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Lord McCarthy: My Lords, we have had difficulty in finding a form of words acceptable in principle and practice and have tried a different one this time. The amendment would change "does not" to "shall", so that there is a general right for pensions to be included if a union wins a recognition claim. However, it would leave in place the rest of the clause, which enables the Secretary of State to modify, circumscribe or specify what that right would be in practice. That would seem to be in line with what the Government wanted in Committee, if we understood it correctly.
The Government have not come out and said, as they did in 1999, that pensions are insignificant and that workers do not want to negotiate about pensions.
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No, they admit it. They admit that pensions have become one of the most important items on any negotiation or consultation agenda. There are very good reasons for that. In the absence of any influence over employers on pensions during the past 10 years or so, there have been significant pensions scandals. Companies have gone broke and have had no money to pay contractual pensions. Companies have for years milked their pension funds by reducing their value and giving themselves a pensions holiday. The workers did not know about that.
As my noble friend said when moving the amendment, the Government accept that. They want to do something about it in the Pensions Bill by introducing consultation. But that is not enough. It is not enough for workers to be consulted because all that happens is that when the organisation decides to have a pension scheme, it consults. It has already decided what the pension scheme will be, how much it will pay or whether it will reduce the provisions of an existing scheme, and then it consults. If there is a mechanism for consultation in the firmthere may not beall that the workers can say, if they have a proper representative system, is that they like the scheme, they do not like it or they wish it were changed.
If there was collective bargaining and if, where the union was recognised for bargaining purposes, that could be done by the Secretary of State, that could be limited so that it was allowed only where there was recognition for collective bargaining. If there was recognition for collective bargaining, then the recognised union would be able to put up its own scheme. From the beginning, it would be involved in the formulation of the scheme.
A pension is regarded by many workers as, in effect, deferred paythat is what it is. In the present society, it may be even more important than pay, because if you do not like your pay, you can go somewhere else. However, if you retire and find that your pension is not worth anything, there is nothing you can do. Pensions are at least as important as pay. If the Government accept, as they have, that they should assist workers to get trade union recognition for core matters, those core matters should involve pensions. I support the amendment.
Lord Triesman: My Lords, the importance of pensions could hardly be more powerfully stated. I thank all noble Lords for their contributions in Grand Committee and today. The Government understand the strength of feeling that exists on the issue of pensions among trade unions and their members. I am sure that all workers hope that they can look forward to a comfortable and secure retirement without financial hardship. It is right and proper that trade unions should vigorously defend their members' pension rights.
The Government are taking positive steps to address this very serious issue in the Pensions Bill, which includes assistance to those who have lost their pensions and a right for employees and their
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representatives to be consulted on significant changes to their schemes. There is no question that the importance of the issue to workers and their unions is understood, and we acknowledge the positive effect that employee involvement on pensions can have.
The question is whether it is appropriate at this time to make pensions a subject for statutory collective bargaining. In looking at this, we need to bear in mind the aims of the statutory procedure and the factors which have made it a success to date. Key to this is the principle that the statutory procedure is a fallback. It is designed to encourage the voluntary resolution of recognition claims. It is intended as a last resort, where attempts by the parties to resolve a claim among themselves have ended in failure. That is why the Government do not believe that it would be appropriate at this time to add pensions to the core topics for collective bargaining. The evidence suggests that pensions are not commonly bargained about in voluntary recognition deals. So if we were to add them to the statutory bargaining topics, this would, in effect, make the statutory procedure broader in scope than most voluntary agreements.
That would risk making it far more attractive to unions to go to the CAC than to try to reach a voluntary agreement through dialogue with an employer. For this reason, the Government are making it clear that pensions should not be regarded as part of pay for the purposes of statutory collective bargaining.
I do not accept the contention that the Government are uncertain about this. We are trying to gauge what should be done, and the time at which it should be done, against the realities of experience and the results of research in this area. Recognition of the importance of pensions, and the fact that they appear to be moving up the bargaining agenda, means that we are taking a power so that we can add pensions to the list of core topics at such a time as evidence emerges that their inclusion as a topic for bargaining in voluntary agreements has become typical.
As I indicated in Grand Committee, the Government are undertaking research to get a clearer picture of the coverage and content of agreements signed since 1998. This will act as a benchmark against which to compare the results of further periodic surveys on this subject.
From my own experience, unions often prefer to deal with pensions in ways other than collective bargaining, especially where schemes relate to a specific professional or occupational group, or to a particular tier in a workforce. Unions often electsometimes appoint, but generally speaking these days they electtrustees to pension schemes. This concentrates expertise in a way which is not always apparent in the generality of collective bargaining. From the point of view of the trustees of the schemenot just the employer trustees, but the union or the workforce trusteesthey discuss issues which are for the trustees to decide, not those involved in the practice of voluntary agreements. That is the nature of trusteeship in most cases. It sometimes means that where a union shares collective bargaining
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responsibilities with other unions, but the pension scheme relates to a particular group or tier of workers for which one union happens to be responsiblerather than all the unions that are involved in that collective bargaining processthen that union can deal with those issues specifically, using its specific expertise. For purposes of illustration, that is the common practice across education at all levels in the arrangements for pensions. A general right would not be helpful or appropriate.
The Government have tried to strike a balance between the desire to encourage dialogue between employers, unions and workers on pensions, and the need to protect the smooth running of the statutory procedure. I hope noble Lords will feel that we have struck the right balance and expressed it. In the light of my explanation, I hope that my noble friend will feel able to withdraw the amendment, conscious of the fact that I doubt whether there is any lack of understanding on any side of the House of the importance of pension arrangements to workers.
Baroness Gibson of Market Rasen: My Lords, before my noble friend sits down, he mentioned that evidence is being taken at the present time. Can he give the House any indication of the timescale in relation to the results of this evidence?
Lord Triesman: My Lords, the evidence is being assembled through the research of Dr Sian Moore of the Working Lives Research Institute of the London Metropolitan University. The first phase of research has already taken place and some detailed data have been collected. The second phase is under way, which will look at how recognition has occurred in practice, and whether its scope and depth have developed over time, including in respect of pensions. We hope to publish the results of the second phase later this year.
Lord McCarthy: My Lords, before the Minister sits down, he says he is certain and that he does not like general rights, but what would he say "typical" means? If there were 50 per cent recognition of pensions in the recognition sector, would that shift get us a selective or general right? Would it need to be 45 per cent? What is "typical"?
Lord Triesman: My Lords, that question was asked in Grand Committee. I shall not answer it at the same length because I am very happy to refer back to what was said then. The Government do not believe that it would be appropriate to set a simple, quantifiable threshold, as that would not take account of the complexities of the issue. Collective bargaining on pensions may take many forms, as my noble friend Lord McCarthy will know. Employers and unions might bargain about the establishment of pension schemes, the eligibility of workers to be members of such schemes, the level of contributions and so on. Likewise, there may be a difference between what a recognition agreement says on paper and what the parties actually bargain about in practice. I know from experience that they are not always one and the same.
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We want to be able to look at the whole situation and reach a balanced judgment. That is why a simple numerical threshold could not reflect the entire picture. We believe that the research will show whether there is a general mood in the direction that is advocated by my noble friends. I make the point to them againand I apologise if I repeat it, but it is very importantthat many of the schemes in which unions have invested huge amounts of time and trouble, as have employers, are now dealt with by trustees. That is where the work is done, rather than through collective bargaining.
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