Local Government and Communities Committee, 03 Jun 2009

Meeting date: Wednesday, June 3, 2009

Official Report 358KB pdf

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Subordinate Legislation

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Firefighters' Pension Scheme Amendment (Increased Pension Entitlement) (Scotland) Order (SSI 2009/184)<br />Local Government Pension Scheme Amendment (Increased Pension Entitlement) (Scotland) Regulations 2009 (SSI 2009/186)

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Local Government (Discretionary Payments and Injury Benefits) (Scotland) Amendment Regulations 2009<br />(SSI 2009/187)

We will consider three Scottish statutory instruments that are subject to the negative resolution procedure. The Subordinate Legislation Committee considered all three instruments and expressed concerns only about SSI 2009/187. The concerns were to do with defective drafting, which does not affect the legality or intent of the regulations. Members have received copies of the instruments and have raised no concerns.

Do members agree to make no recommendation to the Parliament on SSI 2009/184?

I wonder whether we can obtain information on the costs and implications of the order and of the regulations on the local government pension scheme. The instruments arise because of a previous error, and they seek to preserve entitlements in pensions being paid to council employees and firefighters. However, the same benefit is not being applied to national health service staff or to teachers, as the notes that we have been provided with make clear. The Scottish Government has chosen this course of action for local government employees and firefighters, but the pensions for teachers and NHS staff are a matter for determination by Her Majesty's Government, which has taken a different approach. The Scottish Government's Executive note on the order says that NHS pensioners and teacher pensioners will have

"seen their pensions reduced from 6 April 2009."

I would like to know what that reduction is.

Or the effect of the reduction.

Indeed. If we approve SSI 2009/184 and SSI 2009/186, that will obviously not apply to firefighter and local government pensioners.

The Executive note also states that, if we approve the SSIs, overpayments of pension that were made because of previous errors in calculation

"will be written off and the affected pensioners will not be required to repay any of the overpayments."

That is fair enough, but does that mean that NHS staff and teachers in Scotland, in addition to having their pensions reduced from 6 April 2009 because of the error, are being required to repay the element of their pension that was previously overpaid? If so, what does that mean for them? There are equity issues here regarding there being potentially unfortunate consequences for some groups of public sector workers but not for others.

Or benefits.

Or benefits. Yes, you can look at it one way or the other.

I presume that you do not wish to make any recommendation on the instruments.

All I am saying is that we must consider the equity issues here. The Scottish Government has chosen, as a matter of policy, to take a different route from that which Her Majesty's Government has taken. However, the point is that the Scottish Government has, unfortunately, not been able to take that route in respect of all public sector employees. We are therefore creating a differentiated situation whereby the SSIs will preserve and sustain benefits for some workers' pensions, while other pensioners will in effect be disadvantaged because of their different payment-setting mechanisms. There is an important policy issue here.

I think that we have the right to ask for clarification and views from the Cabinet Secretary for Finance and Sustainable Growth on the issue, but the order is a negative instrument, so it will go through unless someone moves a motion to annul.

When does the 40-day period elapse? Is it 26 June?

We could reconsider the instrument next week, if you want to move a motion to annul. We have had no notice of such a motion, but if you wish to delay the amendments to the pension schemes for firefighters and local government employees, we can reconsider them next week. If you want to move a motion to annul, you can do so.

I may do, but if we get answers to my questions, that might be sufficient.

Another question that arises, which the cabinet secretary may or may not be able to answer, is what impact there is for Her Majesty's Revenue and Customs if the United Kingdom Government claws back overpayments for the pensions that are in its control. Some people who may have received pension overpayments will have paid tax on them. Has there been clarification from Her Majesty's Government on the impact for HMRC of people having overpaid tax on the taxable element of their pensions?

That is fair comment.

We can get a letter away to cover those two points.

Do members agree that we will make no recommendation to the Parliament on SSI 2009/187?

Members indicated agreement.

Meeting continued in private until 13:21.