Wednesday 30 January 2019
Public Service Pensions
The Government are announcing a pause to one element of the valuations of public service pensions, following a Court ruling on part of the 2015 pension reforms.
The coalition Government introduced reforms to public sector pensions, meaning most public sector workers were moved to new pension schemes in 2015.
In December 2018, the Court of Appeal ruled that the “transitional protection” offered to some members as part of the reforms amounts to unlawful discrimination. The Government are seeking permission to appeal this decision. If this is unsuccessful, the Court will require steps to be taken to compensate employees who were transferred to the new schemes.
A mechanism for assessing the value of pensions (the “cost control mechanism”) was also introduced as part of the 2015 reforms. In September of last year, the Government announced that provisional results indicated that the cost control mechanism would be engaged, triggering automatic changes to member benefits.
However, given the potentially significant but uncertain impact of the Court of Appeal judgment, it is not now possible to assess the value of the current public service pension arrangements with any certainty. The provisional estimate is that the potential impact of the judgment could cost the equivalent of around £4 billion per annum. It is therefore prudent to pause this part of the valuations until there is certainty about the value of pensions to employees from April 2015 onwards.
The value of public service pensions will not be reduced as a result of this suspension. If the Government are successful in court, we will implement the changes to employee benefits as planned. If the Government are defeated, employees will be compensated in a way that satisfies the judgment.
In order to ensure employers are meeting the increased costs of providing pensions, the part of the valuations of the unfunded pension schemes which sets employer contributions (which existed before the 2015 reforms) will continue. Employers in unfunded schemes have been planning for these changes in employer contributions to be implemented in April 2019, and the Treasury is in the process of allocating funding to Departments to help with these costs.
Whatever the Court outcome, we know the costs of providing public sector pensions are increasing. The 2015 reforms were to ensure public service pensions are affordable and sustainable in the long term, maintaining intergenerational fairness and ensuring the burden on the working population remains proportionate.
Afghanistan: Locally Employed Staff
I am responsible for overseeing and assuring the delivery of the ex-gratia redundancy scheme and intimidation policy, in support of former Afghan locally employed staff (LES), on behalf of the interested Government Departments.
All former staff have now selected their redundancy option, provisioned through the ex-gratia scheme. Some 200 former staff chose the finance option, and around 150 former staff are in education having selected our five-year training offer; 18 people began their training in 2018, while the first cohort are due to complete their five-year package by mid-2019. Within the training package, the Government have also provided additional resources to support in their studies scholars with disabilities. The Government are proud to have assisted these men and women in achieving their potential and ensuring they, their families and their country have a brighter future with improved employment prospects.
In June 2018 the Secretary of State for Defence, my right hon. Friend the Member for South Staffordshire (Gavin Williamson) announced an amendment to the relocation offer of the ex-gratia scheme; this changed the eligibility date from 19 December 2012 to 1 May 2006. All other criteria remain the same, namely that the former LES must have been directly employed by the UK Government, have worked for 12 months continuously outside the wire on the front line in Helmand province and have been made redundant. Following the announcement, Ministry of Defence (MOD) officials are on target to complete a review of approximately 4,500 personnel files to assess each individual’s eligibility under the amended criteria; this task will be completed by Easter 2019. In addition, officials have received enquiries from over 440 callers regarding the amended criteria; 95% of these callers have been informed of the outcome of their enquiry with officials seeking clarification and further evidence for the remainder.
The scheme has relocated 437 former staff and their families, a total of 1,279 individuals, to the UK, and we expect around 10 families to relocate this year; this does not include those who might now be eligible under the amended eligibility criteria announced in June 2018.
Last year a review was initiated into the ex-gratia compensation payments made to 12 individuals for injuries they sustained while working with UK forces. They had each subsequently decided to relocate to the UK through the ex-gratia scheme and the review sought to uplift their original payment made while residing in Afghanistan to reflect the economic conditions of life in the UK. Thus far the review has resulted in payments totalling £3.35 million to support these brave people, some of whom sustained profoundly life changing injuries. Our hope is this money will improve their quality of life and support them and their families to build their life in the UK.
