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Civil Service Compensation Scheme

Volume 513: debated on Wednesday 14 July 2010

1. What recent discussions he has had with trade union representatives on reform of the civil service compensation scheme. (8067)

I wrote to the chairman of the Council of Civil Service Unions immediately after making my statement to the House on 6 July. I have invited the unions to begin discussions with us on developing a sustainable and affordable long-term successor to the current civil service compensation scheme. I met the unions yesterday, and my officials have had further meetings with them.

I thank the Minister for that answer. As he will appreciate, thousands of civil servants currently face losing their jobs as a result of this Government’s policies. Will such people be able to rely on their contractual terms?

It is common ground that the current civil service compensation scheme is unaffordable. The hon. Lady’s own Government attempted to introduce a new scheme that introduced modest changes to the current scheme. That was agreed by five out of the six civil service unions, but sadly, the sixth did not agree, went to the High Court, and had it struck down. The result is that savings that had been scheduled to be made by the previous Government now cannot be made, so there is an additional cost. I have taken the view that it is not responsible to leave matters as they are. Nor is it fair to leave in limbo for ever people who know that there is, through no fault of their own, no job for them for the future, which has been the case for some time.

Does the Minister accept that any plans severely to restrict redundancy payments for hundreds of thousands of low-paid civil servants will be seen as a kick in the teeth for thousands of workers who have faced uncertainty about their jobs over the past few years, and who face uncertainty in the future?

It is precisely for that reason that I want to engage quickly with the unions to negotiate additional protection for low-paid workers. Contrary to general belief, large numbers of civil servants are not very well paid—half of them earn £21,000 a year or less—and we want there to be extra protection for them. I want to engage as quickly as possible with the unions to negotiate an arrangement that has not only fairness but accountability built into it.

Last week, the Minister said that his proposals may not have been necessary if the Public and Commercial Services Union had joined the other five trade unions in agreeing to the previous Government’s reform package. That being so, will he start his negotiations with that package, which would have saved £500 million over three years and protected the lowest paid?

As I say, we are very keen to have proper protection for the lowest-paid workers. Had that scheme been in existence when the coalition Government came into office, a pressing case would have been made to leave it as it was and work on that basis. That option is no longer on the table, so it seemed to us right to look at a scheme that is sustainable for the long term. The previous revised scheme made only relatively modest changes, and it was still way out of kilter with anything available under the statutory redundancy scheme or, indeed, throughout most of the private sector.

I am grateful for that answer. However, it is hard to take the Minister seriously about these negotiations when after all the press speculation, and more than a week after he sent his letter to the trade unions, the 600,000 staff who are affected still have no details of what he is proposing other than the threat of a 12-month cap on redundancy payments to all staff. Why should the lowest-paid staff—the junior official in a jobcentre—be treated in exactly the same way as the permanent secretary of a Government Department?

It is precisely my intention that that should not be the case. That is why I want to engage with the unions quickly to develop a scheme that protects the lowest paid. It is quite a complicated thing to do—it is not capable of being done in the course of a Bill—so we need to negotiate it. I want to ensure that it works and is effective in providing fairness, but is also affordable. I hope that we can engage with this as soon as possible. I have made it clear to the unions that it is our intention not only to negotiate on the ceiling that is available for voluntary redundancy schemes but to provide protection for the lower paid.