Police Pensions

– in Westminster Hall at 4:00 pm on 28 November 2012.

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Photo of Keith Vaz Keith Vaz Chair, Home Affairs Committee, Chair, Home Affairs Committee 4:00, 28 November 2012

Let me begin this important debate by paying tribute to the bravery and dedication of police officers across the United Kingdom. They do a unique job that is without parallel in the public sector. We are rightly proud that our police service is the best of the best. The Minister and I saw for ourselves very recently such acts of bravery when we attended the police bravery awards evening, organised by the Police Federation.

The whole country saw the danger that officers put themselves in every day to keep our community safe when two young unarmed and exceptionally courageous officers, Fiona Bone and Nicola Hughes, lost their lives in the line of duty. Thanks to the police and other stakeholders, there has been a 40% reduction in crime over the past 15 years. It was police officers who, along with the Army, were responsible for the safety and security of the magnificent Olympic games this summer after we were all let down by G4S. As we hold this debate in the warmth of Westminster Hall, police officers are out saving lives, helping people in towns and villages to escape the rising floodwaters.

As this is the first debate with the Minister since he has taken over his new portfolio, may I congratulate him on winning his asylum appeal and moving, after seven long years with the immigration brief, into policing? He must be missing the UK Border Agency terribly, but I can assure him that we will keep him very busy with policing issues.

I am also pleased to see so many right hon. and hon. Members from all parts of the House here today. They will forgive me if I take a limited number of interventions because time is short, but I promise that I will acknowledge their presence at the end of my speech.

The Government’s proposal to increase the pension age to 60 is wrong. The Winsor review found that the average age at which police officers currently retire is around 50 to 51. Some police officers may want to continue to serve and work beyond that age, but it is unfair and unjust to mandate them to serve until the age of 60.

Photo of Elfyn Llwyd Elfyn Llwyd Shadow PC Spokesperson (Wales), Plaid Cymru Westminster Leader, Shadow PC Spokesperson (Constitution), Shadow PC Spokesperson (Foreign Affairs), Shadow PC Spokesperson (Home Affairs), Shadow PC Spokesperson (Justice), Shadow PC Spokesperson (Defence), Shadow PC Spokesperson (Environment, Food and Rural Affairs)

I thank the right hon. Gentleman for giving way and congratulate him on securing this important debate. May I make two brief points? First, is it not distasteful to change a contract of employment halfway through and, secondly, given the special nature of the work that these brave men and women do, should we not be careful about expecting them to defend us on the streets at the age of 60 plus?

Photo of Keith Vaz Keith Vaz Chair, Home Affairs Committee, Chair, Home Affairs Committee

I have a quick answer to both questions, which is yes and yes, and I cover them both in my speech. If we expect police officers to stay on until the age of 60, it is a matter of fact that some will find their roles harder as they become older, as people like me know. Those officers will have to be relocated to back-office positions, which are precisely the functions that the Government are urging forces to cut while maintaining front-line numbers. The consequence of these proposals for police officers and forces will be seriously damaging.

Photo of Andy Sawford Andy Sawford Labour, Corby

I thank my right hon. Friend for allowing me to intervene and for the time he spent with me recently meeting people in Corby. He will know that this is an issue not just for police officers and their families, but for all of us who want to show our hard-working police officers that they are valued. Does he agree that, at a time when there are 20% policing cuts and, now, a steep rise in pension age, morale in the police force is really being undermined, and we must not let that happen?

Photo of Keith Vaz Keith Vaz Chair, Home Affairs Committee, Chair, Home Affairs Committee

I agree with my hon. Friend. May I welcome him most warmly to the House and congratulate him on his election? I will be turning to police morale later in my speech, but he is right—it is a crucial issue in respect of these proposals.

Sitting suspended for a Division in the House.

On resuming

Photo of Keith Vaz Keith Vaz Chair, Home Affairs Committee, Chair, Home Affairs Committee 4:16, 28 November 2012

Among the Government’s proposals are changes to the contribution rate. At the moment, a contribution rate of 10.5% of gross pay secures a contribution with a value of 24.2%. Under the proposed changes, a much higher contribution rate of 13.7% of gross pay will secure a contribution with a value of just 14.3%.

Police officers have told me that the proposed rate of 13.7% is simply too high and is not even-handed when compared with other public service workers. In fact, the rate is so high that there is a significant risk of opt-outs, including by new recruits who will not be able to afford to join the pension scheme. The Winsor review, upon which these proposals are based, also proposed lower starting rates of pay. Taken together, the two elements will have a devastating effect on recruitment. In addition, current pension contribution rates are already increasing. They increased in April and future increases are expected in 2013-14 and 2014-15, to meet Lord Hutton’s recommendations of an average contribution increase of 3.2%, which effectively means a 3% pay cut for officers.

