September 10, 2010
MPs have voted on a Superannuation Bill which will cap civil service redundancy pay at one year’s salary or 15 month for voluntary redundancies.
After MPs voted by 326 to 244 in favour this week, the Commons sent the Bill to the committee stage for scrutiny.
At present, civil servants can get three years' salary and those recruited before 1987 are entitled to as much as six years' when made redundant.
But the recession’s impact on national debt has forced to government to reconsider public service pay levels and subsequent redundancy packages, as cuts of 25% or more are rolled out across most government departments in the coming years.
Before the result, Cabinet Office Minister Francis Maude said the government had a "duty to the taxpayer" to change a system which is already far more generous than schemes elsewhere in the public and private sectors.
Mr Maude said the current scheme made it ''prohibitively expensive'' to get rid of highly-paid, long-serving staff, meaning lower-paid workers were disproportionately hit if job cuts were needed.
In certain cases, up to 10 low-paid workers were being released to save one high-paid executive.
However, the Public and Commercial Services Union threatened to challenge the move in court, accusing the government of trying to tear up workers' contractual rights at a time when they are most vulnerable.
Mr Maude has urged unions to accept the new terms before the Bill is passed into law in order to avoid future strikes and walkouts.
