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Phil Hope: By way of introduction, it may be helpful to explain the intention of the clause. It re-enacts existing powers in section 26 of the 1947 Act, which allows the Secretary of State to bring into operation pensions schemes for persons employed by a fire or rescue authority or by a Scottish fire authority. We referred to schemes in the plural so that there is no doubt that, as well as bringing in the new pension arrangements that we believe are necessary for the new, modernised fire and rescue service, we can retain the existing scheme and have a separate scheme for death and injury benefits. Richard Younger-Ross: One of the problems faced by the present pension scheme is that its funding comes out of revenue. Does the Under-Secretary have any proposals to change that for the existing scheme, so that fire authorities do not have it coming out of their revenue every year? Phil Hope: I will come to that point in due course. The third scheme will be required because we need to separate out death and injury benefits resulting from work-related incidents from the pension arrangements, both in the current and any future pension scheme. It is no longer considered permissible under existing pension legislation to include compensation arrangements in a new pension scheme. We are reviewing pension arrangements and aim to publish our proposals for change for public consultation in June. The reference to Scotland is necessary because, although firefighting and fire safety have been devolved to Scotland since 1947, pensions remain a reserved matter. We deal in clause 60 with the application of clauses 33 to 35 to Scotland. Subsection (2) sets out the matters that may be included in a scheme made under subsection (1), including such matters as who may be members, the transfer arrangements for people joining the scheme from another scheme, contribution rates for employees and employers and payment of compensation or damages in respect of injuries. It also, at paragraph (e), enables new funding arrangements to be established. That is, I think, what the hon. Member for Teignbridge is concerned about. Firefighters' pensions are currently paid from revenue, and Column Number: 313 pension contributions are treated as revenue by fire and rescue authorities. Central Government revenue support grant reflects year-on-year increases in those pension costs, but it is based on average costs across the country rather than the actual spend of an authority.The problem for fire and rescue authorities, which also arises for police authorities, is that there is volatility in pensions expenditure caused, for example, by the uneven incidence of lump sum retirement payments. That was considered in 2001, and possible solutions were identified. We will be considering those in the context of the modernisation programme. As a consequence, we are providing for an extension of the matters which may be included in any scheme to cover the provision of employer contributions and the payment of contributions into a fund. We can then make different arrangements for financing and funding pensions if that appears, following consultation, to be the best practical solution to the present problems confronting authorities in financing pensions. Amendments Nos. 166 and 167 remedy a small omission in the Bill. We need to retain the powers that the Secretary of State already has under section 16 of the Superannuation Act 1972 in relation to pension schemes made by order under section 26 of the Fire Services Act 1947. Section 16 allows for any scheme made under the 1947 Act to have effect from a date earlier than the making of the order, so we need to ensure that orders made under clause 33(3) can operate on the same basis. That enables us to remedy, for example, any defect in the pension scheme which may become apparent as a consequence of a decision of the courts, perhaps in relation to another pension scheme, or where consultation has delayed amendments necessitated by changes in pension law more generally. I commend the amendments to the Committee. I turn now to the amendment No. 115 tabled by the hon. Member for Runnymede and Weybridge. The purpose of subsection (1)(b) is to enable any scheme made under the clause to make provision for the payment of pensions, allowances and gratuities in respect of persons who die while employed by a fire and rescue authority or by a Scottish fire authority. It replicates provision made in section 26(1) of the 1947 Act and puts it beyond any doubt that any scheme may make provision for the payment of benefits in respect of people who die while in service, whether they die in exercise of their duties or for any other reason. That is why we are repeating in the Bill that provision from the 1947 Act. Mr. Hammond: You do not need to do it. Phil Hope: The hon. Gentleman says that, but we repeat it to put the matter beyond any reasonable doubt. Amendments Nos. 116 and 117 would seek to limit the freedom of the Secretary of State to recruit permanent staff into Her Majesty's fire service inspectorate, or into other posts, particularly