§ Mrs. ChalkerI beg to move amendment No. 10 in page 4, line 10, at end insert—
'(1A) In exercising with respect to any pension scheme the powers conferred by this section, the Secretary of State shall take into account any representations made by the persons administering the scheme.'.
§ Mr. Deputy SpeakerWith this it will be convenient to take amendment No. 11, in page 4, line 10, at end insert—
'(2) Where the Secretary of State is requested to do so by the trustees of a pension scheme of the National Bus Company or a Union or Unions with negotiating rights for members who are covered by the pension scheme, he shall use his powers under 754 subsection (1) of this section to make an order requiring that the terms and conditions of the pension scheme which shall be offered by the employer to whom the subsidiary of the National Bus Company is transferred shall not be less favourable than those which were provided for those employees by the National Bus Company scheme of which they were members.'.
§ Mrs. ChalkerThe Government acknowledge in the amendment the importance that employees will attach to the establishment of satisfactory pension arrangements in a privatised subsidiary. We paid a great deal of attention to the subject in Committee. The initiative for the establishment of a suitable pension scheme will in the first instance rest with the National Bus Company. As I said in Committee, no intervention may be needed by the Government, but in case unforeseen difficulties arise the clause is intended to ensure that the Secretary of State can resolve them by making appropriate pension orders under section 74 of the Transport Act 1962. If no such difficulties arise, the power may never have to be used.
In practice, the need for pension orders is likely to be identified, first, by those administering the pension schemes. It would be unusual for a Secretary of State to take the initiative. So far as I am aware, it would be unprecedented for him to do so without consultation. However, worry was expressed in Committee that a right for the trustees to make representations should be made explicit in the Bill. That is the purpose of the amendment.
We were also pressed in Committee to amend the Bill to oblige the Secretary of State to use his order-making power in certain circumstances. We have, as I promised, given due consideration to that proposition, but we concluded that the clause should remain discretionary in line with the principal order-making power in section 74 of the Transport Act 1962. As I have said, all being well, the power may never have to be used, but by providing that the Secretary of State should take account of representations from the trustees in exercising his powers under the clause we have explicitly recognised the fact that the trustees might wish to express views on the need for an order, and we have required the Secretary of State to take account of those views.
I believe that the amendment is a reasonable compromise between two opposing points of view and one which the House will welcome.
§ Mr. BoothAmendment No. 11 would ensure the statutory protection of the pensions of those who are forced to leave NBC employment by the provisions of part I, in two circumstances. The first is if the trustees of the pension fund feel that it is necessary for the Secretary of State to make an order to protect the transfer. The second is if the trade unions believe that it is necessary. Government amendment No. 10 merely requires the Secretary of State to take account of the representations of those administering the fund, who I assume are the trustees.
Under our amendment, the Secretary of State's order-making power to transfer, which he would use as requested, would ensure that the transfer of pensions took place on terms as favourable as those enjoyed by employees in their current NBC schemes. Unless this is done, we believe that a number of employees, particularly the older ones, could be greatly disadvantaged by having to transfer with no statutory protection, even if they can achieve an effective transfer.
We have in mind the fact that under the provisions of this part of the Bill the NBC is not a free agent. It can be 755 instructed, under clause 3, to carry through the transfer whether it likes it or not. Therefore, the NBC will not be able to ensure that the pension rights of its employees are protected.
Under the Social Security Pensions Act 1975, the two principal funds of the NBC have been approved by the Occupational Pensions Board. The funds can thus freeze the pension of anyone leaving after five or more years of pensionable service in the NBC. Even for those this can be a poor alternative to continuing in an NBC index-linked pension scheme. The transfer will be difficult anyway. There are various complications, which I shall not enter into tonight. If it is at the mercy of a company to which the NBC is forced to sell a subsidiary, that will make it impossible to protect certain of the pension rights.
There is no evidence that any company buying an NBC subsidiary will maintain the pension rights of the employees whom it takes over, unless there is an initial order made by the Secretary of State requiring it to do so. Therefore, we fear that the employees' contracts of employment and pension rights will be lost or broken.