Every single police officer in the 134,000-strong force will be affected by these changes. I have spoken to many officers, both in my constituency and here at Westminster, who are extremely anxious about them. When this debate was announced, I asked officers to contact me with their stories. I expected one or two to reply. In just seven days, I have received upwards of 120 e-mails, phone calls and letters from concerned officers across the country. Not one of them agrees with what the Government have suggested.

Photo of Anne Main Anne Main Conservative, St Albans

I thank the right hon. Gentleman for giving way, because I know that this is a very short debate. My police officers have shared similar views with me, but a particular issue that has been raised is the disproportionate effect of these proposals on women police officers—the right hon. Gentleman named two brave women police officers earlier—who have had career breaks, and on coming back they will find that, under the new system, the years they have served will not add up to the pension that they would have hoped for when they started in the police.

Photo of Keith Vaz Keith Vaz Chair, Home Affairs Committee, Chair, Home Affairs Committee

The hon. Lady is absolutely right and she is also right to raise the specific issue of women police officers, which has not been raised in the debate so far. I agree with what she said.

Apart from all those representations that I have received, the e-petition for a debate on this issue was started by Sergeant Nigel Tompsett of the Suffolk force, and it now has more than 100,000 signatures. This debate today in Westminster Hall is not an alternative to a debate on the Floor of the House on this issue; I hope that it is a curtain-raiser for such a debate.

The pension reforms need to be seen in context. They are part of a wider picture of sweeping reforms to the landscape of policing. In comes the National Crime Agency and out goes the Serious Organised Crime Agency; in comes the college of policing and out go the police authorities; and then in come 41 newly elected police and crime commissioners as well. Those are, in my view, the most significant changes to be undertaken since Sir Robert Peel laid the foundations for modern policing nearly two centuries ago. At this moment of seismic change, it is clearly wrong to destabilise the very people we expect to implement the changes.

Morale in the police force, as we have heard, is at an all-time low. The Metropolitan Police Commissioner, Bernard Hogan-Howe, told the Home Affairs Committee yesterday that this was a very difficult time for many in the service. His predecessor, Lord Stevens, through a survey of 14,000 officers and superintendents conducted by the London School of Economics, found that 95% of police officers do not feel that they have the support of the Government, and that 56% of those surveyed had recently contemplated leaving the force. It is because of measures such as these that officers who risk their lives for our communities feel short-changed and undervalued. The proposals will drive gifted and experienced officers out of the service.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Constitutional Reform), Shadow SNP Spokesperson (Scotland)

The right hon. Gentleman is very kind. Does he agree with the Scottish Police Federation, which feels that control over the pensions of police in Scotland should be given to the Scottish Government, rather than be under the control of Westminster? The police in Scotland fully fund their own pension anyway.

Photo of Keith Vaz Keith Vaz Chair, Home Affairs Committee, Chair, Home Affairs Committee

I have not spoken to any Scottish officers and none have made such representations to me, but the Minister has heard what the hon. Gentleman said and I am certainly happy to talk to them after the debate.

We have to recognise the unique role, responsibilities and restrictions that apply to police officers. Each sworn constable is an independent legal official, not an employee. Police officers are required to deploy force, put themselves in the way of harm and make discretionary ethical judgments. Failing to carry out their duties, whether on or off duty, leaves officers open to the charge of misconduct in public office. As Nathan McLean, a police officer in Greater Manchester, put it to me:

“Each day when I go to work I understand that I may not return—yet I, like thousands of other police officers across the country, wear the uniform with pride and just get on with it in order to protect the public.”

Regulations provide for restrictions on the private lives of police officers, and despite being faced with the most wide-ranging reforms to pay and conditions in 30 years, police officers, unlike other professionals, do not have the right to strike or take industrial action. Police officers joined the force, and accepted these unique restrictions and limitations, on the understanding that they would be fairly provided for in retirement.

All those who represent our police service need to be consulted on the changes, and listened to very carefully. We are fortunate in this country to have robust representative organisations in the form of the Police Federation, led by Paul McKeever, and the Police Superintendents Organisation, led by Derek Barnett, along with people of outstanding ability, such as Sir Hugh Orde, president of the Association of Chief Police Officers, and the recently retired chief inspector of constabulary, Sir Denis O’Connor. I urge the Minister to ask them questions, to talk to them, to listen to them and to act on their advice.

