My Lords, I thank the noble Viscount, Lord Younger, for introducing the Bill. I think I am right in saying that both he and I are laymen on this subject in that we are not lawyers or pension experts.
On the public sector pensions, clearly there is a problem which needs to be addressed following the findings of the McCloud ruling. I note that the Supreme Court denied the Government leave to appeal the finding. The Public Accounts Committee has called the Government’s problem a
“£17 billion mistake on pensions reform”.
I recognise that the remedy the Government have opted for, to be included in this Bill—the deferred choice underpin, the DCU—was preferred by a significant majority of respondents to the government consultation, including main trade unions such as UNISON and GMB. The DCU remedy would give people the choice at retirement as to how their pension should be calculated during the period 2015 to 2022. What measures will be in place to ensure that individuals affected will have the information they need at the point of retirement to make an informed decision? This important question was put by the noble Baroness, Lady Janke, and repeated by the noble Baroness, Lady Kramer, and it deserves an answer.
I believe there is a lack of clarity about who will bear the costs of these measures. The noble Baroness, Lady Janke, quoted from the Public Accounts Committee, which has also raised this point about who will bear the costs. Can the Minister explain how these costs will be met, and what impact this will have on future public spending decisions?
Before I move on to the cost control mechanism, I should say how grateful I am for the expertise demonstrated by my noble friend Lord Davies. I also found it particularly interesting that my noble friend Lord Hendy spoke of the context of the police in these proposed changes and how that is impacted within international law. My third noble friend, the noble Lord, Lord Mackenzie, also gave a very interesting and quite alarming explanation of the treatment of the police force regarding these proposed pension changes.
As far as I understand it, there are two problems: the original design of the CCM made it too volatile and the McCloud judgment has created a significant uncertainty, which members have now been living with for more than two years. The Government ran a consultation on the CCM mechanism, which closed on 19 August. When does the Minister anticipate that they will be able to respond to this consultation? Is he in a position to express any view on the key views expressed to the Government in that consultation process?
Clause 80 provides that the breach of the cost cap ceiling in the 2016 valuation will be waived. Trade unions are concerned about where the cost of that waiver will eventually fall and the impact of the McCloud remedy
on the 2016 valuation. The impact of the valuation, when we get it, was a point raised by my noble friend Lord Davies and the noble Baroness, Lady Kramer. Separately, can the Minister confirm the Government’s commitment that any benefits improvements due to the breach of the cost floor will be honoured, and further—this was also a point made by my noble friend Lord Davies—that the increased use of Treasury directions for matters that should be subject to parliamentary scrutiny should be at a minimum, because Parliament should be involved as the CCM evolves? Clearly, we will want to scrutinise these things carefully as the Bill proceeds.
I turn to the proposed changes to the judicial retirement age, and here I declare an interest as a serving magistrate. We know that the existing provisions have been in place for 27 years, and we have had a great deal of personal expertise from the noble and learned Lords who have contributed to today’s debate. I will put forward a different view from the one proposed; it is more in line with the views expressed by the noble and learned Lord, Lord Etherton.
In the consultation, the overwhelming number of respondents—some 84%—supported raising the mandatory age of retirement. However, a large body of respondents preferred the age of 72 rather than 75. The people who preferred 72 were the Lord Chief Justice of England and Wales, the Lord Chief Justice of Northern Ireland, the President of the Supreme Court, the Lord President in Scotland, the Magistrates’ Leadership Executive, the Chief Coroner of England and Wales, and the President of Tribunals. All these individuals and bodies favoured 72, not 75. There are debates on this, but it is worth exploring a couple of the reasons why 72 is preferable to 75. Diversity is an important issue; I agree with the points made by the noble Baroness, Lady Kramer, on that. I also agree with her point about the importance of consultation. I do not know whether the Minister can say anything about whether members of the black community have been consulted on these proposed changes; they are liable to disadvantage their prospects for promotion within the judiciary.
I also want to raise a different subject, and here I speak as somebody who appraises magistrates. There are occasions when a small number of people—judges—may experience some level of mental decline. Clearly, there is an appraisal system for trying to deal with this, but it is a sensitive issue. I have probably appraised getting on for hundreds of magistrates over the last few years. One has to be frank: the prospect of mental decline accelerates over the age of 70. There needs to be a mechanism for sensitively dealing with these issues. That also argues in favour of a retirement age of 72 rather than 75, so that these issues of mental decline are not exacerbated.
We in the opposition party support the Bill. We will work constructively with the Government to look at the detail of it, and we wish it well.
8.05 pm