PENSIONS: EMPLOYEES ETC. OF NATIONAL PORTS AUTHORITY, ETC. (Hansard, 29 April 1970)

§ Mr. Mulley
I beg to move Amendment No. 98, in page 67, line 18, leave out subsection (14) and insert: (14) Where the National Ports Authority propose to establish a pension scheme or to alter any pension scheme maintained by them, 1351 then, unless their proposals for that purpose are settled by negotiation through such machinery as is mentioned in section 41(2) of this Act, they shall when framing them consult—

(a) in the case of proposals for the establishment of a scheme, the persons intended or expected to participate in the scheme or some person or organisation appearing to the Authority to be appropriate as representing those persons; or

(b) in the case of proposals for the alteration of a scheme—

(i) the participants in the scheme or some person or organisation appearing to the Authority to be appropriate as representing the participants; and

(ii) where applicable, the persons intended or expected to become participants in the scheme as a result of the proposed alteration, or some persons or organisation appearing to the Authority to be appropriate as representing those persons.
(15) Where the National Ports Authority propose to establish any contributory pension scheme in which the number of participants is intended or expected to be substantial, their proposals for that purpose shall include provision for the scheme to be administered by a body so constituted as to secure that not less than half its members are participants in the scheme. (16) Where the National Ports Authority propose to alter any contributory pension scheme maintained by them in which the number of participants is substantial or is expected to become so if the proposed alterations are made, then, unless the scheme already provides for the scheme to be administered by a body constituted as mentioned in subsection (15) above, the Authority's proposals for the alteration of the scheme shall include provisions for making it so provide. (17) Subsection (9) above shall (subject as mentioned in subsection (10) above) have effect in relation to subsections (14), (15) and (16) above as it applies in relation to subsections (2). (3) and (8) above; and nothing in subsections (12) to (16) above or this subsection shall be taken to prejudice the Minister's powers under subsections (I) to (II) above. I think that it will be convenient if, with this Amendment, we take Amendment No. 97, in page 63, line 10, That Clause 43, as amended, be divided: and that subsections (1) to (11) do constitute Clause 43 and that the subsections which follow subsection (11) be another Clause.

§ Mr. Deputy Speaker (Mr. Harry Gourlay)
So be it.

§ Mr. Mulley
This is a rather formidable Amendment, but it is not really as complex as it seems. Those who were present in Committee will recall that my hon. Friend the Member for Poplar (Mr. 1352 Mikardo) moved an Amendment to give effect to the principles now set out in subsection (14). I accepted the Amendment, but I now find that there will be presentational and drafting difficulties. A powerful unanimity emerged in Committee. Faced with a coalition of the hon. Members for Glasgow, Cathcart (Mr. Edward M. Taylor) and Sudbury and Woodbridge (Mr. Stainton), on the one side, and my hon. Friends the Members for Poplar (Mr. Mikardo) and Oldham, East (Mr. Mapp), on the other, I thought that it was wise to add the provision to the Bill there and then.
However, further study has shown that there would be difficulties for some pension schemes if we were to leave the Bill in its present form. I have discussed this with my hon. Friend the Member for Poplar, and I think that what we now propose will avoid some of the difficulties which could otherwise arise, while preserving the principle to which the Committee unanimously attached importance. I think that the Bill will be improved by, originally, the initiative of back benchers on both sides of the Committee, and now by these Amendments. They will avoid difficulties for a wide range of schemes when the Authority takes over.
The purpose of Amendment No. 97 is to divide the Clause, which has become very long, into two parts.

§ Mr. J. H. Osborn
I appreciate that the Minister's intention is to implement the wishes of the Committee. We cannot at this stage really query the Amendment, and I should not go to the length of suggesting that we should oppose it, but this is almost a dog's breakfast. Subsection (17) says: Subsection (9) above shall (subject as mentioned in subsection (10) above) have effect in relation to subsections (14), (15) and (16) above as it applies in relation to subsections (2), (3) and (8) above ". What does all that mean? If the Minister cannot explain now, I am certain that an explanation will have to be given in another place.

