HC Deb 26 June 1980 vol 987 cc925-9

Lords amendment: No. 125, in page 69, line 37, at end insert—

'—(1) Subject to sub-paragraph (2), the provisions of section 74 of the Transport Act 1962 (Minister's powers to make provision about pensions in the nationalised transport industry) shall have effect on and after the appointed day as if—

  1. (a) the expression "Board" included the successor company; and
  2. (b) the references in subsection (1)(a)(ii) of that section to the Commission included references to the Corporation; and
  3. (c) the reference in subsection (2)(a) of that section to a pension scheme in which employees of the Commission, or a subsidiary of the Commission, participated before the date there mentioned included a reference to a pension scheme in which employees of, or of a subsidiary of, the Corporation participated before the appointed day.

(2) Except on the application of the successor company, no order shall be made under the said section 74 on or after the appointed day which has the effect of placing the successor company or a subsidiary of the successor company in any worse position; but for this purpose the successor company or a subsidiary shall not be regarded as being placed in a worse position because an order provides that any changes in a pension scheme are not to be effected without the consent of the Minister.

(3) An order such as is mentioned in subparagraph (2) which is made without the application of the successor company shall not be invalid because in fact it does not have the effect of securing that the successor company and its subsidiaries are not placed in any worse position, but except in so far as the successor company approves the effect of the order the Minister shall as soon as may be make the necessary amending order.

(4) Subject to sub-paragraph (6), any order under the said section 74 and any regulations to which paragraph 17 of Schedule 7 to the Transport Act 1962 applies (which continues in force certain earlier pension provisions) which—

  1. (a) are in force immediately before the appointed day; and
  2. (b) relate to the Corporation, its employees or its pensions schemes, shall continue in force, subject to any provision made by virtue of sub-paragraph (1), and as respects anything falling to be done on or after the appointed day shall have effect as if for any reference (however worded and whether 926 express or implied) to the Corporation there were substituted a reference to the successor company.

(5) A person who on the appointed day—

  1. (a) ceases to be employed by the Corporation and becomes employed by the successor company; or
  2. (b) is employed by a company which immediately before the appointed day was a subsidiary of the Corporation but on that day becomes a subsidiary of the successor company,
shall not thereby cease to be eligible to participate in any pension scheme in which he was a participant immediately before the appointed day.

(6) Subject to sub-paragraph (5), a person who on or after the appointed day leaves or enters the employment of the group consisting of the successor company and its subsidiaries (in this sub-paragraph referred to as "the NFC group") shall not be eligible by virtue of any provision of an order under the said section 74 made before that day—

  1. (a) to participate in any of the Corporation's pension schemes by reason of any employment outside the NFC group; or
  2. (b) to participate in a pension scheme other than one of the Corporation's pension schemes by reason of his employment within the NFC group.

(1) In this paragraph—

  1. (a)" participant", in relation to a pension scheme, means—
    1. (i) in relation to a scheme under which benefits are or will be receivable as of right, a person who has pension rights under the scheme (whether he has contributed or not); and
    2. (ii) in relation to a scheme under which benefits are not or will not be receivable as of right, a person who (whether he is referred to in the scheme as a member, as a contributor or otherwise) has contributed under the scheme and has pension rights thereunder;
    3. and "participate" and "eligible to participate" shall be constructed accordingly;
  2. (b) "pension", "pension rights" and "pension scheme" have the same meaning as in section 74 of the Transport Act 1962; and
  3. (c) references to the Corporation's pension schemes are to schemes established by the Corporation or in relation to which the rights, liabilities and functions of the Transport Holding Company were transferred to the Corporation by the British Transport (Pensions of Employees) (No. 1) Order 1968.

Mr. Kenneth Clarke

I beg to move, That this House doth agree with the Lords in the said amendment.

The amendment concerns pensions, which no doubt will lead the entire House to believe that I am about to get immersed in the technicalities of pension schemes again. I am glad to say that this has nothing to do with the other pension provisions in part II which I was debating with the right hon. Member for Barrow-in-Furness (Mr. Booth) a little earlier.

This is a technical amendment, which inserts transitional provisions to secure that the change of the National Freight Corporation into a denationalised successor Companies Act company has no untoward consequences on the pensions front. The amendment is necessary because the problem that one has to sort out is the criss-crossing of pension scheme membership between British Rail and National Freight Corporation schemes. I do not have to rehearse the history, but there has been a general interchangeability between those companies. Particular businesses have gone backwards and forwards. People have retained their pension rights.

The result is that some British Rail employees are members of National Freight Corporation pension schemes and some National Freight Corporation employees are members of British Rail pension schemes. What we are aiming to do is not to disrupt those who have gone through that process and are in their present pension funds. We have tried to make sure that the criss-crossing does not continue in the future, as it will not be appropriate for it to continue once the National Freight Corporation becomes a private sector Companies Act company.

The amendment also provides for a limited order—making power to continue in [...]elation to the successor company schemes in case that is needed to sort out any complications that might still arise after the transition.

Mr. Prescott

Again, this is a very complicated area of pensions, into which I venture for the first time. I do not intend to show that I do not understand it. Details have been gone into this evening. Certainly, we have been pressed by the British Railways Board representatives on some of the points that the Minister made about the criss-cross pensions. He has said that he intends to make an order to cover a number of the points. I hesitate to detail the specific areas of employees concerned. The Minister indicated some of the three categories I have in mind, especially those covered by the interavailability regulations of the British Transport (Pensions of Employees) Order 1969 applying to the National Freight Corporation and staff who belong to the BR pension schemes.

These categories of employees and others want the Minister to ensure that all points of concern are covered in the order. The hon. and learned Gentleman did not say whether there had been any difference of opinion over interpretation of some of the pension schemes. I assume from his remarks that it is not necessary for me to spell out the categories, that he is aware of them and that he intends to cover these areas by making an order.

I note what the Minister said about the by-election. The hon. Member for Glasgow. Shettleston (Mr. Marshall), a constant attender in Committee, could not be present today. He has sent us the result of the by-election, which is very satisfactory.

Mr. Dobson

I do not wish to delay matters but I am perturbed by the Parliamentary Secretary's last remarks. Unlike my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), I am without the benefit of an actuary. It is almost like being without benefit of clergy in a semi-marital relationship when talking of pensions.

I should like to have an assurance from the Minister that no one presently working for National Freight who is a member of a British Rail scheme and no one currently working for British Rail who is a member of the National Freight scheme—none of the existing pensioners or scheme members—will suffer as a result of the amendment, which I am scarcely able to follow.

Mr. Kenneth Clarke

No one in the National Freight Corporation will have to change his pension scheme as a result of the conversion of the corporation into a private sector company. Nothing in the Bill will change the obligation of British Rail and the National Freight Corporation, soon to be the company, to reimburse each other in respect of employees in the other's pension scheme. In future, when employees transfer to or from the National Freight Company, they will have to transfer to their new employers' pension scheme. That is only to make sure that, after the transition, it becomes like a private sector company in that respect.

I shall bear in mind the points made by the hon. Member for Kingston-upon-Hull, East (Mr. Prescott). I do not believe that there is any difference of opinion. I think that the three basic principles I have set out are the aim of all sides. We retain this limited order-making power in case unexpected complications—only too easy in this sphere—need to be resolved by using the order-making power.

I am glad to know that the hon. Member for Glasgow, Shettleston (Mr. Marshall) is still in touch with us. There were times during the passage of the Bill when I wished that more hon. Members were communicating only by telephone from different parts of the United Kingdom. I recall, however, some of the hon. Gentleman's valuable contributions.

Question put and agreed to.

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