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Lord Rooker: I want to put a couple of points on the record about that before the noble Baroness concludes. I have not come with a list of horror stories from the 1980s and 1990s, but I could have done. I could have brought a list of cases in which compulsory competitive tendering was imposed on local authorities and the only way in which people could win bids was by cutting the wages and pensions of the workers who were transferred. That was the way that it worked. I have seen documentary after documentary about what happened in the health service and local government.

Best value is not like that; that is part of what we are trying to solve. We want to introduce good-quality services but not at the expense of cutting the pension provision of the employees concerned. The noble Baroness made my case for me; she said that pensions were the one thing that people were concerned about. They were not looked after in the 1980s when CCT was first brought in; it was not a key element, although it is now. I was very pleased by those comments.

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I also take the noble Baroness's point that if 75 per cent of costs are staff costs and pensions, one wants entrepreneurs to look for other ways of making savings and introducing efficiencies. I completely accept that. There has been much consultation on the matter. The Local Government Association encouraged local authorities to operate the Cabinet Office statement on the practice of transfers, as one would expect. It is certainly not against bidding successfully against competitors. That was part of the problem in the past: it was not prepared to undercut wages and pensions but others were. That is why the situation has changed.

Baroness Hanham: I hear what the Minister says. The approach could make the whole process so prescriptive that it will effectively drive a coach and horses through the possibility of anyone being able to achieve any benefit from competitive tendering. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 210ZA not moved.]

Baroness Hamwee moved Amendment No. 210ZB:

    Page 57, line 9, at end insert—

"( ) shall be the subject of consultation with representatives of authorities and of staff before they are issued"

The noble Baroness said: If the amendment is not acceptable to the Minister, I hope that he will at least welcome the fact that I should be able to move it in a minute and a half.

We are back to Clause 101(6) and the different directions and guidance that may be given to different categories and so on. I propose that they should be,

    "the subject of consultation with representatives of authorities and of staff before they are issued".

In other words, I seek an assurance that there will be consultation. I hope, as has happened previously, that the Minister will respond with the assurance, "Of course". I beg to move.

Lord Rooker: I believe that I can satisfy the noble Baroness on the basis that I will argue that both halves of the amendment are unnecessary because what she seeks will happen anyway.

Briefly, the first half of the amendment seeks to ensure that directions are the subject of consultation with representatives of local authorities. However, in 1997, the Government, along with the Local Government Association, signed a commitment known as A Framework for Partnership, which set up a framework for the conduct of relations between central and local government. My experience, rolling round the ministries, is that relations, contacts and partnership arrangements between central and local government are better than they ever have been in the past 30 years. Included in that framework was an agreement that there should be full and effective consultation between central and local government on all matters of common concern, with the exception of matters relating to national security. We accept the need to have regard to the views of local government; there is a firm commitment to consultation.

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The second half of the amendment seeks to ensure that directions are the subject of consultation with staff or their representatives. I submit that that, too, is unnecessary. The provisions originate from the package of measures that we announced following the review of best value. The review was taken forward by a group which included representatives of trade unions, private and voluntary sector service providers, local authorities and the Audit Commission. We intend to take the views of all those parties into consideration when we finalise directions. I hope that in view of my explanation, the noble Baroness feels assured that what she seeks will indeed happen at the relevant time.

Baroness Hamwee: I thank the Minister for that. I maintain, as I did in relation to previous amendments—I daresay that there may be some more to come—that there is value in getting things included in legislation, which may well last a good deal longer than a code of practice that is entered into by a particular government. That is why we moved the amendment and will continue to move similar amendments in order to make that point. I am grateful to the Minister for his assurances and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 102 agreed to.

4.30 p.m.

Clause 103 [Staff transfer matters: pensions]:

Baroness Hamwee moved Amendment No. 210ZC:

    Page 57, line 44, leave out sub-paragraph (ii) and insert—

"( ) are no less favourable than,"

The noble Baroness said: I shall speak also to Amendment No. 210ZD. UNISON brought these matters to our attention. It is not complaining about the substance of the clauses; it welcomes them very much. The amendments would tidy up some points.

Clause 103 deals with pensions when staff are transferred. Subsections (2)(b) and (5)(b) of Clause 103 require that pension protection is "the same as" or counts as being "broadly comparable to" or "better than" before. I acknowledge that "better than" is very good and welcome. However, "broadly comparable" means that the terms need not necessarily be as good as before. The definition of pension protection states that, in any event, what matters is how the terms count under the directions given by the appropriate person. The amendments seek to ensure that existing pension conditions are not welcomed.

I understand from UNISON that there have been problems in practice. The local government pension scheme that applies at present is at the minimum standard needed to allow retired people to live above the poverty line. I am trying to be objective and not introduce too much emotion. Any provision less than that would result in people being dependent on benefits.

The current TUPE regulations do not protect the pension rights of transferred staff. The only measures are in the Government's guidance in Cabinet Office

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Statement on Staff Transfers in the Public Sector, which was issued three years ago. It recommends using the same terminology: that public bodies should ensure that there are "broadly comparable" pensions for TUPE transferred staff.

UNISON states that evidence shows that contracted-out staff sometimes means inferior pensions; for example, employees not achieving bulk transfer of tasked service, and transferred employees receiving a money purchase pension scheme rather than a final salary pension scheme—that is quite topical. Another example is changes detrimental to the transferred employees as made during the contract. Also, "broadly comparable" pension schemes are often capped.

I understand that recently the Government agreed changes to the Cabinet Office code of practice on workforce matters, which was published recently. That included the phrase "no less favourable" rather than "broadly comparable" as the appropriate phrase. I beg to move.

Lord Rooker: The noble Baroness is quite right about the origin of the amendments. I understand that they were tabled on Report in another place but were not debated. It is therefore right that the amendments are moved now so that we can place an explanation on the record. As I said to officials this morning, I have taken part in this debate before. I have a feeling that the issue arose in the Police Reform Bill, where there was an explanation of the differences in the terms. In a moment, I shall describe those terms as an art-form among the pensions cognoscenti—do not ask me to spell that word.

The amendments reflect concerns over the term "broadly comparable" in an earlier draft code of practice for new joiners to outsourced workforces, which was published in final form on 13th March. The term "broadly comparable" in the draft code of practice was replaced with "no less favourable" in the final version.

However, the use of the term "broadly comparable" in the context of the Cabinet Office statement of practice, and thus in this clause, does not compare with the use of the term in the draft code. There are two reasons for that. First, the term "broadly comparable" in the clause refers to pensions and is a term of art that is narrowly defined and widely understood among pension providers, pension lawyers, et cetera. The term as used in the draft code of practice did not relate to pension provision, but to non-pension pay and conditions.

The amendments would modify a well-used policy statement that is currently securing pension protection across the public sector generally. They would create uncertainty, as they would signal a test different from the actuarially defined "broadly comparable" level of pension benefits, but without specifying what the new test would be. They might also prevent contractors from providing alternative pension schemes offering benefits of a similar value, even though those could be better suited to the needs of the staff and the contractor.

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We intend that transferees in local government should all enjoy the same level of pension protection and be offered either retention of the local government pension scheme or a broadly comparable scheme. There is an issue of terminology in calculating and transferring pensions. Pension specialists and actuaries use a whole new bibliography and language. The amendments would create confusion, as the terms used in pension provision are very narrow and widely understood.

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