HC Deb 07 July 1981 vol 8 cc369-73

Lords amendment: No. 15, in page 33, line 3, after "of' insert "any".

Mr. Kenneth Baker

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

Mr. Deputy Speaker

With this we may take Lords amendments Nos. 16 to 22, 60 and 61.

Mr. Baker

This is a series of amendments to clauses 33 and 76 which clarify the drafting of those pensions clauses in a number of ways, and it may be helpful if I take them together. They concern important matters. My hon. Friend the Under-Secretary and I have been consulting the Post Office, the trustees of the Post Office pension fund and the unions concerning the future of the fund. The consultations are almost complete, but we want time to reflect on the issues and we do not propose to take any hasty decisions.

Hon. Members will probably be aware that the Post Office Board has recommended that the existing pension fund should be split into two, with one fund for each corporation, but that the trustees and the unions would prefer the single fund to be maintained. A number of compromise solutions have also been suggested which involve varying degrees of separation, including the possibility of two sets of trustees or two schemes but with a common investment fund.

I am sure that all hon. Members would readily agree that the Bill should not exclude the possibility of implementing any solution that had the support of the parties concerned—I emphasise that—or which was felt to be the most acceptable compromise. The amendments are designed to achieve that end.

Amendment No. 15 makes it clear that orders may be made about categories of persons to which the clause applies and need not apply to all such persons. This might be necessary if a specific order dealt only with members of the Post Office, or convenient for dealing with some other group of BT employees.

Amendment No. 16 amends the drafting of the existing clause 33(1)(b) and 33(1)(c) to take account of the fact that any transfer of liabilities under the clause or of the assets of a pension fund will be from trustees of one pension fund to another. The new paragraph (c) also allows the apportionment of a fund held jointly for Post Office and BT schemes. The new paragraphs (bb) and (bc)put beyond doubt that the Secretary of State can use his powers to provide for the maintenance of a single pension fund in the case where there are two sets of trustees, one for the pensions of each corporation, or for the holding of the assets of the fund by investment trustees. These are both options that have been suggested by the Post Office, the trustees or the unions.

Amendments Nos. 17 and 18 are drafting amendments which make it clear that the references in clause 33(1)(d) are to section 47 of the 1969 Act.

Amendment No. 19 and its equivalent to clause 76 are designed to ensure that all relevant matters can be covered in any ministerial order, and amendment No. 21 ensures that orders can cover the payment of administrative expenses in relation to pensions as well as the payment of the pensions themselves.

Amendment No. 20 ensures that the orders can also modify any statutory provision or contract of employment, but only in so far as it might be necessary to give effect to an order. That is necessary because the creation of a BT pension scheme might require modification of section 47(10) of the 1969 Act to allow the payments in relation to employees of the Postmaster General's department to be made by the Government to trustees of a BT scheme as well as those of a Post Office scheme. Amendment No. 61 makes the corresponding change to clause 76. Similarly, it is a condition of employment in the Post Office that most employees belong to the Post Office pension scheme, and if a new BT scheme were created that condition would have to be changed for BT employees to refer to the new scheme.

Amendment No. 22 corrects a drafting error and ensures that the clause applies to all persons who leave Post Office employment before the appointed day.

This is a complex set of amendments, and I hope that I have explained them to the House's satisfaction. I should like to stress again that many of them are merely to ensure that all possible solutions to the pension fund problem can be implemented under the Bill.

The Government have not yet come to a conclusion, but we intend to proceed with the maximum degree of consent. I am sure that hon. Members will agree that it would be wrong for the drafting of the Bill to rule out particular solutions before decisions had been taken. I hope that the House can agree to the amendments.

Mr. Charles R. Morris (Manchester, Openshaw)

I agree that Lords amendment No. 16 gives more clarity in the arrangements for a possible splitting of the Post Office superannuation fund. However, it also focuses attention on the gravity of the decision that the Minister will take on splitting the fund. That decision will touch the lives of 400,000 employees and members of the staff of the Post Office and British Telecommunications. It will affect the future well-being of 2 per cent. of the working population of this country. That is a measure of the decision if the Minister and the Government decide to proceed with the splitting of the fund.

