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Session 2007 - 08 Publications on the internet General Committee Debates Pensions Bill |
Pensions Bill |
The Committee consisted of the following Members:Mark Hutton, Committee
Clerk
attended the
Committee
Public Bill CommitteeThursday 7 February 2008(Afternoon)[Janet Anderson in the Chair]Pensions Bill1
pm
Mr.
Nigel Waterson (Eastbourne) (Con): On a point of order,
Mrs. Anderson. It is a great pleasure to have you back in
the Chair. You were in the Chair on 29 January when I raised in the
Committee the issue of the Governments promised amendments on
the financial assistance scheme. In the light of this mornings
Court of Appeal judgmentthe Government lost, again, and were
heavily criticised by the Lords Justicesit is particularly
relevant that we find out how the drafting is coming
along.
While I am
about it, could I also ask where we are with the draft regulations? Any
would be nice. I do not think that we have seen a
single line of draft regulations, yet the Bill is peppered with clauses
calling for regulations. Perhaps the Minister could help me out as I
have given him prior warning of this point of
order.
The
Chairman:
The hon. Gentleman would agree that that is more
a question to the Minister than a point of order. Does the Minister
wish to
respond?
The
Parliamentary Under-Secretary of State for Work and Pensions
(Mr. James Plaskitt):
I am grateful to the hon.
Member for Eastbourne for giving me notice of his point of order. I
will respond in a little detail because I know that he wants
clarification on this and I will try to give it.
In oral evidence to the
Committee on 17 January, my hon. and learned Friend the Minister for
Pensions Reform said that we were focused on delivering the package of
improvements to the financial assistance scheme as quickly as possible
and that, to that end, we would be looking to use existing powers to
make changes by regulations, wherever
possible.
My hon. and
learned Friend said that as a first step we would be bringing forward a
set of regulations in March to increase payments to 90 per cent. from
the current 80 per cent., and from normal retirement age. He proposed a
short two-week consultation, subject to the views of Opposition Members
and others. We are grateful that that has subsequently been
agreed.
Those
regulations are currently being drafted and the supporting explanations
are being prepared. We expect the two-week consultation period on them
to begin on 6 March. During that period, we will conduct face-to-face
consultation with key stakeholders, including trade unions and members
of the Pensions Action Group.
In the meantime, we will today
be tabling a new clause to the Bill. This will extend the definition of
those who can qualify for the FAS to include those
whose schemes are still winding up, but who would
otherwise have received their benefits in full from the scheme. This is
necessary because to take over all members assets, we will need
the power to make FAS payments to them so that we can pay them what
they would have expected to receive from their scheme. There will be an
opportunity to consider the matter in more detail when we discuss this
new clause after the forthcoming short
recess.
In the letter
sent to all Members last Friday, my hon. and learned Friend said that
we were considering where other small adjustments might be needed to
existing powers to deliver all elements of the package of improvements
to FAS, and that there might be a need for a few further changes to be
made via the Bill, when it goes to the other place for consideration.
However, the vast majority of the changes necessary to deliver the
package can be made via
regulations.
We
intend to publish a further set of draft regulations before the end of
March, which will make provision for other key elements of the package,
such as early retirement on ill-health grounds. There will be a final
package of regulations later in the year to deliver the remaining parts
of the package that will move us to a position in which financial
assistance payments are calculated on a basis that is broadly
comparable with the Pension Protection
Fund.
I hope that that
provides a thorough answer on the matter of regulations in respect of
the FAS and other parts of the Bill. I can tell the
hon. Member for Eastbourne that we are discussingand even
consideringthe content of those with the Personal Accounts
Delivery Authority, and it is quite right that we should do so. They
will therefore be brought forward as soon as is practically
possible.
Finally, the
hon. Gentlemans interpretation of the court judgment was a bit
slanted. If he looks at the judgment in detail, he will see that there
is very much support for the Governments position with respect
to many of the matters under consideration. With regard to the rest of
it, we are considering leave to appeal at the
moment.
Mr.
Waterson:
Further to that point of order, Mrs.
Anderson. May I just clarify one point? The Minister says that he is
going to table a new clause today. The House is not sitting tomorrow,
or indeed next week, so I assume that that clause will not be printed
until we return after the break. It will therefore probably not be
debateable until the Thursday of the week after next, at the earliest.
