HL Deb 18 March 1993 vol 543 cc1543-4

3.8 p.m.

Lord Ezra asked Her Majesty's Government:

What are their intentions with regard to the pension funds of British Rail and British Coal, if those industries should be privatised.

The Minister of State, Department of Transport (The Earl of Caithness)

My Lords, we have given assurances that we intend that the pension entitlements of serving employees and pensioners will be safeguarded on the privatisation of British Rail and British Coal.

Lord Ezra

My Lords, I thank the noble Earl for repeating the assurances previously made. Nevertheless, is he aware that there has been public disquiet about the possibility that the Government might take over that part of the pension funds of the coal and rail schemes relating to pensioners and deferred pensions? Is the Minister aware that there are, in fact, about 700,000 persons involved of whom I am one? Is he further aware that their concern is that if that takeover were to happen they could be deprived of benefit improvements which might otherwise accrue to them? In those circumstances, can the Minister give an assurance that, in the event of privatisation, no firm proposals will be made for dealing with those funds without full consultation with the trustees concerned?

The Earl of Caithness

My Lords, let me make it absolutely clear that in no way would we countenance the pension scheme funds being used for purposes other than for paying for pensions.

Lord Clinton-Davis

My Lords, is the Minister aware that, following the betrayal of retirement pensioners and the poor by the VAT impost on fuel bills, coupled with a succession of broken pledges which were given at the election, the people of this country have absolutely no faith in assurances given by Ministers about anything at this stage? Does he not agree that it is imperative, as regards the kinds of assurances which he has given this afternoon, that existing pension schemes need to be secured by statute? Therefore, will the Minister give the House an assurance that the Government will in fact be supporting the amendment to Clause 116 of the Railways Bill, which is being moved in another place by the Labour Opposition, to achieve precisely that objective?

The Earl of Caithness

My Lords, what is for another place is for another place.

Lord Clinton-Davis

My Lords, will the Minister therefore give an assurance that those rights will be protected not by verbal assurances from him and his colleagues but by statute?

The Earl of Caithness

My Lords, the noble Lord heard what I said clearly in my first Answer. They will be safeguarded. A Bill will be coming—

Lord Clinton-Davis

My Lords, by statute?

The Earl of Caithness

My Lords, a Bill will be coming before your Lordships' House.

Lord Barnett

My Lords, I wonder whether the Minister can add to the assurance that he has given, which I welcome, the assurance that if there is an actuarial surplus in those funds the Government have no intention of taking it for themselves?

The Earl of Caithness

My Lords, a surplus was disclosed on the 1990 revaluation of the main BR scheme. It was allocated between the pensioners, the current contributors and BR. A further valuation takes place in April of this year. If a surplus is disclosed, it will be allocated in exactly the same way.

Lord Stoddart of Swindon

My Lords, but suppose there is an actuarial deficit, will the Government guarantee that?

The Earl of Caithness

My Lords, if there is an actuarial deficit, we will be advised on the appropriate method of bringing the pension fund back into balance.

Lord Ezra

My Lords, could the noble Earl give me the assurance about consultations with the trustees for which I asked?

The Earl of Caithness

My Lords, as the noble Lord knows, a consultation document is out on the British Rail pension fund. We have received a number of replies to that paper. The consultation period ended in early March—on 8th March, I believe—and I understand that the trustees were fully informed.