The House of Commons backed the coalition government's plan to cap redundancy pay at 12 month's salary or 15 months for voluntary redundancies by 326 votes to 244.
Under current arrangements, civil servants can receive upto three years' salary on redundancy and those who joined prior to 1987 could receive upto six years. It is estimated that the coalition government would wield an axe on civil service numbers following the spending review next month when Whitehall budgets are expected to reduce by almost 25%. The current arrangements also favour the more senior civil servants because the costs of removing them are prohibitive and hence, job cuts affect lower paid workers disproportionately.
The Superannuation Bill would now move to the committee stage after clearing the first hrudle. The Cabinet Office Minister Maude, opened the debate and urged unions to agree to the proposed redundancy terms and make the bill redundant itself before it became law. Earlier, an ammendement to apply the rules proposed by the previous government was defeated by a majority of 89.
Francis Maude, the Cabinet Office Minister, opened the debate and called on civil service unions to agree to the new terms and make the bill itself redundant before it became law. He expressed hope that the Government could reach an agreement with the PCS union on the issue however he made it clear that no one union would be allowed to stand in the way of the reforms.
"The current scheme is unaffordable, it is unsustainable," he said. "The level of payments under the current scheme would be excessive even if we were not facing such a difficult financial situation."
I do not want this to end up being something which is unilaterally imposed. I want there to be a genuine, consensual arrangement, where all six civil service unions agree to a new, sustainable long-term scheme," he said.
Tessa Jowell, the Shadow Cabinet office Minister, agreed in principle with her counterpart on the Treasury benches however argues that a fair reform needs to be implemented such that the interests of the lowest paid are protected. Some Liberal Democrats have publicly said that they would not support the bill.