§ Mr. Mulley
This is merely a shorthand device, a common one, to avoid reciting what it says in subsection (9). If the hon. Gentleman reads the subsection he will understand that, subject to the reservations about subsection (10), 1353 subsection (9) has effect in relation to these new subsections. Nothing could be clearer.

§ Mr. Osborn
I thank the Minister for intervening. Subsection (9) was an unfortunate choice, because it says: In the application of subsections (2), (3) and (5) above to any pension scheme the benefits under ". I am not a draftsman, nor is the Minister. I know that the intentions are good, but I think it must be conceded that this is legislation in its worst form.
I query subsection (15), which says: Where the National Ports Authority propose to establish any contributory pension scheme in which the number of participants is intended or expected to be substantial, their proposals for that purpose shall include provision for the scheme to be administered by a body so constituted as to secure that not less than half its members are participants in the scheme. This may be excellent ideology and intention, but can it be achieved by way of legislation in this Measure at this late stage?

§ Mr. Mulley
It was exactly this principle which the hon. Gentleman and some of my hon. Friends were so enthusiastic about in Committee that led me to agree to include it in the Bill, though it has necessitated this rather lengthy draft. Having associated myself with the unanimity of the Committee on this matter, it would surely be wrong to seek to exclude it now.

§ Mr. Osborn
I said that it was an excellent ideology and intention. The Minister has tried his best to interpret our wish in Committee. My worry is whether this will add to confusion rather than simplify the issue. For this reason I cannot entirely thank the right hon. Gentleman for meeting our request—he has admitted that this is a difficult piece of drafting—because I wonder whether we have done the right thing, after all.

§ Mr. Stainton
This is what happens when we get thirteenth-hour Amendments. Without wishing to be savage, I twit the Minister over the use of the word " substantial " in two contexts. In view of what has been said about subsection (15), this is obviously not the happiest of expressions, but I will not pursue the matter.

§ Mr. Mulley
Can the hon. Gentleman recall an occasion when I complained about the use of the word " substantial "? I find it convenient in this context.

§ Mr. Stainton
I recall the point arising yesterday—perhaps the right hon. Gentleman was not in his place at the time—when I raised the matter with the Parliamentary Secretary.
More important, we read in subsection (15): Where the National Ports Authority propose to establish any contributory pension scheme in which the number of participants is intended or expected to be substantial, their proposals for that purpose shall include provision for the scheme to be administered by a body so constituted as to secure that not less than half its members are participants in the scheme. There is no reference to the " half its members " being representative of anything. They are, admittedly, participants in the scheme, but when we refer back to subsection (14) we find that it speaks of some person or organisation appearing to the Authority to be appropriate as representing those persons ". This recurs on three occasions, yet when we come to the day-to-day administration of the fund and the participation of " half its members "—admittedly, they will be paying members of the fund—we are not told who will nominate them and from where they will derive their representative authority. That is left completely in the air.

§ Mr. Mulley
This is an important point, but the hon. Member will recall his enthusiasm for subsection (14), which was inserted in the Bill and dealt with the matter of trustees not less than half of whom should be persons employed by the authority. It is not enough that they should be employed; they should be participants in the scheme.

§ Mr. Stainton
I was not the author of that Amendment, although I supported its theme. I did not necessarily concur with its wording and I do not necessarily feel committed to what is in this Amendment. There is nothing which relates the 50 per cent. representation on the governing body of the pension fund to any formal kind of representation. How these people are to be nominated and identified, I cannot imagine. There 1355 is no guide to this. Perhaps they will be management nominees. If we think on these lines, all the 50 per cent. of representation, albeit as participants in the scheme, could be a management-loaded body.
That is an extension of the point I have been making. The question is where these people will come from, how they are to be identified so that they can play an important rôle in contributing to management of the fund. There is a related question. The Minister has seen fit to deviate from the words imposed on him by the Committee, which turned very much on the expression " trustees ". That has been dropped and in its place we have the expression, " administered by a body."
I wonder why there is any connotation in terms of potential liability for acts committed by those persons running the fund. It may be that the word " trustees " has been dropped precisely on that account; I do not know. The argument could be advanced the other way round, in terms of the expression " by a body " in agency law. I leave it to the Minister to pick and choose his words in reply.
I hope that I shall get support from hon. Members opposite in believing that the important point is that in subsection (15), although it is 50 per cent. of the governing body, shall be participants in the scheme—that is, they will be working members employed by the Ports Authority—there is absolutely nothing said about how they will be selected and nominated. Yet, in subsection (14), when referring to consultations in setting up or amending schemes, we have it repeated on three occasions that discussions shall be with individuals or persons or organisations who clearly represent the persons affected.

