LORDS AMENDMENT

HL Deb 04 July 1994 vol 556 cc998-1000

23 Schedule 5, page 102, line 50, leave out sub-paragraph (4) and insert:

("(3A) The modifications of an existing scheme that may be made by regulations under this paragraph shall include modifications making such provision as the Secretary of State considers appropriate for cases where either—

1. (a) there are assets of the scheme representing a relevant surplus, or
2. (b) the assets of the scheme are insufficient for meeting pension obligations under the scheme.

(3B) The modifications mentioned in sub-paragraph (3A) above may contain—

1. (a) provision for a relevant surplus, and the assets representing it, to be apportioned between—
1. (i) the part (if any) of the surplus which is to be retained in a reserve ("an investment reserve") as an asset of the scheme, and
999
2. (ii) the remainder ("the distributable part") of the surplus;
2. (b) provision for the management of assets representing an investment reserve and for the manner in which any such assets are to be applied;
3. (c) provision for income accruing in respect of assets representing an investment reserve to be added to the reserve;
4. (d) provision for the manner in which assets representing the distributable part of a relevant surplus are to be applied; and
5. (e) provision, for the purposes of any provision under paragraphs (a) to (d) above, for modifying any decisions as to the way in which relevant surpluses determined as at times before the restructuring date, and the assets representing any such surpluses, are to be treated.

(3C) The provision as to the apportionment of any surplus or assets to an investment reserve that may be contained in modifications made by virtue of sub-paragraph (3A) above shall not include any provision authorising the allocation to such a reserve of any part of a surplus determined as at a time after 31st March 1994, or of any assets representing any part of such a surplus, except where the allocation is made for making good amounts that would have been comprised in the value of the reserve if assets representing any part of it had not been applied from the reserve in meeting a deficiency that arose as at any time by reason of the other assets of the scheme having been insufficient as at that time for meeting pension obligations under the scheme.

(3D) The provision as to the application of assets representing an investment reserve that may be contained in modifications made by virtue of sub-paragraph (3A) above shall include provision for the Secretary of State to become entitled where—

1. (a) any such arrangements as are mentioned in sub-paragraph (5) below have been entered into in relation to pension obligations under the scheme in question, and
2. (b) the value of the assets representing the reserve exceeds the aggregate amount required for the purposes for which the reserve has been retained,
• to assets of the scheme representing the amount of the excess or, where those purposes have ceased, the value of the reserve.

(3E) The provision as to the application of assets representing the distributable part of a relevant surplus that may be contained in modifications made by virtue of sub-paragraph (3A) above shall include provision for the Secretary of State to become entitled where—

1. (a) the surplus is one determined as at a time on or after 31st March 1994, and
2. (b) any such arrangements as are mentioned in sub-paragraph (5) below have been entered into in relation to pension obligations under the scheme in question,
• to assets of the scheme representing no more than one half of the distributable part of that surplus.")

The Commons agreed to this amendment and proposed the following amendment to it—

23A Schedule 5, line 33, leave out 'that' and insert 'which (apart from any entitlement for which provision is made by virtue of sub-paragraph (3D) below)'.

Lord Strathclyde

My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 23A to Lords Amendment No. 23. Amendment No. 23A clarifies the operation of the investment reserve under the guarantee arrangements for the coal pension schemes. The amendment is consistent with policies agreed with the trustees and has their support. It provides that any payments from fund surpluses into the investment reserve to make good previous deficiency payments made out of the reserve should be set equal to those deficiency payments plus or minus any gains or losses which would have accrued to the reserve if (he deficiency payments had not been made. I commend the amendment to the House.

Moved, That the House do agree with the Commons in their Amendment No. 23A to Lords Amendment No. 23.—(Lord Strathclyde.)

Lord Morris of Castle Morris

My Lords, those noble Lords, and those right honourable and honourable ladies and gentlemen in another place who worked so tirelessly and vigilantly for the protection of pensioners when the rail transport Bill recently endured such a rough ride through the Houses of Parliament, have placed the miners considerably in their debt. For I have heard it said in private, and from a wide variety of sources, that after the prolonged and savage mauling the Government took on the question of pension provision for railway workers, the word went out that this must never be endured again, especially on the matter of coal privatisation. The note was, "We cannot go through that again, so, whatever they want, give it to them''.

Nevertheless, even supposing that such behind-the-scenes orders were ever issued, it has taken the trustees of the two main pension funds in the mining industry a long time and a great deal of effort to ensure that just and proper provisions are enshrined in law for all workers in the mining industry. The Government's negotiators did not give in easily or soon.

When this Bill left your Lordships' House we thought the clauses relating to pensions were sufficient, agreed and watertight. It seems that in this one particular we were wrong, and the Government have come back to your Lordships with a correction in the drafting. None of us picked it up last time; we are all equally to blame; this amendment to your Lordships' amendment puts things right. We support it.

Lord Ezra

My Lords, I too support the amendment. I should like to add that I think that the way in which the pensions issue has been dealt with in the case of the coal industry has been a model for such discussions. I hope that it will be followed in the future, should such similar circumstances arise, as opposed to the unfortunate altercations that we had over the railway pension scheme, in which the noble Lord, Lord Peyton, played such a part. I should like to feel that one aspect at any rate of this privatisation measure which will fill people with satisfaction will be the way with which the pensioners have been dealt.

3.30 p.m.

Lord Peyton of Yeovil

My Lords, those words of the noble Lord, Lord Ezra, must be music in the ears of my noble friend. My noble friend deserves more credit than he was given by the noble Lord, Lord Morris of Castle Morris. I feel sure that my noble friend played a major role—perhaps enlightened self-interest had some part to play—having listened to protracted and what should have been unnecessary debates on railway pensions, in saying that such a thing would not recur. We owe him a debt of gratitude.

On Question, Motion agreed to.