Legislative clauses in the Public Service Pensions Bill: the Henry VIII legacy

In Autumn 2012, the Public Service Pensions Bill was presented to parliament with publically made government guarantees that it represented a 'generous deal' and a 'settlement for the generation', fixing pensions for the next 25 years. The bill contains a breathtakingly wide-reaching Henry VIII clause, which gives this and future governments unprecedented powers to amend any legislation and to make unilateral and retrospective changes. Where exercised, this could adversely affect hundreds of thousands of people.

The current public pensions legal framework (and existing safeguards) is set out in the Pensions Act 1995 and Superannuation Act 1972. These soon to be replaced acts prevent such retrospective amendments. However, the bill has the potential to adversely affect accrued pension rights. This is likely to result in legal challenges to the bill if enacted, including challenges under the Human Rights Act 1998. It is worth highlighting that MPs' pensions fall outside these changes, begging the perhaps quixotic question as to why the majority of public workers' pensions cannot be similarly ring-fenced.

The British Medical Association (BMA) is leading the charge in resisting these changes and campaigning for the Henry VIII clause to be removed or at least subject to significantly tighter safeguards.

Constitutional corruption

A Henry VIII clause is a provision that enables the government to repeal or amend legislation by way of delegated (secondary) legislation, without the need for parliamentary debate. This is legislation via the backdoor, denying parliament the opportunity to subject the measures being passed to the necessary degree of scrutiny.

Henry VIII clauses are counter-democratic and effectively undermine parliamentary sovereignty. The bill most worryingly allows for retrospective changes: such as taking away accrued benefits including reducing accrued final salary rights and amendments to the PSPB including: drastically changing the design of the pension schemes and its regulations as set out in section 7 and amendments to relevant pension statutes that are not yet enacted.

Support for this view is found at the highest level. Henry VIII clauses have been robustly criticised as a 'constitutional oddity' which must be 'clearly limited, exercisable only for specific purposes, and subject to adequate parliamentary scrutiny' (House of Lords Constitution Committee, Sixth Report on the Public Bodies Bill, 4 November 2010). At the Lord Mayors' Annual dinner for Judges in July 2010, the Lord Chief Justice Judge recommended that they be 'confined to the dustbin of history'.

In its recent report on the bill, the Delegated Powers and Regulatory Reform Committee agree that the current Henry VIII clause should be substantially limited.

The bill's explanatory notes (paragraphs 24-27) state that the Henry VIII clause may be necessary where 'the legislation is inconsistent with or requires modification ?as a consequence of scheme regulations' but ?as drafted, the clause goes beyond this to ?give the potential for radical changes rather ?than simple consequential modifications ?as envisaged.

No checks and balances

Currently, the bill's sole safeguard provides limited opportunity to place changes before parliament before they are imposed. The affirmative resolution procedure, required to amend primary legislation or introduce a retrospective change which has a significantly adverse impact upon individual rights, appears to be little more than a 'rubber stamping exercise', and will not provide an adequate safeguard against constitutional corruption. This is because:

1) the process is effectively useless '“ an instrument has not been struck down since 1969;

2) there is no meaningful scrutiny; and

3) there is only one 'all or nothing' vote to uphold or strike down the instrument, with no opportunity to provide amendments.

At the very least, there should be an enhanced procedure, for example, the Super Affirmative Procedure (as in section 18 Legislative and Regulatory Reform Act 2006) in order to achieve better parliamentary scrutiny of any future changes.

The bill flies in the face of government guarantees and permits successive governments to amend the bill substantially without effective parliamentary input and with little or no publicity for changes that could adversely affect hundreds of thousands of public sector workers and their dependants. The BMA will continue to lobby for the changes required to avoid significant constitutional corruption and potentially catastrophic consequences for thousands of public service employees. Without these changes, the government is likely to face a substantial judicial review or Human Rights Act claim.