleman will wish to deal with the subject in his own speech. If the House gives me leave to do so, I shall try to respond to any additional points that he makes in my winding-up speech.
Mr. Curry:
The hon. Gentleman seems to be rather anxious for his dinner.
Mr. Miller:
In fact, the hon. Gentleman had his dinner earlier so that he could listen to the Minister.
I accept that regulations are in place to deal with the pensions certificate, but they do not provide for a notional final salary--the salary that someone within four or five years of retirement might have achieved under the previous arrangements. There is a difference between the position created by the regulations to which the Minister referred and the detriment that some people might suffer. I do not expect the Minister to make arrangements for someone who may have just joined the scheme, but those approaching pensionable age could be significantly disadvantaged by the final salary arrangements. Could not amendments be made to the existing regulations?
Mr. Curry:
I shall reflect on what the hon. Gentleman has said, and hope to deal with it later if the House gives me permission. If I cannot do so, I shall write to the hon. Gentleman giving more details. Pensions are a complex issue, and I do not pretend to be conversant with every detail. The hon. Gentleman and I will have to mug up on it.
We have been asked to make the scheme widely available, and we have done so; but there are some qualifying criteria. The drop in salary must be attributable to local government reorganisation, because the regulations do not extend to more general restructuring exercises. The employee must be in the employment of a relevant council on or before 1 April of the year prior to the reorganisation; staff employed after that date must accept the job on that basis. The drop in salary must be suffered in the prescribed period, staff must be employed by councils directly affected by reorganisation, and detriment compensation will not be payable to any individual receiving redundancy compensation or retirement benefits.
Mr. Frank Cook (Stockton, North):
Hon. Members will not be surprised by my speech. Over the past15 months, I have opposed a number of measures of this kind. I am disappointed that so few hon. Members are present, because, as my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) pointed out, the regulations will eventually affect hundreds of thousands of people.
I suppose that the reason for the poor attendance is the piecemeal way in which the Government are introducing these measures. They have used a combination of SI--statutory instrument--and SO, or stealth and obfuscation. Many of my hon. Friends--and, I suspect, quite a few Conservative Members--will regret the scant regard that has been paid to the way in which those gradual steps have eroded the forms of local government that existed until this year.
| Next Section
| Index | Home Page |