HL Deb 28 October 1997 vol 582 cc975-7

3.3 p.m.

Lord Thomson of Monifiethasked Her Majesty's Government:

What steps they are taking to implement the ruling of the Pensions Ombudsman in September 1996 regarding the distribution of the surplus of the Bus Employees Superannuation Trust to employees of the privatised National Bus Company.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman)

My Lords, the Pensions Ombudsman's determination required the pension fund trustees to seek recovery of the surplus paid to the Department of Transport in 1990. The previous government offered, in November 1996, to fund an action to put these complex matters before the courts. The trustees accepted that offer. A writ has now been served and the statement of claim is expected shortly. We are studying the legal and other background to the issue and will take legal advice on the claim when it is received before deciding the best way forward.

Lord Thomson of Monifieth

My Lords, I thank the Minister for the rather thoughtful note in her final sentence. Is she aware that the Government, when in Opposition, felt strongly that the pensioners of the former National Bus Company—to use the words of the then Shadow Minister, now the Minister— were the victims of a squalid debacle? Would it not be wiser for the new Government, as my noble friend Lord Russell suggested in a debate on pensions the other day, to make a new start in this matter? Will they accept the view of the Pensions Ombudsman, call off the legal action—which will cost a good deal of taxpayers' money—and enable those pensioners to enjoy the surplus to which they are entitled while they are still alive?

Baroness Hayman

My Lords, I understand the concerns expressed by the noble Lord, and felt very strongly by the pensioners. In Opposition, we acknowledged those strong concerns. We are well aware that they are equally deeply felt at the moment. No commitment was made in terms of repayment of the surplus. The ruling of the Pensions Ombudsman related to the trustees themselves. This is a complicated issue. It has a long history and involves decisions taken under the previous government. We have to consider all the aspects carefully and take proper legal advice before coming to a view on how to deal with the problem that we have inherited.

Lord Marsh

My Lords, does the issue relate to who owns the surplus? If so, some clear legal ruling on it is long overdue.

Baroness Hayman

My Lords, the Pensions Ombudsman's direction was to the trustees to seek repayment of the surplus that had been paid over to the Government. We need to consider carefully, in the light of the writ that has been issued and served and the statement of claim, what the Government's response should be.

Lord Taylor of Gryfe

My Lords, this is a much delayed process. Will the collapse of the Stock Market have any detrimental effect on the entitlement of the pensioners concerned?

Baroness Hayman

My Lords, I am always extremely nervous of making any comment on the ramifications of the Stock Market. The issue relates to the sum of money that was repaid to the Government. That should not be affected by anything that is happening in the Stock Market at present.

Lord Mackay of Ardbrecknish

My Lords, is the Minister aware that I welcome her more cautious approach to this issue than her party showed when in Opposition. Is not the problem that the ruling of Dr. Julian-Farrand flies in the face of the agreement made in 1986 indicating that after certain accrued benefits had been paid to members of the pension fund, and the pension fund was inflated by more than the RPI, if there was any deficit the Government would make that up and any surplus would go to the Government? Surely it is those two aspects of this bargain that are important and appear to have been ignored by the Pensions Ombudsman.

Baroness Hayman

My Lords, I should not wish to suggest that those arguments, which have been advanced by the noble Lord in the past, were ignored by the Pensions Ombudsman. He came to a decision and made his ruling in full knowledge of the agreement that was made on the terms that the noble Lord described. The issue now is what the appropriate government response to that ruling should be. It is not at all unusual for the Pensions Ombudsman's decisions, because of their technical and complex nature, to be referred to the courts for clarification. That is one of the options to be considered.

Lord Thomson of Monifieth

My Lords, I am grateful for the careful language that the Minister uses. I should not wish to use any exaggerated language. However, in the case of the new Government, there is a certain question of honour involved. Does the Minister agree that, on examination, this is a rather unhappy story? When the privatisation took place and decisions were taken about the pension fund, the trustees who were appointed and who took the decision to hand the surplus over to the Treasury were government officials. Is the Minister aware that the lawyers dealing with the matter were on both sides of the case? It is an unhappy case and given the view that the Government took when in Opposition, they would be well advised to make a fresh start.

Baroness Hayman

My Lords, I understand the points that the noble Lord raises—although I must point out that the trustees who came to the arrangement described by the noble Lord, Lord Mackay of Ardbrecknish, were the original trustees of the pension fund. The strong feelings on that aspect are understood. As a new Government we are undertaking the responsibility of examining the issue—which is complex and involves a large sum of money—properly and in the round before taking a decision.