While we understand our argument with the Government over whether it is in the wider public interest that the profitable parts of the NBC should be sold, we cannot understand that the Government should not go along with us and seek to protect those who, through no fault of their own, are turned out of employment in the NBC and into other companies. It is wrong for the Government to penalise the employees of the NBC in the doctrinaire pursuit of their privatisation policy. Therefore, I hope that at the appropriate time there will be a vote in favour of amendment No.11.
§ Mrs. ChalkerI should make it clear to the House that I understand amendment No. 11, because it is similar in content to a number of others tabled by the Opposition and debated thoroughly in Committee. I hoped that I had sufficiently explained the Government's view, but I shall have to say more on the subject.
Pension arrangements will be one of the most important matters that the bus company will have to discuss with employees' representatives during the steps leading up to the sale of a subsidiary. The NBC's task will be to work out the detailed form of any new scheme in the light of actuarial advice, bearing in mind the need to present an attractive package to potential private investors and to ensure that it is acceptable to employees. It is possible that suitable arrangements may be agreed without the need for any intervention by the Government.
We recognise that things may not go smoothly because of the unforeseen technical complexities of pensions. That is why clause 5 empowers the Secretary of State to make pension orders relating to a privatised subsidiary—in the terms of subsection (1) of a "related company".
Clause 5 essentially gives the Secretary of State a power to iron out technical difficulties and thus ease the transition from the public to the private sector. The Opposition amendment seeks to go way beyond that, because it seeks to dictate what the terms and conditions of the pension scheme of a privatised company should be. Moreover, it would allow third parties to tell the Secretary of State how to exercise his order-making power.
It is important that there should be no misunderstanding about the amendment. There is nothing in the Bill that 756 could affect either pensions already in payment to former NBC employees or the accrued pension rights of existing employees, whether or not they are to be transferred to the related company. The issue about which the right hon. Member for Barrow-in-Furness (Mr. Booth) spoke is whether we should lay down in the Bill the pension arrangements that would apply to future service with the new company, the extent and breadth of which we do not know. As the Opposition amendment makes clear, they believe that the Secretary of State should be obliged to make orders to impose the present structure of benefits upon the related company and its work force—for ever and a day, I suppose. We believe that the Government have no business, and should not take the power, to dictate a particular pension regime to a private company.
There is an overall statutory framework governing pension arrangements—the Social Security Pensions Act 1975. It is carefully constructed. Within that framework, and under the supervision of the Occupational Pensions Board, pension arrangements are a matter for negotiation between the company and the work force. That, in our view, is how it should remain. The Government should not have a hand in it. If the right hon. Gentleman presses amendment No. 11 to a vote, I shall call upon the House to resist it.
§ Amendment agreed to.
§
Amendment proposed: No. 11 in page 4, line 10, at end insert—
'(2) Where the Secretary of State is requested to do so by the trustees of a pension scheme of the National Bus Company or a Union or Unions with negotiating rights for members who are covered by the pension scheme, he shall use his powers under subsection (1) of this section to make an order requiring that the terms and conditions of the pension scheme which shall be offered by the employer to whom the subsidiary of the National Bus Company is transferred shall not be less favourable than those which were provided for those employees by the National Bus Company scheme of which they were members.'.—[Mr. Booth.]
§ Question put, That the amendment be made:—
§ The House divided: Ayes 197, Noes 277.