training Column Number: 314 posts at the Fire Service College. While such staff may be willing to transfer any pension rights into a scheme established for their new employment or to defer their rights in any scheme established for the fire and rescue service, that may not be satisfactory, or in the best interests of the individual, who may be disadvantaged by such a change in their pension arrangements.If we are to ensure that we can attract good staff to central service, which will benefit the advice and training that can be given, we need to ensure that members of the fire and rescue service do not believe that their benefits, including their pension, will be adversely affected. The provision will also allow us to respect our obligations to members of the fire and rescue service who join the reserve forces and would otherwise run the risk of being adversely affected because a fire and rescue authority would not be able to treat any periods of service in the reserve forces, the Territorial Army, as pensionable service. Mr. Hammond: On a point of order, Mr. O'Hara, will you clarify whether it is possible for the Programming Sub-Committee to be reconvened at any point when the Committee is sitting? The Chairman: As long as there is time to do so. I do not know that there is time for the Programming Sub-Committee to meet and for me to wield the knife, as I am instructed to do, at five o'clock. Mr. Raynsford: Further to that point of order, Mr. O'Hara. May I suggest that we have an immediate meeting of the Programming Sub-Committee, if that is in order? It may facilitate arrangements to lift the knife so that this debate can continue on Tuesday morning. The Chairman: Let us do that.
4.59 pmSitting suspended.
5 pmOn resuming— Resolved,
Phil Hope: Amendment No. 118 would prevent people who move from employment with one fire and rescue authority to a new authority, or who take employment with the Secretary of State on central service, from transferring their pension rights under arrangements which are set out in the Firemen's Pension Scheme Order 1992 and which predate that order. Under those arrangements, payments representing the cash value of pension rights earned by the individual's service in the employment of the first employer are calculated by reference to actuarial tables and are paid to the new employee. Acceptance of the amendment would mean that the existing arrangements for transferring pension rights could not continue to operate under any new scheme. These have worked well in practice and are understood by firefighters, which is why we cannot accept the amendment. Amendment No. 119 would not seem to provide any safeguard for either a fire and rescue authority or a firefighter. I shall explain that. The 1992 order Column Number: 315 provides for injury awards to be made when a firefighter is permanently disabled as a result of a qualifying injury and is retired. If the person has a qualifying injury—one that, for example, occurred in the execution of his duties—he is entitled to an injury award which is determined by reference to loss of earnings. If the person is entitled to any other benefits—for example, payable by the Department for Work and Pensions—the award will be reduced by an equivalent amount to avoid duplication.I can give the hon. Member for Runnymede and Weybridge the assurance that he requires. If the firefighter is not content with an award, there will be rights of appeal under any new scheme as there are under the existing scheme. If the firefighter received an injury award, he would not be prevented from suing for negligence any person or body, including a fire and rescue authority, and that would not affect any benefits paid under the 1992 pension scheme. However, certain compensation payments paid under the firefighters conditions of service—the grey book—are liable to be offset by other compensation payments because they are regarded as an alternative to no-fault compensation payments, and the offset safeguards the financial position of the fire and rescue authority. Entitlement to benefits under the 1992 order is a right subject to the provisions of the scheme and not a Column Number: 316 matter at the discretion of the fire and rescue authority. There is no need for a requirement in such circumstances for an individual to accept any award.With that explanation, I hope that the hon. Gentleman will recognise that we have dealt with all his concerns and I ask him to withdraw his amendment. Mr. Hammond: I am most grateful to the Under-Secretary and I am glad that he has had the opportunity to explain the purpose of the provisions. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Amendments made: No. 166, in
No. 167, in
'(2A) An order under this section may take effect from a date which is earlier than that on which the order is made.'.—[Phil Hope.]
Further consideration adjourned.—[Mr. Jim Murphy.] Adjourned accordingly at three minutes past Five o'clock until Tuesday 2 March at twenty-five minutes past Nine o'clock.
The following Members attended the Committee:
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| Prepared 26 February 2004 | |