§ Mr. Heffer
The points made by the hon. Member for Sudbury and Woodbridge (Mr. Stainton) are very valuable and perhaps we may have answers to them.
All the way through we refer to the National Ports Authority, but there will be local boards and when the various docks are taken over there will be different pension schemes in different areas. Therefore, there may have to be some differences in the application of a scheme 1356 in one area and the application of a scheme in another area. I should like to know whether this would come under the authority of a local board rather than that of a national pension scheme. The Mersey Docks and Harbour Board has its own scheme, which has been in operation for a long time. Will it be integrated into the national scheme? This is an important point on which I should like to have clarification.

§ Mr. Stainton
My thought and hope would be that there will be a national pension scheme and that this will be trading upwards so that there will be no question of debasing a particular element but the whole lot will go upward towards it.

§ Mr. Heffer
I agree, but we should have clarification because when the ports are taken over there will be schemes at different levels. This should be spelled out.

§ Mr. Mulley
As was explained at length in Committee, many difficulties will have to be faced, because there is a wide range of schemes. There are schemes for ports. There are people with individual schemes, in the sense that they have individual insurance policies. The range will be enormous.
One of the first problems is to integrate arrangements into the arrangements for the industry as a whole. It is not right to legislate, or for me to decide, how it should be done. Two factors are involved. The authority must be involved. Equally, as Clauses 41 and 43, provide, all these things are to be done by consultation with the individuals or the appropriate organisation. If there is a small group of six or eight in a scheme, obviously they would be consulted. If a scheme affected a whole dock, it would be appropriate for consultation to be with the trade union.
This was why the hon. Member for Sudbury and Woodbridge (Mr. Stainton), who is usually so helpful, was just a little difficult tonight, because the process of consultation which is set out in the proposed subsection (14) would decide how the 50 per cent. of members would be produced, because it would be consultation about the drawing up of a scheme or the alteration of a scheme. It would be the scheme itself which would deal 1357 with all the very important points as to whether there should be trustees, and so on.
Superannuation schemes are so complicated, and so important and vital to those concerned, that it would be wrong to try to prescribe any standard procedure in an Act of Parliament. Taxation provisions change, and schemes may want to change to take account of that. Therefore, the authority and those participating in schemes must have power to vary schemes. It would be the scheme itself which would set out the detailed provisions.
In reply to the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn), I am sorry about the inelegance of the drafting. I have neither the skill nor the aspiration to be a parliamentary draftsman. I will consider whether at a later stage a little elegance can be injected.
As the Committee rightly decided to put this important principle into the Bill, we want to be sure that we do it in a way which will not in any way worsen or make difficult the situation of those in existing schemes. At the same time, we want to ensure, through the process of consultation, on the one hand, and through the fifty-fifty principle, on the other, that those in the industry will be fully consulted and will fully participate in the working out of their schemes.
As my hon. Friend the Member for Poplar (Mr. Mikardo) said at the time, it is appropriate to talk in terms of fifty-fifty representation. We have got the principle here. We have safeguarded those in existing schemes so that they will not be in difficulty; nor will the Authority be in difficulty.

§ Mr. Berry
I am grateful to the Minister. I appreciate that, faced with the remarkable alliance which sprang up between both sides of the Committee—I do not know whether its members formed a group or an organisation, or whether they were still individuals—he had no alternative but to give in. This is an important step forward. We welcome it as a major concession which we played a major part in persuading him to make. I ask my hon. Friends to accept the Amendment.