759| Division No. 168] | [11.26 pm |
| AYES | |
| Abse, Leo | Coleman, Donald |
| Adams, Allen | Concannon, Rt Hon J. D. |
| Allaun, Frank | Conlan, Bernard |
| Alton, David | Cook, Robin F. |
| Anderson, Donald | Cowans, Harry |
| Archer, Rt Hon Peter | Craigen, J. M. (G'gow, M'hill) |
| Ashley, Rt Hon Jack | Crowther, Stan |
| Ashton, Joe | Cryer, Bob |
| Atkinson, H. (H'gey,) | Cunliffe, Lawrence |
| Bagier, Gordon A. T. | Cunningham, Dr J. (W'h'n) |
| Barnett, Guy (Greenwich) | Dalyell, Tam |
| Barnett, Rt Hon Joel (H'wd) | Davidson, Arthur |
| Beith, A. J. | Davies, Rt Hon Denzil (L'lli) |
| Bennett, Andrew (St'kp't N) | Davies, Ifor (Gower) |
| Bidwell, Sydney | Davis, Clinton (Hackney C) |
| Booth, Rt Hon Albert | Davis, Terry (B'ham, Stechf'd) |
| Bray, Dr Jeremy | Dean, Joseph (Leeds West) |
| Brown, Hugh D. (Provan) | Dewar, Donald |
| Brown, R. C. (N'castle W) | Dixon, Donald |
| Brown, Ron (E'burgh, Leith) | Dobson, Frank |
| Buchan, Norman | Dormand, Jack |
| Callaghan, Jim (Midd't'n & P) | Douglas, Dick |
| Campbell, Ian | Dubs, Alfred |
| Campbell-Savours, Dale | Duffy, A. E. P. |
| Canavan, Dennis | Dunwoody, Hon Mrs G. |
| Cant, R. B. | Eadie, Alex |
| Carter-Jones, Lewis | Eastham, Ken |
| Clark, Dr David (S Shields) | Ellis, R. (NE D'bysh're) |
| Cocks, Rt Hon M. (B'stol S) | English,Michael |
| Cohen,Stanley | Ennals, Rt Hon David |
| Evans, loan (Aberdare) | Moyle, Rt Hon Roland |
| Evans, John (Newton) | Newens, Stanley |
| Field, Frank | Oakes, Rt Hon Gordon |
| Fitch, Alan | O'Halloran, Michael |
| Flannery, Martin | O'Neill, Martin |
| Fletcher, Ted (Darlington) | Orme, Rt Hon Stanley |
| Ford, Ben | Palmer, Arthur |
| Forrester, John | Park, George |
| Foster, Derek | Parker, John |
| Fraser, J. (Lamb'th, N'w'd) | Parry, Robert |
| Freeson, Rt Hon Reginald | Penhaligon, David |
| Freud, Clement | Powell, Raymond (Ogmore) |
| Garrett, John (Norwich S) | Prescott, John |
| Garrett, W. E. (Wallsend) | Price, C. (Lewisham W) |
| George, Bruce | Race, Reg |
| Gilbert, Rt Hon Dr John | Rees, Rt Hon M (Leeds S) |
| Golding, John | Richardson, Jo |
| Graham, Ted | Roberts, Ernest (Hackney N) |
| Hamilton, W. W. (C'tral Fife) | Roberts, Gwilym (Cannock) |
| Hardy, Peter | Robinson, G. (Coventry NW) |
| Harrison, Rt Hon Walter | Rooker, J. W. |
| Haynes, Frank | Ross, Ernest (Dundee West) |
| Hogg, N. (E Dunb't'nshire) | Rowlands, Ted |
| Holland, S. (L'b'th, Vauxh'll) | Sever, John |
| Home Robertson, John | Sheerman, Barry |
| Huckfield, Les | Shore, Rt Hon Peter |
| Hughes, Mark (Durham) | Short, Mrs Renée |
| Hughes, Robert (Aberdeen N) | Silkin, Rt Hon J. (Deptford) |
| Hughes, Roy (Newport) | Silkin, Rt Hon S. C. (Dulwich) |
| Janner, Hon Greville | Silverman, Julius |