Before I conclude, I would like to leave the House with some of the individual concerns of ordinary policemen and women who have contacted me. PC Gareth Spargo of South Wales police said:

“I increased my mortgage to pay for treatment so my wife and I could have children. Now my pay has been frozen for 2 years and I am paying an extra £100 a month in contributions....I love being a police officer and I joined in the knowledge that I was never going to be a rich man. I did however expect the terms that I joined under to remain constant for the duration of my service”.

PC Jason Ford told me:

“I have been spat at, punched, kicked, beaten with a wooden bat, been confronted with knives, swords and guns...my police pension has kept me going through some very difficult times, it is a little bit of light at the end of a very long tunnel”.

PC Matthew Ransom, of Kent police, contacted me to say:

“My mortgage was to be paid off in the last month in the job, leaving my lump sum to be used for university fees, or assistance in getting my boys on the property ladder. I cannot do those things now I have to do another 10 years’ service, contributing more and receiving the same or less in pension. How can this be fair?”

In addition, PC Turnbull from Bolton has made representations to my hon. Friend Yasmin Qureshi.

In conclusion, I want to acknowledge the colleagues who have come here today to participate in the debate. They include the hon. Members for Hexham (Guy Opperman) and for St Albans (Mrs Main). We have heard from the leader of the Welsh nationalist party, Mr Llwyd, and from my hon. Friend Andy Sawford. My hon. Friend Dan Jarvis is here, as are my hon. Friends the Members for Bolton South East and for Ynys Môn (Albert Owen), the hon. Members for Worcester (Mr Walker) and for Falkirk (Eric Joyce), my hon. Friends the Members for Hayes and Harlington (John McDonnell) and for Oldham East and Saddleworth

(Debbie Abrahams), Mr Jones, my own Member of Parliament Dr Offord, Jake Berry, my hon. Friend Angela Smith, Dr Lewis and my hon. Friend Mr Cunningham. If I have left anyone out I am sorry. I did leave out the two Parliamentary Private Secretaries because I did not know which side they were on and I would not want to drag them into my side of the argument. And, of course, there is the Scottish nationalist Member, whose constituency I cannot pronounce, who also spoke.

These are, of course, times of austerity, and the police are not the only organisation being asked to deliver more for less, but the reforms are wholly disproportionate. There is an alternative lower contribution rate within the Government’s 28% cost ceiling but, very disappointingly, it was rejected not by the Home Office but by the Treasury. I ask the Minister to reconsider that decision.

Finally, the Government must honour the existing pension arrangements of serving police officers, under section 2 of the Police Pensions Act 1976, and any new pension scheme should be applicable only to those who join for the first time. It is time for action to back up the words of praise we lavish on the police service whenever our communities are under threat. We need to act now and change the proposals before it is too late.

Photo of Damian Green Damian Green Minister of State (Ministry of Justice and Home Office) , The Minister for Policing and Criminal Justice 4:26, 28 November 2012

I thank Keith Vaz for initiating the debate and for the kind remarks he made about me at the start of his speech. I can confirm that I am already nostalgic for the UK Border Agency. I entirely echo his remarks about the tremendous service that police officers give to their communities and the whole country. As he said, he and I attended the police bravery awards a few weeks ago. It was the first time I had attended, and I was struck dumb by the courage and heroism shown by all the winners. Even more importantly, I know from my own experience as a constituency MP, as well as from other experiences I have had as Police Minister, how that kind of service is provided on a daily basis across the country.

This afternoon, I would like to clarify the Government’s approach to public service pension reform as a whole, as well as what it means for police officers. As the right hon. Gentleman acknowledged, these are difficult economic times and we have to take difficult decisions, but we have equally made it clear that we are committed to reaching a fair outcome for police officers, and I hope to explain why I believe that that has been achieved. In the course of his speech, the right hon. Gentleman enjoined me to listen to the comments made by a number of organisations.

I should start by reminding the House of the context for pension reform. From the outset, we have been candid about the need for a fundamental review of public service pensions and of how they are funded and maintained. That is why my right hon. Friend the Chancellor invited Lord Hutton to chair the independent public service pensions commission. As a member of the previous Government and a former Secretary of State for Work and Pensions, Lord Hutton was well placed to undertake an independent and comprehensive review. He did a thorough job and made a compelling case for change. As he set out in his findings, the costs of public service pensions have increased over recent years, mainly because people are living longer, and the increasing costs have fallen largely to the taxpayer.

