HANSARD
Judicial Pensions and Fee-Paid Judges’ Pension Schemes (Amendment) Regulations 2019
- Motion to Approve
- 4:53 pm
- Moved by
- That the draft Regulations laid before the House on 7 January be approved.
- My Lords, the draft regulations before us today were laid on 7 January under the affirmative resolution procedure and relate to the contribution rates for members of two judicial pension schemes. The purpose of these draft regulations is to make provision to extend the current member contribution rates and earning thresholds in two different pension schemes until the next financial year. The two schemes are: the judicial pension scheme 2015, which was established by the Judicial Pensions Regulations 2015 following wider public service pension reforms; and the fee-paid judicial pension scheme 2017, which was established by the Judicial Pensions (Fee-Paid Judges) Regulations 2017, following the Supreme Court decision in 2013 in the case of O’Brien, and related court decisions.The reason for extending the existing rates is that the current provision for member contribution rates will expire on 31 March 2019. Therefore, the draft regulations are needed to make an amendment to specify the member contribution rates which will apply for the next year: for the period from 1 April 2019 to 31 March 2020. The regulations will enable us to ensure the continuing operation of the schemes by deducting the appropriate member contributions for that year. Given that we propose to continue the same rates under the regulations, this amendment simply maintains the existing provision for a further year. This interim measure is required pending the completion of a broader process, which relates to the valuation of the judicial pension schemes. This process has been ongoing for a period of time, and the outcome of the valuation is yet to be determined.Having referred to a link between the regulations and the broader valuations process, I should like to provide some brief background with regard to that matter. Following the reform of public service pension schemes in 2015, and as reflected in the current legislative framework, government departments are required to undertake valuations of their respective public service pension schemes every four years. This includes the Ministry of Justice in respect of the judicial pension schemes. The valuations of public service pension schemes do two things. One is to measure the cost of providing pension benefits to members of the schemes; and the second is to inform the future contribution rates paid into the schemes, by both the employer and members of the scheme.Work has been under way on the first such valuations of public service pension schemes, and part of the initial stage is to analyse the provisional results produced for each respective scheme—which, as I mentioned, includes the judicial pension schemes. However, the current position is that the Government have recently announced a decision to pause part of the valuations of public service pension schemes. This is because the Government are seeking permission to appeal the Court of Appeal decision in the case of McCloud. Therefore, pausing the valuations is considered a prudent approach at this stage.
- 5:00 pm
- My Lords, I am grateful to the Minister for his careful exposition of the scheme and for the quotations from the report, which the Lord Chancellor made to Parliament, detailing the consultation. We cannot consider this interim proposal—this carry-over proposal—without reflecting that it is part of a complex situation with judicial pensions which causes a great deal of anxiety. Whenever you inquire of those involved in carrying out recruitment to the judiciary or of those who are applying, a number of issues are mentioned, such as the state of the court estate, but pensions come up every time, because of the bizarre and convoluted nature of the system which has resulted from the changes that have been described. The changes produce really bizarre situations where relatively junior members of the Bench find themselves with greater entitlements than those who have served for a number of years. One of the results of this is a deterrence to recruitment. In some cases, there is an incentive for retirement because some are better off retiring than remaining in the scheme.In extending the present contribution rate for the next year, a number of things have to happen, including litigation. One can only express the hope that pensions cease to be a disincentive to recruitment, because the recruitment problems of the judiciary affect the ability of citizens of this country to obtain timely justice—quality is maintained, but timeliness can become a problem. They also affect the substantial export earnings of our courts and of the legal services which surround them. They are therefore pretty important. As I said, you cannot get into any discussion about judicial recruitment without the pensions issue arising. It would be good if the Government could sort that out.
- My Lords, is it correct, from my scanning of the web as to what the dispute before the Court of Appeal, to which the noble and learned Lord referred, is about, that the taxpayer could potentially face a bill of upwards of £750 million if this case is lost? It seems to me to be an extremely high figure. I assume it is a calculation to do with the massive additions to pensions that would be required if all judges got the transitional relief which, at the moment, is only going to be afforded to a small proportion.My second question makes an obvious point for somebody who is not a lawyer or a judge. Am I right in assuming that the judges who will sit on this case are adjudicating on their own pensions? In no other walk of life would that be considered a satisfactory arrangement. Will the noble and learned Lord tell us whether that is the case? If it is the case, what is the protection against judges simply, to be blunt, ruling in their own self-interest?
- My Lords, before my noble and learned friend answers that difficult question, I wonder whether he can help the House on a general question about judicial pensions and eligibility. Judges must now retire at the age of 70; there is strong feeling abroad that this often wastes judicial talent. In other fields, people often peak at 70 so a retirement age of 75 may be far more suitable, given that the same retirement age applies to magistrates, jurors and other people given the task of determining matters of justice.
