HL Deb 07 December 1993 vol 550 cc812-4

2.47 p.m.

Lord Peyton of Yeovil asked Her Majesty's Government:

Whether the outstanding issues between the Department of Transport and the British Rail Pension Fund trustees have been satisfactorily settled in accordance with the terms of the memorandum of understanding signed by a Minister of the Crown and the chairman of the pension fund trustee company.

Viscount Goschen

My Lords, discussions on these complex matters are continuing with the British Rail Pension Trustee Company and the British Rail board. The latest meeting took place on Friday last. The Government intend to honour the terms of the memorandum of understanding.

Lord Peyton of Yeovil

My Lords, my first reaction is to inquire and to wonder what offence my noble friend committed in order to find himself in the unhappy position of having to answer for the sins and shortcomings of others. However, will he be good enough to convey to his right honourable friends a reminder that the chairman of the trustees would never and could never have signed the memorandum of understanding had it not contained a requirement of the trustees' agreement to any re-phasing of the payments into the closed fund? Even less could he have done so had he realised at the time that the Government had in mind to postpone all capital payments into the fund until the year 2000?

Viscount Goschen

My Lords, it is important to note that rail pensioners have secured a very good deal indeed. Not only will they have the absolute security of an index-linked guarantee, but they will also be able to enjoy a distribution resulting from any available surplus. The memorandum of understanding made it clear that there might be a case for rescheduling government support payments once that guarantee was in place.

Lord Taylor of Gryfe

My Lords, as a former trustee of the fund perhaps I may ask the Minister whether he is aware that the pensioners are deeply indebted, as is this House, for the concern shown by the noble Lord, Lord Peyton of Yeovil. In the light of our experience in dealing with this matter—it consumed a great deal of time and involved the House in intricate discussions—are any lessons being learnt by the Government in regard to the proposed privatisation of British Coal where the pension fund situation is somewhat similar?

Viscount Goschen

My Lords, I welcome the noble Lord's comments that the rail pensioners have come out with a very good deal indeed—and through the normal parliamentary process.

Lord Clinton-Davis

My Lords, will the Minister confirm, since the discussions are continuing, that the trustees remain deeply concerned? Otherwise, there would be no point in continuing the discussions. Can he summarise the nature of those current concerns on the part of the trustees'?

Viscount Goschen

My Lords, first, progress has been made in the discussions through the agreement of principles that should be satisfied in any new payment arrangements. The Government must safeguard the taxpayers' interest. It would not be right to put money into the closed scheme if it is not needed. On the other hand, the trustees have a fiduciary duty to protect the interests of the pension scheme members. That is the point that the negotiations have reached.

Lord Clinton-Davis

My Lords, with the greatest respect in the world, the Minister has not answered my question. Will he summarise the nature of the concerns being expressed by the trustees? That is a matter of some concern to the House, but most particularly to the trustees and the pensioners.

Viscount Goschen

My Lords, I did summarise the present situation and what was happening in regard to the discussions. The discussions are going on. It is in the interests of both sides to reach agreement as soon as possible.

Lord Skelmersdale

My Lords, whatever may have happened in the past, is it not a fact that the existing pensioners are well satisfied with the Government's arrangements and that the concern is for future pensioners? Does the Minister agree that that concern forms the basis for the discussions?

Viscount Goschen

My Lords, the discussions are concerned with the Government's support payments to the closed pension fund, which takes care of existing rail pensioners rather than future ones.

Lord Shepherd

My Lords, thanks to the noble Lord we have now got down to the main issue. The matter was discussed in this House. As the noble Viscount will remember, at the end of the discussion we took the advice and the assurances of the noble Earl, Lord Caithness. When conclusions have been reached between the Government and the trustees, will the Government come forward with a paper so that we can then see exactly what those conclusions are? We shall then be able to make a judgment as to whether the noble Lord is right when he says that the pensioners have had a good deal.

Viscount Goschen

My Lords, I note the comments of the noble Lord. I shall refer his constructive suggestion to my right honourable friend.

Lord Ezra

My Lords, the noble Lord, Lord Taylor of Gryfe, paid tribute to the role played by the noble Lord, Lord Peyton, in raising this issue and in pursuing it so vigorously. I echo that tribute from these Benches. Whether or not that will help the noble Lord, Lord Peyton, in his future political career I do not know. In respect of the debates that we are due to have on the coal industry—a matter also raised by the noble Lord, Lord Taylor of Gryfe—have approaches been made to the trustees of the coal industry pension fund and is the intention to try to reach a suitable agreement with them so that we can be informed of it in good time for our debates?

Viscount Goschen

My Lords, that is a different question. No doubt appropriate discussions will take place.

Lord Peyton of Yeovil

My Lords, how can the Government maintain that they will honour the terms of the memorandum of understanding when they have refused to be bound by the requirement that the trustees' agreement should be obtained to any re-phasing of payments? It is a simple question, but others besides the noble Viscount are finding it very difficult to answer. Perhaps he can get them to do so.

Viscount Goschen

My Lords, we fully intend to comply with the terms of the memorandum of understanding. Consequently, we are engaged in discussions with the trustee company board to seek to reach agreement on all outstanding issues.