The Government are committed to providing good occupational pensions for public servants, but we must do so in a way that is affordable, sustainable and fair both to those workers and other taxpayers. That means, across the public services, moving to the career-average pension model in place of final-salary schemes. That also involves increasing the contributions that workers pay for their own pensions and raising the retirement age. The Public Service Pensions Bill, which is currently before the House, sets out the high-level framework for those reforms, with work force and scheme-specific details to be implemented through regulations in due course.

To put all that in context, the latest figures from police forces show that, in the 2011-12 financial year, across England and Wales more than £2.8 billion was paid out in police pensions. Such pensions are paid to retired officers who have a legal entitlement to receive them. I hope that gives Members a sense of the scale of the issues and finances involved.

The right hon. Gentleman raised a specific point about police pension contributions. It is true that police officers pay among the highest contributions in the public services. That is because the pension is significantly more valuable than most others, as it should be.

As part of his report, Lord Hutton commissioned a comparative analysis of the benefits that workers get out of pension schemes based on what they contribute themselves. He found that, aside from those in the armed forces, who do not contribute to their pensions, police pensions are more valuable than most, as they are generally drawn from an early age and paid for longer in retirement. That is even taking into account the relatively high contributions paid by police officers.

I was struck by the verdict of Police Mutual, an independent financial adviser that specialises in services for the police. Its assessment, in response to the increased contribution rate, states that

“the Police Pension Scheme remains one of the best financial investments you are ever likely to make.”

People should listen to Police Mutual, because it knows whereof it speaks.

While I am on that subject, I am happy to reassure my hon. Friend Mrs Main that the new scheme does not have a service requirement, so female officers will not be disadvantaged for taking career breaks.

Photo of Keith Vaz Keith Vaz Chair, Home Affairs Committee, Chair, Home Affairs Committee

I thank the Minister for bringing that information to the House’s attention. Police Mutual may have a vested interest, because it deals with such financial affairs and might benefit in some way. I do not know the organisation’s position, but the organisations that have spoken to us are clear that their members will be affected. The Minister is new to his position, and he is not responsible for this. He did not write the Winsor review. He has just become the Police Minister, and he has to work with the police for the two-and-a-half years at least that he has this job. Will he agree to meet the representatives—the Police Federation, the Police Superintendents Association, the Association of Chief Police Officers and others—again to discuss one more time the effects that the changes will have on their members? If he agrees to do that, he will get a better impression of what is going on.

Photo of Damian Green Damian Green Minister of State (Ministry of Justice and Home Office) , The Minister for Policing and Criminal Justice

I constantly meet not only police officers in my constituency who wish to discuss this but, as the right hon. Gentleman would expect, the fed and the supers. This item is clearly on that agenda, and I am happy to reassure him that I will continue to discuss it. I will come on to what the federation said in a second.

We have maintained throughout the process that police officers deserve to be treated with respect and even-handedness. We have worked hard with partners in policing to reach a fair outcome that recognises the particular nature of a police officer’s work. That is why we asked Tom Winsor to reflect on Lord Hutton’s findings and consider some of the issues in the context of his independent review.

Photo of Angus MacNeil Angus MacNeil Shadow SNP Spokesperson (Transport), Shadow SNP Spokesperson (Constitutional Reform), Shadow SNP Spokesperson (Scotland)

The Minister speaks about fairness and even-handedness, but does he agree that, to give fairness and even-handedness, full flexibility on pensions should be given to the Scottish Government, as the Scottish Police Federation wants?

Photo of Damian Green Damian Green Minister of State (Ministry of Justice and Home Office) , The Minister for Policing and Criminal Justice

I am not sure whether the hon. Gentleman is aware that the Scottish Government’s Cabinet Secretary for Finance, Employment and Sustainable Growth has this afternoon made a statement on his intention to take forward such issues in Scotland. I hope the hon. Gentleman will go away and reflect on what the Scottish Cabinet Secretary said.

Photo of Anne Main Anne Main Conservative, St Albans

The Minister was helpfully explaining why female police officers will not be disadvantaged, but female police officers have told me that the career-average scheme will disadvantage them, and I am concerned about that. Will the Minister explain that point a little more fully?

Photo of Damian Green Damian Green Minister of State (Ministry of Justice and Home Office) , The Minister for Policing and Criminal Justice

There is no service requirement, but we could discuss that for the rest of the time available. I would more than happily have that conversation with my hon. Friend offline.

Tom Winsor agreed with Lord Hutton that a normal pension age of 60 is appropriate for police officers. Given the findings of the two independent reviews, the Government believe there is a strong and coherent case for the framework, which will be in place from April 2015.