| Jay, Rt Hon Douglas | Skinner, Dennis |
| John, Brynmor | Smith, Rt Hon J. (N Lanark) |
| Johnson, Walter (Derby S) | Snape, Peter |
| Jones, Rt Hon Alec (Rh'dda) | Soley, Clive |
| Jones, Barry (East Flint) | Spearing, Nigel |
| Kaufman, Rt Hon Gerald | Spriggs, Leslie |
| Kerr, Russell | Stallard, A. W. |
| Kilroy-Silk, Robert | Stoddart, David |
| Lamborn, Harry | Stott, Roger |
| Leadbitter, Ted | Strang, Gavin |
| Leighton, Ronald | Straw, Jack |
| Lestor, Miss Joan | Summerskill, Hon Dr Shirley |
| Lewis, Arthur (N'ham NW) | Thomas, Dafydd (Merioneth) |
| Lewis, Ron (Carlisle) | Thomas, Dr H.(Carmarthen) |
| Litherland, Robert | Tilley, John |
| Lofthouse, Geoffrey | Tinn, James |
| Lyon, Alexander (York) | Torney, Tom |
| McCartney, Hugh | Urwin, Rt Hon Tom |
| McDonald, Dr Oonagh | Varley, Rt Hon Eric G. |
| McElhone, Frank | Wainwright, B. (Dearne V) |
| McKay, Allen (Penistone) | Walker, Rt Hon H. (D'caster) |
| McKelvey, William | Watkins, David |
| McNamara, Kevin | Welsh, Michael |
| McTaggart, Robert | White, Frank R. |
| McWilliam, John | White, J. (G'gow Pollok) |
| Marks, Kenneth | Whitehead, Phillip |
| Marshall, D (G'gow S'ton) | Whitlock, William |
| Marshall, Jim (Leicester S) | Wigley, Dafydd |
| Martin, M (G'gow S'burn) | Williams, Rt Hon A. (S'sea W) |
| Mason, Rt Hon Roy | Williams, Rt Hon Mrs |
| Maxton, John | (Crosby) |
| Maynard, Miss Joan | Wilson, William (C'try SE) |
| Meacher, Michael | Winnick, David |
| Mikardo, Ian | Woodall, Alec |
| Millan, Rt Hon Bruce | Woolmer, Kenneth |
| Miller, Dr M. S. (E Kilbride) | Wright, Sheila |
| Mitchell, R. C. (Soton Itchen) | Young, David (Bolton E) |
| Morris, Rt Hon A. (W'shawe) | |
| Morris, Rt Hon C. (O'shaw) | Tellers for the Ayes: |
| Morris, Rt Hon J. (Aberavon) | Mr. James Hamilton and |
| Morton, George | Dr. Edmund Marshall. |
| NOES | |
| Adley, Robert | Atkins, Rt Hon H.(S'thorne) |
| Aitken, Jonathan | Atkinson, David (B'm'th,E) |
| Alexander, Richard | Baker, Kenneth (St. M'bone) |
| Alison, Rt Hon Michael | Baker, Nicholas (N Dorset) |
| Ancram, Michael | Banks, Robert |
| Arnold, Tom | Beaumont-Dark, Anthony |
| Aspinwall, Jack | Bendall, Vivian |
| Benyon, Thomas (A'don) | Gow, Ian |
| Benyon, W. (Buckingham) | Gray, Hamish |
| Best, Keith | Greenway, Harry |
| Bevan, David Gilroy | Griffiths, E. (B'y St. Edm'ds) |
| Biffen, Rt Hon John | Griffiths, Peter Portsm'th N) |
| Biggs-Davison, Sir John | Grist, Ian |
| Blackburn, John | Grylls, Michael |
| Blaker, Peter | Gummer, John Selwyn |
| Body, Richard | Hamilton, Hon A. |
| Bonsor, Sir Nicholas | Hamilton, Michael (Salisbury) |
| Boscawen, Hon Robert | Hampson, Dr Keith |
| Bottomley, Peter (W'wich W) | Hannam, John |
