Written evidence submitted by Neil Bonner (ENT 38)

I am writing about the proposed cap on redundancy payments for public sector workers in the Enterprise Bill that will shortly come before the House of Commons.

I was shocked to discover that the current proposals include redundancy payments made by my employer, Magnox Ltd. Magnox Ltd, is a private limited company owned and operated by another private limited company and therefore could not reasonably have expected to be covered by the proposal.  The proposal is out of line with the commitment given in the Conservative Party general election manifesto. In their manifesto the Conservative Party committed to "end taxpayer-funded six-figure payoffs for the best paid public sector workers". By including payments to buy out actuarial reductions on pensions for people made redundant over minimum pension age those earning under £27,000 per annum have been brought into scope. These cannot be said to be the "best paid" workers.

Many pension schemes such as the Magnox Group of the Electricity Supply Pension Scheme provide for an unreduced pension on redundancy over minimum pension age. The consultation document makes it clear that past accrued pension rights are not affected by the proposals. For this to be the case payments to pension schemes on redundancy must be excluded from the proposed cap.

Including Magnox Ltd in the scope of the proposal is dangerous and counterproductive. Magnox Ltd and its recognised trade unions entered into the Lifetime Partnership Agreement. The purpose of this agreement was "to retain and motivate staff over a long period when they know their current role will eventually end". Attractive redundancy terms were a specific element of the agreement. To encourage someone to commit to seeing work that may finish in their mid-50s through to the end it is important to have a redundancy package that appropriately compensates them if they are unable to secure another job at that point. Otherwise there will be a huge incentive for these employees to seek employment that is not time limited in the same way. The skills possessed by employees of Magnox Ltd are highly marketable and the risk of losing them is very significant. Interfering with the terms allowed for under the Lifetime Partnership Agreement through legislation after the relevant employees had kept to it would be completely unfair and unacceptable. In addition to the above, the potential loss of the required skills needed to complete decommissioning could significantly increase costs due to slippage in the delivery program or the increased costs if extra retention payments have to be made to keep the necessary skills.

The Conservative Party’s manifesto commitment was to cap payments to "public sector workers"; if employees of Magnox Ltd and other private limited companies in the nuclear estate had known they would be impacted by the proposed cap many thousands may have voted differently in the general election. The scope of the measure in the Bill should be narrowed to match the commitment in the manifesto.

I am writing to you to ask you to raise this important issue with the Secretary of State in writing or in the debate on second reading of the Bill in the House of Commons with a view to securing a commitment that private companies in the nuclear estate involved in decommissioning sites will be excluded from the scope of the proposal. I would be grateful if you could forward any response received.   

Thank you for your time.

February 2016


Prepared 18th February 2016