The Police Federation has been mentioned a lot, and having engaged in the process that followed those reviews, it confirmed that it accepts the outcome as the “best deal possible” for police officers in the context of the reform across public service pensions. Paul McKeever, chair of the Police Federation and the staff side of the Police Negotiating Board said, and I will quote him in full for balance:

“Despite being disappointed with aspects of this announcement, Staff Side accepts it within the context of the Government’s wider public service pensions reform agenda. It is clear from our discussions with the Home Office that, compared to the reference scheme offered by the Home Secretary of 27 March, this was the best deal possible to protect the unique position of police officers.”

The right hon. Member for Leicester East asked me to listen to the Police Federation, and I do in that regard.

The right hon. Gentleman also asked me to listen to ACPO. The ACPO lead for reward and recognition, Chief Constable Simon Ash, said:

“The changes to the Police Pension Regulations by the Home Office are broadly supported by ACPO, who have worked constructively with other stakeholders since March to ensure that the best possible balance is achieved for longer term reform whilst providing sufficient transitional arrangements.”

The degree of consensus is often under-recognised. The right hon. Gentleman set out the general picture, but nevertheless both ACPO and the Police Federation have accepted the proposal. There is much of the detail still to arrange for new pension arrangements to be in place for 2015. Obviously, we will maintain the dialogue to make those arrangements work.

The deal means that the normal pension age for police officers will be 60. Aside from the armed forces and firefighters, other public service workers will have a higher normal pension age linked to the state pension age, which is 65 rising over time to 68. That means that police officers will continue to retire earlier than most others, reflecting the nature of the work they do.

We have heard today that some officers are concerned about the prospect of working to 60, but the evidence shows that the average age of those joining the police in recent years is 26. The current open pension scheme—the 2006 scheme—has a 35-year accrual period, so many officers will already be working beyond 60 to accrue a full pension. I recognise that that is a genuine concern for some officers. The framework, therefore, includes flexibility for officers to retire from 55 with an immediate pension and an actuarial reduction linked to the normal pension age of 60.

The increased flexibility of the career-average model also means that there is no cap on the amount of benefits that can be accrued. Under current arrangements for police officers, benefits are capped after 30 or 35 years, depending on the pension scheme. Under the reform framework, there is no cap, so years worked beyond age 60 would provide an enhanced pension.

We are protecting accrued rights for police officers for pension built up by 2015, as we are for all public servants. Most police officers are members of the 1987 scheme, which is a complex scheme that includes uneven periods of pension accrual, so we have developed tailored arrangements to reflect that, thus honouring the Government’s commitment to protect accrued rights and to give police officers a fair outcome.

The Government also made a commitment to give transitional protection to those who were within 10 years of their current normal pension age on 1 April 2012. That applies across the public services, recognising that those nearest to retirement are likely to have least time to plan for that retirement. Again, the complex design of the 1987 scheme has led us to create specific arrangements. As there is no set pension age under that scheme, we have decided to give protection based on age and length of service. All officers aged 45 at 1 April 2012 will be able to remain in their current scheme rather than moving to the new pension arrangements in 2015. We are also giving protection to those who, at 1 April 2012, were within 10 years of retiring on a full police pension. That will give full protection to a further group of officers, including some who were as young as 38 or 39 at 1 April this year. On top of all that, there is also further tapered protection for those who were within four years of qualifying for full protection, in order to smooth the cliff-edge effect that often happens with pension reforms. That tapering again demonstrates, I hope, that the Government have entered into the process in good faith with a view to finding a fair outcome.

I am conscious that going through the details of pension reform does not make for great parliamentary rhetoric, but it is such a serious issue that detailing it is important. I appreciate as well as anyone the degree of understandable emotion caused by the issue, but the underlying point is that, under the new arrangements, the police pension deal is still one of the best deals on offer. I do not underestimate the level of concern among police officers about pension reform, and it is right that they should have clarity at the earliest opportunity about what it means. Many details of how the reforms will be implemented have still to be decided. I repeat the commitment that the right hon. Gentleman wished me to make: the Government will continue to work with our partners in policing on the issue, including specifically those who represent rank-and-file officers.

Throughout the discussions, we have been committed to reaching a fair outcome for police officers. We have done all that we can to achieve a fair pensions package for police officers that reflects the front-line nature of policing work and protects those closest to retirement. Police officers will continue to retire earlier than most public servants, and will continue to benefit from significant employer contributions on top of their own.

I am grateful to the Police Federation for making it clear that they encourage their members to remain in the scheme and will continue to do so after the proposed reforms. I hope that police officers will be reassured by that eminently sensible advice. It is difficult to envisage another investment that would provide the same guaranteed level of income—

Photo of Joe Benton Joe Benton Labour, Bootle

Order. We must move on to the next debate.