The fund is the largest superannuation fund in Britain today, with assets of £3 billion and investments in 1,470 companies. The split would be against the advice of the trustees and against the wishes of 90 per cent. of the Post Office staff and employees, as represented by their recognised trade union.

I was very encouraged when the Minister said that the Government would seek a compromise that would attract the maximum support of the parties concerned. The only people who have argued in favour of splitting the fund are the chairmen of the two corporations and, perhaps, individual Ministers. I know that the hon. Gentleman himself is not enamoured of the possibility of splitting the fund. Everyone who participates in the fund is opposed to the split.

In Committee and on Third Reading one phrase came easily to the lips of Ministers and all the other Conservative Members who spoke, and I could understand the justification for it. They reiterated that nobody would be disadvantaged by the split. It sounded encouraging, but we have had no proof. The 400,000 staff are becoming increasingly anxious about the proposed split.

If the Minister can demonstrate tonight that the pension rights of not one member of the Post Office staff will be disadvantaged in any way, let him say so clearly and unequivocally. We have been told that the split will mean an additional £1 million administrative expenditure, yet we have also been told that nobody will be disadvantaged. There is a wide age variation in the composition of the various postal and telecommunications grades to be covered by the two funds, yet we are told that nobody will be disadvantaged. We and the Post Office staff want to see the proof.

We understand the position in which the Minister finds himself. We take solace from the fact that he has said that he will not rush into making a decision. He said tonight that he wanted time to reflect on this crucial matter of splitting the fund. I hope that he will reflect and that he will give individual members of the Post Office staff the opportunity to express their concern, anxieties and views. This issue touches the lives and future well-being not only of Post Office staff but of their families.

Mr. Harry Ewing (Stirling, Falkirk and Grangemouth)

It is not my intention to delay the House for more than a few minutes. I wish to support my right hon. Friend the Member for Manchester, Openshaw (Mr. Morris) because we are sponsored members of the Union of Communication Workers.

The Union of Communication Workers has been bitterly opposed to the splitting of the Post Office throughout the proceedings on the Bill. However, it has now organised its headquarters to take account of the new structure in the Post Office. But all the unions representing Post Office workers are united in not wishing to have the superannuation fund split in the way that the Post Office Board has advised the Minister to divide it.

The only advice that the Minister has had in favour of splitting the fund has come from the Post Office Board. The trustees and the 400,000 members of the fund are certainly opposed to the separation.

The fund belongs neither to the Post Office nor to the Government but to its 400,000 members, who are employed by the Post Office. I am sure that the Minister, being the reasonable man that I know him to be, will not want to take a decision of such magnitude without knowing the views of the 400,000 people who make up the membership of the fund.

My right hon. Friend the Member for Openshaw and I have the good fortune from time to time to be invited to lecture at our union school. Students constantly ask "What is to happen to the Post Office superannuation fund?"

The Minister may say that no member will be disadvantaged as a result of splitting the fund. With my experience of superannuation, I accept that is always true at the point of separation, but, as year follows year and as different investment policies are followed, very soon the two sets of benefits being paid to the two groups making up the new divided superannuation fund get out of line.

The Minister does not need to go to the barricades on this issue. After all, he has got the basic split of the business. He has the two businesses of telecommunications and posts. The Secretary of State for Industry's ideology has been fulfilled in that regard.

I believe that the Minister is privately convinced that dividing the fund is a disastrous step to take. I hope that in a gesture of good will to the 400,000 members of the fund he will not further consider dividing the fund.

All these amendments give me cause not for concern but for exercising caution. With these amendments the Minister has given himself more flexibility to cover all the eventualities during his consideration. But I still plead with him to return to the present position and to maintain the unified superannuation fund, in the knowledge that the fund belongs not to the Post Office or to the Government but to the 400,000 employees.