- My Lords, in a crowded and noisy political landscape, it is easy to overlook the importance of protecting our judiciary and making adequate pensions provisions for our people. Forgive me for suggesting this, but this House is perhaps uniquely qualified to value the importance of both.I begin by politely disagreeing with the concerns expressed by my noble friend Lord Adonis a moment ago. I have no concerns about the Supreme Court’s ability to deal with any disputes relating to judicial pensions. Of course, the Opposition do not seek to divide the House on the interim provision set out by the Minister but I want to take this opportunity to urge him not to kick the can down the road into next year and beyond. It is concerning that the Government have recently had a number of disputes of this kind with judges, including the defeat referred to earlier. I agree with a number of the points made by the noble Lord, Lord Beith, about the importance of a confident and, frankly, happy judiciary to which we can adequately recruit to protect our reputation as a rule-of-law nation, whether we are inside or outside the EU. We need to boost our judiciary’s morale now and for some years to come.I agree with the one-year extension of this scheme but concerns over judicial pensions need to be considered in the broader context of the austerity measures that hit the Ministry of Justice particularly hard, including budget cuts of a third since 2010. Savings made in the revised pensions schemes are just one area where spending has been seriously squeezed. Devastating reductions to the court estate, further proposals for the relocation of case management functions, listings and scheduling, new off-site service centres and service centres supervised by authorised staff, not judges, are some of the issues we discussed last year in the context of the then courts and tribunals Bill.We on these Benches are concerned about the judgment to which the Minister referred. A finding against the Government relating to unlawful age discrimination is very concerning. Going forward, I urge the Government, in as friendly a manner as possible, to consider the acute shortage of High Court judges. As I imagine many people in the Chamber will be aware, senior lawyers and practitioners are not putting themselves forward for High Court appointment—including some highly qualified people who would be keen to complete their prestigious careers in what is a vital public service in this country. Too many positions have been left vacant for years with the very slight prospect of them being filled in the next few years. Time and again one hears that this recruitment crisis is in no small way affected by the change in judicial pensions.
- Lord Judge (CB)My Lords, I had not intended to speak but perhaps I should. I declare an interest as having been Lord Chief Justice when the shocking new arrangements for the judicial pension were imposed on the judiciary unilaterally by the Government. There was consultation—of the kind that enables the Government to do exactly what they like—but it was imposed on the judiciary. There was a unilateral change to the pension arrangements under which a significant proportion of the judiciary were working if they were below a certain age and had not given so many years’ service. The basis on which they joined the judiciary, which was clearly understood, was changed. That represented a betrayal. It greatly damaged confidence in the whole idea of a successful practitioner—a barrister or solicitor—seeking judicial appointment. If the Government could unilaterally change the arrangements, there was no point. We still suffer the consequences of that. There is nothing wrong with the present measure we are considering, but the consequences of what happened between 2010 and 2014 are with us still.If I may answer the point made by the noble Lord, Lord Adonis, about the arrangements that are currently before and have been before the courts, the judges trying those cases are not those who will have been affected by these dramatic changes. The various matters raised by the noble Lord, Lord Beith, and the noble Baroness, Lady Chakrabarti, are well known. There is no point using this opportunity to stand on a hobby-horse to repeat them, but they do not go away. That is an issue the ministry has to grapple with as soon as practicable.
- My Lords, I am obliged for the contributions that have been made. I note the points made by the noble Lord, Lord Beith, and the noble and learned Lord, Lord Judge, and I acknowledge that pension issues have created very real issues about recruitment, particularly to the High Court Bench. That is something of which we are conscious and have in mind and under consideration going forward. The whole question of the terms and conditions on which we seek to appoint the judiciary is critical, and I acknowledge the need to ensure that we maintain a judiciary whose expertise and integrity are regarded as pre-eminent. The noble Lord, Lord Beith, touched on the value—if you can put it that way—of legal services in an export sense. It is estimated to be in the region of £4.5 billion, so it is a significant matter in that context alone; but of course, it has a much wider resonance and importance than that.As the noble and learned Lord, Lord Judge, observed, those hearing this matter in the Supreme Court are not impacted by the transitional provisions we are concerned with in the McCloud case and the related Miller case, which is still to be heard. In any event, I remind the noble Lord, Lord Adonis, of the judicial oath and the confidence maintained in the integrity of our judiciary, which is entirely justified.Regarding the potential cost of the McCloud decision, it is a matter of speculation. It does not refer just to judicial pensions; it is also relevant to firefighters.
- My Lords, I am an avid reader of the Law Society Gazette, which says that £750 million has been provided for in the department’s own accounts as an insurance against the loss of this case. Is that correct?
- I am not in a position to comment on that figure, but if the noble Lord is concerned about it, I will write to him after seeing what the position is in the accounts, as I do not have them to hand.The issue of the age of retirement has been debated, and we are conscious of it. Many noble and learned Lords who find themselves retired from the Bench are able to make a convincing contribution to the affairs of this House for many years after their retirement, and it seems in one sense unfortunate that we cannot harness that expertise on the Bench as well as off it.This is a purely interim measure, pending the final valuation which will follow the decision in McCloud, and we will therefore be taking forward the question of contributions as soon as that valuation process is completed. There is a wider interest—expressed, for example by the noble Lord, Lord Beith—in the whole question of these pension reforms, and it is underlined by the points made by the noble and learned Lord, Lord Judge. We have a scheme, we are implementing it and taking it forward, but this is an interim measure to maintain contributions, not to increase them.Motion agreed.