Will the Minister undertake to let all members of the Committee
know
The
Chairman:
Order. It is my understanding that if
the new clause is tabled today, it will be printed
tomorrow, so it will be available. It is clear from the
Ministers very detailed response that there will be the
opportunity to have this discussion after the short break, so I think
that we should move
on.
Clause 73
ordered to stand part of the
Bill.
Clause 74Exception
for reserve and volunteer
forces
Andrew
Selous (South-West Bedfordshire) (Con): I beg to move
amendment No. 6, in clause 74, page 35, line 21, at end
insert
( ) subsection (1) shall not apply to any
member of the reserve forces who is paid for more than six months in
any three-year
period..
I
welcome you back to the Chair for our afternoon sitting,
Mrs. Anderson.
I do not think that I
technically have to declare an interest, in that I am not currently a
member of the reserve forces, but I was for 12 years, in an earlier
life. When I served, the role of territorial soldiers, the Royal Naval
Reserve forces and the Royal Auxiliary Air Force was somewhat quieter
than it is today. It is no secret that our reserve forces are much more
of an integral part of the combined efforts of our armed services
across the world at the moment. Not all members of the Committee might
be aware that territorial soldiers are serving in Iraq and Afghanistan.
However, it is really on the issue on the length of time for which many
of our reserve forces are serving that I have tabled the
amendment.
When I
joined the Territorial Army back in 1980, one classically did a night a
week, a weekend a month, and perhaps two weeks annual
continuous training a yearif one was really
keen, one would go on a few extra coursesand that was it. Of
course, one understood that the pay did not come with pension
contributions, and that was not a problem.
My friends who are still
Territorials tell me that there are many territorial soldiers and
members of other reserve forces who serve for quite long
periodstours of six months or more are not unusualand
come back for perhaps a short time before going out again. It is no
secret that the regular forces are short of people to fill those
places, so our three armed services rely very heavily on the reserves.
I really just want to challenge and probe the Minister as to whether he
and his officials should perhaps go back and speak to colleagues in the
Ministry of Defence, re-examine this issue, and get some exact
statistics and figures on the number of reserve forces personnel who
are serving on extended tours of duty, and perhaps back-to-back tours
of duty.
There are
people who make more or less a full-time career out of being a reserve
soldier. They might come back to do something else for a while, but
then their camaraderie, or whatever campaign is being fought throughout
the world, calls them back. That situation might continue for very many
years. The years could mount up until suddenly they take stock of their
financial situation and realise that the work for which they have
earned their income for many years has not
represented pensionable service, although their
colleagues in the regular forces have been amassing nice pension
contributions during their
service.
All that I am
really saying to the Minister is that the world has changed and there
is now a much greater length of service. The whole issue of the
military covenant is quite rightly under discussion. He might be
familiar with the phrase one Army with regard to the
Territorials and full-time Regular Army. Although this is the classic
position, it might perhaps need to be revisited, so I would ask him to
consider that. If he cannot come forward with a proposal now, I would
ask him to go back to the Department and consult with Defence Ministers
and with the wider reserve forces community on this issue, and perhaps
give us further thoughts on the matter on
Report.
Danny
Alexander (Inverness, Nairn, Badenoch and Strathspey)
(LD): It is a pleasure to be back under your chairmanship,
Mrs.
Anderson.
I echo the
comments made by the hon. Member for Eastbourne about the financial
assistance scheme. I do not wish to reopen that debate, but it is
important that we proceed quickly to a resolution on that important
subject.
Danny
Alexander:
Indeed. As the hon. Gentleman says, there was a
further defeat for the Government in a series of defeats that should
lead to prompt
action.
The amendment
tabled by the hon. Member for South-West Bedfordshire addresses an
important point that has been raised by Territorials in my
constituency. As he said, Territorials, on average, are now expected to
spend a great deal more time on active service than in the past. That
potentially changes the nature of our obligations towards them,
including in the area of pensions. Those people might
choose to be automatically enrolled in pension schemes in their regular
employment, but it is important to ensure that the Government meet
their pensions obligations to people who now spend a good deal more
time on active duty than six months every three
years.
Andrew
Selous:
I am sure that the hon. Gentleman will know from
Territorials in his constituency that some of them do not have another
job while they are serving. They might have worked as a security guard
for a while, but give that up to go on a six-month tour. They might go
on a back-to-back or extended tour. They therefore accrue no pension
contributions at home from any other
job.