11.30 pm
Mr. John G. Blackburn (Dudley, West)

The right hon. Member for Manchester, Openshaw (Mr. Morris) is right to draw our attention to this aspect of the matter. In Committee he drew our attention to it with force and determination. We are talking about the pension arrangements for 400,000 people, as has been graphically outlined.

Perhaps I might direct the attention of my hon. Friend the Minister of State to something that I have said previously, and which I now re-emphasise. When the Carter committee produced its report in 1977, it viewed with a little caution the assets of the superannuation fund, to see whether it was in a position to meet its liabilities. Yet again, on behalf of those whose life savings and pension arrangements are involved, I say that if there is to be a divide, we must make sure that when those funds are passed over they are in a sound, healthy state in order to fulfil the commitments on behalf of the 400,000 contributors. Yet again, unashamedly, I say that we must not pass over this pension scheme unless it is financially sound. It would be unfair to transfer this burden from a Government Department to the two sets of trustees.

Mr. Stanley Orme (Salford, West)

Echoing what hon. Members have been saying, I welcome the Minister of State's cautious approach. The amendments do not worsen the situation. They give more flexibility to the Government. I am sure that the Minister has it in mind that we are talking about moneys that belong to 400,000 people.

When I was a Minister dealing with occupational pensions, it was borne in on me very strongly that, irrespective of what the chairmen or boards of companies say, the money concerned belongs ultimately to those who have contributed to the funds and is, in effect, part of their savings; it is crucial to them.

I am sure that the Minister does not want to do anything that will create uncertainty and problems, whether or not the fund is split and however the Government recommend that we proceed. In that regard I welcome the fact that the Minister is not rushing at this obstacle in the sense that he feels that he must get it cleared out of the way in the immediate future. I hope that he will be able to bring his proposals to the House so that we can look at them. It would be unfortunate if far-reaching decisions were taken during the recess without Members having an opportunity to examine them. The Minister of State might reflect on that matter tonight. Parliamentary time is not his responsibility. He will readily tell me that. It is the responsibility of the Leader of the House. But perhaps the Minister will bear in mind our concern to examine these matters.

This issue is separate from some of the contentious political arguments that we have had about the Post Office and the telecommunications industry. We do not in any way weaken our resolve and our opposition generally. However, as regards the pension arrangements, there is, I hope, much more of a meeting of minds, as has been expressed this evening.

Perhaps the Minister will give us his reflections on those matters.

Mr. Kenneth Baker

I am grateful for the opportunity provided by this short debate for right hon. and hon. Members to make the points that they have made. As the right hon. Member for Salford, West (Mr. Orme) said, parliamentary time is not within my control, but I have noted what he said. I suspect, however, that if I made a decision with which he concurred he would not mind if I announced it during the recess, but that if he did not concur he would expect me to make it in some way to Parliament. I understand the point.

I also understand the concern expressed by the right hon. Member for Manchester, Openshaw (Mr. Morris). He expressed it also in Committee, as did the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing). I assure my hon. Friend the Member for Dudley, West (Mr. Blackburn) that if the pension fund were to be split there would be no change in the overall funding arrangements for any assets or liabilities of the fund. In particular, the Government would continue to make the payments now made under section 47 of the 1969 Act.

I was asked to reassure pensioners and those who are expecting to receive pensions. The Bill provides that no order that can be made can remove or diminish any existing pension rights. I re-emphasise that. The Government would much prefer to give effect to a solution endorsed by all interested parties, but it must be accepted that there may be disagreement and that there must be some means of resolving such disagreement. That responsibility must fall on the Secretary of State, who is accountable to Parliament for his actions. That is why the powers contained in these amendments are needed.

Question put and agreed to.

Lords amendments Nos. 16 to 23 agreed to.

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