| Bowden, Andrew | Haselhurst, Alan |
| Boyson, Dr Rhodes | Havers, Rt Hon Sir Michael |
| Braine, Sir Bernard | Hawkins, Paul |
| Bright, Graham | Hayhoe, Barney |
| Brinton, Tim | Heddle, John |
| Brittan, Rt. Hon. Leon | Henderson, Barry |
| Brooke, Hon Peter | Hicks, Robert |
| Brown, Michael (Brigg & Sc'n) | Higgins, Rt Hon Terence L |
| Bruce-Gardyne, John | Hill, James |
| Bryan, Sir Paul | Hogg, Hon Douglas (Gr'th'm) |
| Buchanan-Smith, Rt. Hon. A. | Holland, Philip (Carlton) |
| Buck, Antony | Hooson, Tom |
| Budgen, Nick | Hordern, Peter |
| Bulmer, Esmond | Howell, Rt Hon D. (G'ldf'd) |
| Burden, Sir Frederick | Howell, Ralph (N Norfolk) |
| Butcher, John | Hunt, David (Wirral) |
| Cadbury, Jocelyn | Irving, Charles (Cheltenham) |
| Carlisle, John (Luton West) | Johnson Smith, Geoffrey |
| Carlisle, Kenneth (Lincoln) | Jopling, Rt Hon Michael |
| Carlisle, Rt Hon M. (R'c'n) | Joseph, Rt Hon Sir Keith |
| Chalker, Mrs. Lynda | Kaberry, Sir Donald |
| Channon, Rt. Hon. Paul | Kellett-Bowman, Mrs Elaine |
| Chapman, Sydney | Kershaw, Sir Anthony |
| Churchill, W. S. | Kimball, Sir Marcus |
| Clark, Hon A. (Plym'th, S'n) | King, Rt Hon Tom |
| Clark, Sir W. (Croydon S) | Kitson, Sir Timothy |
| Clarke, Kenneth (Rushcliffe) | Knight, Mrs Jill |
| Clegg, Sir Walter | Knox, David |
| Cockeram, Eric | Lang, Ian |
| Cope, John | Langford-Holt, Sir John |
| Corrie, John | Latham, Michael |
| Costain, Sir Albert | Lawrence, Ivan |
| Cranborne, Viscount | Lee, John |
| Critchley, Julian | Lennox-Boyd, Hon Mark |
| Crouch, David | Lester, Jim (Beeston) |
| Dean, Paul (North Somerset) | Lewis, Kenneth (Rutland) |
| Dickens, Geoffrey | Lloyd, Ian (Havant & W'loo) |
| Dorrell, Stephen | Lloyd, Peter (Fareham) |
| Douglas-Hamilton, Lord J. | Loveridge, John |
| Dover, Denshore | Luce, Richard |
| du Cann, Rt Hon Edward | Lyell, Nicholas |
| Dunn, Robert (Dartford) | McCrindle, Robert |
| Durant, Tony | Macfarlane, Neil |
| Eden, Rt Hon Sir John | MacGregor, John |
| Eggar, Tim | MacKay, John (Argyll) |
| Elliott, Sir William | Macmillan, Rt Hon M. |
| Emery, Sir Peter | McNair-Wilson, M. (N'bury) |
| Eyre, Reginald | McNair-Wilson, P. (New F'st) |
| Fairgrieve, Sir Russell | McQuarrie, Albert |
| Faith, Mrs Sheila | Madel, David |
| Farr, John | Major, John |
| Fenner, Mrs Peggy | Marland, Paul |
| Fletcher-Cooke, Sir Charles | Marlow, Antony |
| Fookes, Miss Janet | Marshall, Michael (Arundel) |
| Forman, Nigel | Marten, Rt Hon Neil |
| Fowler, Rt Hon Norman | Maude, Rt Hon Sir Angus |
| Fox, Marcus | Mawby, Ray |
| Fraser, Peter (South Angus) | Mawhinney, Dr Brian |
| Fry, Peter | Maxwell-Hyslop, Robin |
| Gardiner, George (Reigate) | Mellor, David |
| Gardner, Edward (S Fylde) | Meyer, Sir Anthony |
