Enterprise

Written evidence submitted by Derrick Ford (ENT 26)

RE: Public Bill Committee Enterprise Bill 2015

Dear Committee Members,

I am writing regarding the proposed cap on redundancy payments for public sector workers outlined in the Enterprise Bill 2015 which has now been placed before your House of Commons committee. Much of the text below has already been forwarded to my local MP Dr Dan Poulter before Christmas and I understand he will be passing on my letter to him. This submission expands some of the cost implications detailed below.

I have been employed at Sizewell ‘A’ since 2001, and before that at Dungeness in Kent having been initially employed by the then Central Electricity Generating Board (CEGB) back in 1989.

My role at Sizewell is as Head of Radiological Protection, this involves the managing of a small team of staff who set the Radiological Protection standards for the decommissioning of the site. This ensures that the staff and public are protected from the hazards of radiation and ensures that excessive levels of radioactivity are not permitted to enter the environment. Over my 26 years in the industry I have amassed a considerable knowledge and experience of the operation and now decommissioning of nuclear power stations in the UK.

1. As the UK’s fleet of Magnox nuclear power stations reached the end of their life it was acknowledged that the company ‘Magnox Ltd’ would find it difficult to retain staff when they knew that their working life was finite. Magnox Ltd is a private sector company which owns and operates the Site Licence Company which employs the staff.

In 2010 the company ‘Magnox Ltd’ and its trade unions entered into what became known as ‘The Lifetime Partnership Agreement’. This agreement’s role was ‘to retain and motivate staff over a long period when they knew that their current role will eventually end’. Attractive redundancy terms were a specific element of the agreement. These were necessary as key skilled staff knew they were likely to be made redundant below their normal pension age due to the closure of the sites. These ‘golden handcuffs’ have worked reasonably successfully over the last few years to reduce the outflow of staff to longer term roles elsewhere.

2. The proposed Enterprise Bill introduces a £95,000 cap on public sector payments which includes redundancy payments and what are known as ‘strain payments’, the money required to top up an individual’s pension to make up for them leaving employment early.

3. The exit payment aspects of this bill will seriously undermine the agreement between my employer, Magnox Ltd, and its employees and bypasses the normal terms and conditions already negotiated with my employer. What will happen is that individuals will no longer see stability working for Magnox and seek employment elsewhere in the Nuclear Industry. There are many opportunities out there including existing EdF nuclear generation, EdF new build at Hinkley C and Sizewell C, Horizon Nuclear in Gloucestershire and Wales and other opportunities as other companies enter the UK nuclear market.

4. Typical EdF salaries already exceed those of Magnox so without the ‘golden handcuffs’ approach there will be an escalating loss of staff from Magnox sites.

For example at my grade the typical salary range within Magnox is £60,747 to £79,996 with a median salary of £69,951. In EdF it is £65,745 to 84,698 with a median salary of £73,922, a difference of approximately £4,000 per year. For the next grade down the difference is even higher at approximately £6000.

5. To continue decommissioning the Magnox sites will require the use of less experienced but more expensive outside contractors. For instance to replace myself or one of my colleagues with a contractor will cost Magnox, and ultimately the tax-payer, £30,000 a year over and above our existing salaries. If this happens across the whole Magnox fleet, and across all the different specialisms, it will soon drive up the cost of decommissioning, outweighing any savings to the public purse from the exit payment cap. In fact by the nature of supply and demand, the costs of employing specialists, such as myself, will only increase as the new opportunities listed above open up. This could have a significant impact on the safe, timely and cost effective decommissioning of the sites managed by Magnox.

6. In addition, to some extent the imposition of an exit payment cap could be seen as discriminating against employees who have remained with Magnox due to the Lifetime Partnership Agreement rather than jumping ship. It effectively punishes the loyalty and commitment to Magnox they have given over the years. By the nature of the age profile of Magnox employees this could also be Age Discriminatory as it penalises those with long service not specifically those on a high salary.

7. The amendments I would propose to this bill are:

· Magnox employees should be removed from the scope of the regulations as Magnox is owned and operated by a private company independent of government. There is already a list of excluded bodies listed in the consultation documents to which we could be added.

· Remove pension top-ups, ‘strain-payments’ from the scope of the cap.

· Introduce a grace period of perhaps 12 months from introduction of the regulations during which existing redundancy agreements can be renegotiated. This will allow organisational restructuring, such as that currently taking place at Magnox, to continue.

I would be grateful if you could consider these amendments and if you require any further information do not hesitate to contact myself.

February 2016

 

Prepared 18th February 2016