Danny
Alexander:
The hon. Gentleman is exactly right, and that
is my experience. We are particularly keen for those people who move
from job to job, or might not be employed during those periods, to be
supported by the Bill. They should be part of the target group. The
Ministers response, which I look forward to hearing, is
important for ensuring that those people are properly served in the
pension world, given the service that they are giving their country as
Territorials.
Mr.
Plaskitt:
This is an important matter, and I am
grateful to the hon. Member for South-West
Bedfordshire for tabling the amendment. I certainly respect his
experience.
The clause
confirms that some members of the reserve forces and cadet forces
volunteers do not come within the definition of Crown
employment, as set out in clause 71, which we considered this
morning. The amendment would bring within the scope of the
Bills provisions on employer duty reservists who are paid for
at least six months service in any three-year period.
Reservists who attend intermittent periods of weekend training and an
annual camp might fall in that
group.
I
am sympathetic to the spirit behind the amendment,
but I shall explain why we do not think that it is
necessary. The Ministry of Defence already routinely enrols members of
the armed forces and reservists who are mobilised, or take on a
full-time reserve service commitment, in a defined benefit pension
scheme.
Andrew
Selous:
It is important to be clear about the
language involved. There is a difference between a reservist and a
territorial soldier. A reservist is someone who has been in the regular
forces and has an ongoing commitment afterwards, but I am really
talking about Territorials. I am sure that the Minister is coming to
that
issue.
Mr.
Plaskitt:
The Minister is fully aware of the distinction,
and the hon. Gentleman rightly anticipates that I am about to deal with
that point. I am just being complete for the record. I wanted to make
it clear that reservists who are mobilised or take on a full-time
reserve service commitment are enrolled into the defined benefit
scheme.
Furthermore,
we may reasonably expect non-mobilised reservists and cadet force
volunteers to be in civilian employmentthe same goes for most
of those in the Territorial Armythrough which they will have
the same right to workplace pension saving as any other worker as a
consequence of the Bill. The commitment is there for those who have an
extensive engagement with the armed forcesthey are enrolled
and, incidentally, none has opted outbut for other categories
of people, most will be deriving the bulk of their income from other
sources and will be automatically enrolled through their other
employment, rather than through very short periods of spasmodic
engagement with the armed forces. We would certainly want everyone in
that category to be covered by the Bill, but it is likely that they
will be covered by another
route.
1.15
pm
I
want to draw the Committees attention to our plans for an
important change in the way the armed forces are to be treated by the
Bill. Members of the forces occupy a special position in law. Many
employment law remedies, such as unfair dismissal, do not apply to the
armed forces and we need to avoid any potential for confusion.
Therefore, after very full consideration and consultation with the
Ministry of Defence, we have decided that bringing the armed forces
within the scope of the employment right created by this Bill would be
inappropriate.
Our
policy intention is therefore to remove the armed and reserve forces
from the scope of this Bill in their entirety. I want to reassure the
Committee that that does not mean that we will be treating members of
the armed forces less favourably in any respect. As I have already
explained, the Ministry of Defence already automatically enrols members
of the armed forces as a matter of routine. This includes reservists
who are mobilised or have taken on a full-time reserve commitment. All
those people become members of a non-contributory defined benefit
scheme. Unlike the arrangements for other public servants, the Ministry
of Defence has no record of anyone ever opting out of the scheme.
Naturally there will be a further opportunity to debate this issue in
more detail once the Government amendment to achieve our aim is tabled
and before us.
It
might be helpful at this point if I clarify the position for cadet
force adult volunteers. These people offer their time and effort
without receiving a wage or pension contributions, although they might
receive recompense for attendance. As such, they do not have access to
pension savings in respect of their voluntary work. While we recognise
the important contribution
of these volunteers, which supports the Government's
policy of engaging with young people, and the
responsibilities involved when working with them, we do not believe
that this voluntary service should attract pension provision when there
is a reasonable expectation that such individuals will be saving
separately by means of other employment, and as such will be
automatically enrolled into a scheme. Having made this decision, it
seems sensible to make it clear that such individuals are not to be
brought within pension provision in respect of their voluntary work
within the forces.
The
hon. Member for South-West Bedfordshire has raised an
important point and given me the opportunity to clarify the situation.
With those reassurances, I hope that he will be able to withdraw the
amendment.