Our intimidation policy continues to support all former staff who experience intimidation within Afghanistan as a result of their employment with the UK. This policy is delivered by an expert team based in Kabul, including a member of either the Home Office Constabulary or MOD Police to investigate the claims. To date this dedicated team have assisted over 530 staff by providing bespoke security advice and, where applicable, funding relocations to safe areas within Afghanistan. It remains the case that the level of intimidation faced has not so far been such that an individual has had to be relocated to the UK in order to ensure their safety. However, the changing security position in Afghanistan is kept under careful review. The UK remains the only nation to have established an in-country specialist investigation unit to address concerns of intimidation.
I chair the cross-Government locally employed civilian assurance committee, which has continued to scrutinise the application of the intimidation policy to ensure that it is effectively administered and that former Afghan staff who feel threatened owing to their employment by the UK are properly supported. Committee members include peers from the House of Lords (the former Chief of Defence Staff, Lord Stirrup, Baroness Coussins and the Bishop of Colchester), a suitably experienced Police detective, a former local staff member who relocated to the UK through the ex-gratia scheme and cross-Government representatives. The Committee met three times in 2018 and reviewed a total of 18 cases; in each case the Committee members felt the policy has been applied effectively. The Committee has continued to review the security situation in Afghanistan at each meeting, as it relates to the risk of intimidation and the viability of mitigation measures. No issues have so far been raised in this respect. The Committee also considered elements of the guidance that supports the in-country delivery of the intimidation policy and made recommendations to enhance the advice provided. Furthermore, a selection of closed intimidation cases were also independently assured by the Government Legal Service, who have continued to conduct regular reviews of closed intimidation cases to ensure that the decisions are robust; no significant issues were raised.
It is the Government’s belief that our ex-gratia redundancy scheme and intimidation policy remain fit for purpose and properly meet our responsibilities to men and women who played such an important part in our efforts to bring peace and security to Afghanistan.
Northern Ireland (Executive Formation and Exercise of Functions) Act 2018: Section 4 Report
This statement is issued in accordance with section 4 of the Northern Ireland (Executive Formation and Exercise of Functions) Act 2018 (“the Act”). Section 4 of the Act requires that I, as Secretary of State for Northern Ireland, report on a quarterly basis on guidance issued under that section of the Act, and report on how I plan to address the impact of the absence of Northern Ireland Ministers on human rights obligations within three months of the day the Act was passed.
The Act received Royal Assent on 1 November 2018. Following careful consideration of the sensitive issues section 4 deals with, and in consultation with the Northern Ireland civil service, guidance under section 4 was published on 17 December 2018.
The guidance notes that it does not, and cannot be used to, change the current law on abortion or same-sex marriage in Northern Ireland. Both issues remain devolved matters in Northern Ireland. The guidance provides that all relevant Northern Ireland departments should continue to have regard to all of their legal obligations, including the Human Rights Act 1998 and sections 24 and 75 of the Northern Ireland Act 1998, in exercising any relevant functions in relation to abortion and same-sex marriage.
I have consulted the head of the Northern Ireland civil service in the preparation of this report. He has reaffirmed the continuing commitment of the NICS to have regard to their legal obligations when exercising any relevant functions in relation to abortion and same-sex marriage.
I will keep the Government’s position on these sensitive devolved issues under review in light of the UK Government’s legal obligations, and in light of any relevant emerging legal judgments, as appropriate.
I believe, however, that the current absence of devolved Government in Northern Ireland should not dislodge the principle that it is for the devolved Administration to both legislate on, and ensure compliance with, human rights obligations in relation to such devolved matters.
Restoring the Executive remains my top priority and I am continuing to encourage the parties to come together to work towards restoring devolved Government. I am firmly of the view that the people of Northern Ireland need their elected representatives back in Government to take important decisions on the issues that matter most to them.