| Garel-Jones, Tristan | Miller, Hal (B'grove) |
| Gilmour, Rt Hon Sir Ian | Mills, Iain (Meriden) |
| Glyn, Dr Alan | Mills, Peter (West Devon) |
| Goodhart, Sir Philip | Miscampbell, Norman |
| Goodhew, Sir Victor | Mitchell, David (Basingstoke) |
| Goodlad, Alastair | Moate, Roger |
| Gorst, John | Monro, Sir Hector |
| Montgomery, Fergus | Skeet, T. H. H. |
| Morgan, Geraint | Smith, Dudley |
| Morris, M. (N'hampton S) | Speed, Keith |
| Morrison, Hon C. (Devizes) | Speller, Tony |
| Morrison, Hon P. (Chester) | Spence, John |
| Mudd, David | Spicer, Michael (S Worcs) |
| Murphy, Christopher | Sproat, Iain |
| Myles, David | Squire, Robin |
| Neale, Gerrard | Stainton, Keith |
| Needham, Richard | Stanbrook, lvor |
| Nelson, Anthony | Stanley, John |
| Neubert, Michael | Steen, Anthony |
| Newton, Tony | Stevens, Martin |
| Normanton, Tom | Stewart A (ERenfrewshire) |
| Onslow, Cranley | Stewart, Ian (Hitchin) |
| Oppenheim, Rt Hon Mrs S. | Stokes, John |
| Page, John (Harrow, West) | Stradling Thomas, J. |
| Page, Richard (SW Herts) | Tapsell, Peter |
| Parkinson, Rt Hon Cecil | Taylor, Teddy (S'end E) |
| Parris, Matthew | Temple-Morris, Peter |
| Patten, John (Oxford) | Thomas, Rt Hon Peter |
| Pattie, Geoffrey | Thompson, Donald |
| Pawsey, James | Thorne, Neil (Ilford South) |
| Percival, Sir Ian | Thornton, Malcolm |
| Peyton, Rt Hon John | Townend, John (Bridlington) |
| Pink, R, Bonner | Townsend, Cyril D. (B'heath) |
| Pollock, Alexander | Trotter, Neville |
| Porter, Barry | Van Straubenzee, Sir W. |
| Prentice, Rt Hon Reg | Vaughan, Dr Gerard |
| Proctor, K, Harvey | Viggers, Peter |
| Raison, Rt Hon Timothy | Waddington, David |
| Rathbone, Tim | Wakeham, John |
| Rees, Peter (Dover and Deal) | Waldegrave, Hon William |
| Rees-Davies, W. R. | Wall, Sir Patrick |
| Renton, Tim | Waller, Gary |
| Rhodes James, Robert | Ward, John |
| Rhys Williams, Sir Brandon | Warren, Kenneth |
| Ridley, Hon Nicholas | Watson, John |
| Ridsdale, Sir Julian | Wells, John (Maidstone) |
| Rifkind, Malcolm | Wheeler, John |
| Roberts, M, (Cardiff NW) | Whitney, Raymond |
| Roberts, Wyn (Conway) | Wickenden, Keith |
| Rossi, Hugh | Wiggin, Jerry |
| Rost, Peter | Wilkinson, John |
| Royle, Sir Anthony | Williams, D, (Montgomery) |
| Sainsbury, Hon Timothy | Winterton, Nicholas |
| St, John-Stevas, Rt Hon N. | Wolfson, Mark |
| Shaw, Giles (Pudsey) | Young, Sir George (Acton) |
| Shaw, Michael (Scarborough) | Younger, Rt Hon George |
| Shelton, William (Streatham) | |
| Shepherd, Colin (Hereford) | Tellers for the Noes: |
| Shepherd, Richard | Mr. Anthony Berry and |
| Silvester, Fred | Mr. Carol Mather. |
| Sims, Roger |
§ Question accordingly negatived.
