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Civil Service Compensation Scheme

Part of the debate – in Westminster Hall at 4:30 pm on 19th March 2019.

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Photo of Chris Stephens Chris Stephens Shadow SNP Spokesperson (Fair Work and Employment) 4:30 pm, 19th March 2019

I beg to move,

That this House
has considered the civil service compensation scheme.

It is a pleasure to serve under your chairmanship, Ms Buck. I refer to my entry in the Register of Members’ Financial Interests—I chair the Public and Commercial Services Union parliamentary group. I want to raise the important matter of the civil service compensation scheme, and will first outline how we have got to the present situation.

It would be fair to say that the civil service compensation scheme has had a troubled recent history. Having run smoothly and been untouched for decades, since 2010 it has been the subject of much change, acrimony and litigation, leading to three judicial reviews. The first judicial review was in 2010, when the then Labour Government introduced changes to the scheme that would cut the redundancy terms of civil servants. PCS launched a legal challenge to those changes, and on 10 May 2010 the High Court ruled that the judicial review had succeeded and that amendments to the civil service compensation scheme were to be quashed. In essence, Mr Justice Sales concluded that the Superannuation Act 1972 provided that the agreement of PCS was required in order for any changes to proceed. The Court quashed the changes because they had not been agreed by the union.

There was a further judicial review in 2011, when the Conservative-Liberal Democrat coalition established primary legislative changes to implement cuts to the civil service compensation scheme. The legislation was amended to the effect that the obligation to reach an agreement with the union on any changes was replaced with an obligation to consult with a view to reaching agreement. The proposals were agreed by the FDA, GMB and Prospect trade unions, but they were rejected by PCS, the Prison Officers Association and Unite the union.

At the time there was another legal challenge by way of judicial review. The primary grounds for the challenge were that the changes to the civil service compensation scheme constituted unlawful interference contrary to the rights of civil servants under article 1 of protocol 1 of the European convention for the protection of human rights and fundamental freedoms. In essence, the argument was that civil service compensation scheme terms were its members’ possessions and that depriving them could not be justified. Mr Justice McCombe ruled that the scheme terms did constitute possessions under the convention, but that the state could interfere with them within a margin of appreciation. The Government cited deficit reduction as the reason for the changes, so the Court ruled that the interference was reasonable and the judicial review application was dismissed.

At that time, the coalition Government made some commitments. The then Minister for the Cabinet Office, Francis Maude, said that

“constructive negotiations with the unions can work and the result is a package that is fair for civil servants and fair for other taxpayers.”

He went on to say:

“From the start, we said we would do everything we could to engage with the unions on the best way to reform a scheme, which was unaffordable and way out of line with private sector and…public sector schemes.”