Andrew
Selous:
I have listened carefully to the Minister. I do
not doubt his good will and good intentions when he says that he is
going to table an amendment to take all the armed forces out of the
Bill. He spoke about those who serve with the regular forces and about
reservists and then, if I heard him correctly, he said that most
Territorials will have the opportunity through their workplace to save.
However, he did not address the point that I specifically raised about
those people, many of whom I served alongsideI remember well
their lifestyle and employment
history.
It strikes me
that in the same chapter of this Bill we have a clause about agency
workers. The TUC, quite rightly, has been standing up for the rights of
agency workers. It might be an odd term, but, in a sense, this is
another group of agency workers who are putting their lives on the
line. I had not decided to force a vote, but I am not satisfied with
what I have heard from the
Minister.
Mr.
Plaskitt:
Let me try to help out the hon. Gentleman. I
reiterate that the reason why we take our position is because normal
employment rights do not apply to the armed forces, save in respect of
anti-discrimination measures, as he knows from his experience. All
other normal rights, such as unfair dismissal, do not apply. There is
no dispute about that, or pressure to alter it, because of the unique
role, terms of engagement and demands placed upon those people. The
hon. Gentleman quite reasonably made all those points.
If we were to
include the armed forces in this measure, we would run against the
understanding that normal employment rights do not apply. The idea of
automatic enrolment is another normal employment right. For the sake of
consistency, it is better to be clear that this does not extend to the
armed forces. It would be inconsistent to make a special arrangement
for the group of people about whom he talks, given that the armed
forces as a whole are not going to be included because of their special
employment status. That would be odd, because the group about which he
talks will, for the most part, have alternative employment and will be
automatically enrolled. I want the landscape to be
consistent.
It is not
that we are trying to do down, or to be unreasonable towards, the armed
forces. They have very good schemes that more than adequately meet the
qualifying criteria. The issue will not arise because we want to treat
it separately to keep this consistent with every other aspect of
employment rights. I hope that helps.
Andrew
Selous:
I am grateful to the Minister, but I do not fully
accept the logic of his argument. I understand that
serving regular forces or Territorials do not have normal employment
rights in terms of how they conduct themselves. That would obviously
not be appropriate, but I am not sure that the analogy can correctly
extend to pension contributions.
While I accept the
Ministers argument about normal employment rights, there is an
issue about this group of people. The Minister seems
to be sticking to his argument that all the Territorials have other
jobs through which they can auto-enrol. My point is that there are some
who treat being a Territorial as their main form of employment. They
might have very casual employment outside the Territorial Army when
they are back in the UK for perhaps quite long periods when they are in
their 20s or early 30s. It does not seem right to say that there is a
blanket
exemption.
Mr.
Plaskitt:
Let me try to reassure the hon. Gentleman
further. We are not trying to be unreasonable towards the group of
people whose interests he is speaking up for perfectly
reasonably.
There is
a further important problem that the hon. Gentleman needs to consider
when he decides whether to press his amendment to a Division. TA
members are volunteers. Volunteers cannot be jobholders within the
definitional terms of the Billthey are not an
employee and not a worker. Given that we have already accepted the
definition of jobholder, it would be difficult to get a TA volunteer
into the terms of the Bill. It would be hard to make the hon.
Gentlemans proposal fit with every other aspect of the
provision.
Andrew
Selous:
Again, I hear what the Minister says.
He has a brief and a position that he is doing his
best to advance, but I do not accept the logic of his argument. Once
people put on the Queens uniform as a reserve soldier, sailor
or member of the Royal Air Force, they are a jobholder. It would be
easy to amend the definition in the Bill. Those people are certainly
subject to the full demands of military law the moment that they walk
through the door and put on the
uniform.
Auto-enrolment
will not be forced on anyone. People will have the option to say no. I
have not been reassured by what I have heard. If there were enough
members of the regular forces, for whom the Government would be paying
pension contributions anyway, the Government would be paying this money
as a matter of course. There are long periods of reserve service
because the regular forces are under strength at the moment, and I will
press the amendment to a
Division.
Question
put, That the amendment be
made:
The
Committee divided: Ayes 4, Noes
8.
Division
No.
4
]
AYESNOES
Question accordingly
negatived.
Clause 74 ordered to stand
part of the
Bill.
Clauses
75 and 76 ordered to stand part of the
Bill.
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