§ Mr. BoothI beg to move amendment No. 13, in page 5, line 3, at end insert—
`(c) to transfer the ex gratia payments in respect of periods of non-pensionable service to provide additional benefits to employees who are members of pension schemes other than the NBPF and the BEST scheme into contractual obligations on the related company to sustain these payments.'.The amendment raises an entirely different issue from any that we have discussed on pensions. I hope that the Minister will accept that it does not challenge the discretion of the Secretary of State to make orders transferring pensions. It does not bite upon that part of the clause. The amendment merely adds to the list of things in subsection (6) that he can cover by order if he decides to make an order to transfer pensions. We are asking him to take a discretionary power against the possibility of a situation arising in which he will be convinced that such a power is necessary.760 The purpose of the amendment is to give the Secretary of State the power, if he chooses to use it, to transfer pensions that are covered by ex gratia payments currently made by the National Bus Company into certain employees' pension funds. In the main, those employees are people who are not covered by the two principal pension funds of the National Bus Company. I understand that they are mostly people who transferred to the NBC from other public service operators, probably from London Country Bus Services Ltd. and from London Transport. Therefore, they are in a particular and special condition.
I hope that the Secretary of State and my hon. Friends and I will be satisfied that when such employees are transferred it is possible to make arrangements for them without using this power. The amendment would in no way tie the hands of the Secretary of State, and it would leave him with discretion or power, if he was dissatisfied with what happened to those covered by these ex gratia payment schemes, to transfer some of the payments that have already been paid on their behalf bythe NBC to the other employer, at the same time placing an obligation on that employer to maintain some of those transferred employees' pension rights.
§ Mrs. ChalkerI shall say a word about the background to the amendment.
Most NBC employees are members of one of the company's two main pension schemes, the National Bus pension fund and the bus employees superannuation trust, but some remain in old pension schemes that do not provide the same level of benefits as NBPF and BEST. It has, however, become the NBC's customary practice to provide some additional benefits under the old schemes, notwithstanding the fact that the schemes were not funded. In addition, the NBC already makes some ex gratia payments in respect of periods of non-pensionable service.
A small number of employees who benefit from the NBC's present customary practices may become employees of a subsidiary which is to be privatised. If so, their pensions will fall to be considered along with those of employees who are members of the NBPF and BEST schemes. I am sure that the NBC would wish to ensure that they received equitable treatment, as would their trade union representatives.
Let me make it quite clear that if the NBC felt that the best way of resolving matters would be to convert what are now ex gratia payments into legal obligations, it would be open to it to do so. It will be for the bus company in the first instance to determine the related company's pension arrangements, and it could build into the new scheme legal obligations to provide benefits equivalent to the ex gratia payments, if it judged that to be the best course, having regard to the interests both of employees and of potential purchasers. Under clause 5, the Secretary of State's power to make pensions orders would be available to help sort out any difficulties in winding up the customary practices.
The initiative, and the means of converting customary practices into legal obligations, would, however, rest with the NBC, and not with the Secretary of State. That, indeed, is the essential reason why we cannot accept this amendment. Unlike section 74 itself, the amendment would imply that the Secretary of State could of his own initiative make orders to convert discretionary payments into legal obligations, and impose them on a private 761 company. That, in our view, would be unwarranted interference with the well-established rules that govern occupational pension arrangements in the private sector.
To sum up, we are by no means opposed to the conversion of ex gratia payments into legal obligations, and we would be prepared to use the Secretary of State's order-making powers to ease the transition. But the right to determine whether such conversion should take place should rest with NBC and the private company, in negotiation with employee representatives. It is not a matter for the Government. I therefore ask the House to reject the amendment, if the right hon. Gentleman does not withdraw it. Let me make it clear to the right hon. Gentleman that there is nothing to prevent what he wishes to happen from happening, but it should happen at the behest of the NBC with the agreement of the employees' representatives. It should not be imposed by the Government.
§ Mr. BoothOnly in the rare case that the hon. Lady has mentioned of the current ex gratia payment schemes being converted into liabilities and obligations would there be a specific power covered by the Bill to make the transfer. We do not believe that that is a satisfactory way of dealing with the matter. It would be far better to face the matter openly and to leave the Secretary of State with the discretion, but, for reasons that hon. Members will understand, I do not intend to press the issue further tonight. I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.