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Mr. Prescott : One employer. I thank the Minister.
In the process of their changing--for whatever reason--from one company to another, an employee's conditions of employment can be changed, which is what is suggested in the amendment. Where such changes take place, compensation will be paid. In that situation, I presume that it will be paid by the taxpayer.
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There is a fear--I believe that it has some substance--in relation to people who may be transferred from one company to another in the reorganisation of the industry prior to privatisation clearly being transferred from one undertaking to another. It may well be a judgment that that undertaking--track authority, say--decides that it wants to keep only X per cent. of the employees, or wants them to go to another company. If the worker does not accept that, he would receive compensation under the Bill.
Where Gatwick drivers did not want to spend 100 per cent. of their time driving the Gatwick route, which is one of the cases at the moment where the first shadow franchise is in operation, the drivers on those trains were entitled to move anywhere in the system. However, I presume that the shadow company can now say to an employee, "You will have to work for us 100 per cent." If that employee does not want to, disagreement can be registered between the employee and employer. If the employee is not prepared to accept the new conditions of employmenensation. Those complexities come directly out of the reorganisation and they threaten the certainties of people's employment rights.
There is another matter that causes some concern, and on which I want to question the Minister. Concern has been expressed that the Government may have the possibility of causing reorganisation and changes in conditions of employment prior to privatisation. That is an act of transfer that will not necessarily guarantee compensation. Some railway employees feel that that is the intention of the reorganisation. Will the Minister reassure us that any changes or reorganisation which take place prior to the privatisation will be covered entirely by the regulations, and guarantee employees their rights, as was intended in clause 82?
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I believe that clause 82 is being removed and replaced with an amendment under TUPE which has no statutory guarantee in the Bill. The scope is being widened to cover other groups of people who would not have been covered by clause 82. Will the Minister say whether in that matter, which is highly technical but has considerable consequences for employees, he considers that shadow companies will seek to reorganise the labour force--reduce it if necessary, or get rid of workers--ready for what might be considered to be a move away from full-time to part-time labour by the new company?Finally, does the Minister have any estimate of what the compensation is likely to cost the taxpayer? I recall one other taxpayer's guarantee in the reorganisation contained in the Dock Work Act 1989. The Government's estimate at the time was something like £20 million, but it turned out to be about £200 million--all to return the docks to another kind of casual labour, which we are beginning to see develop in the docks.
Mr. Freeman : The hon. Member for Kingston upon Hull, East (Mr. Prescott) asked me four questions. The hon. gentleman is right to say that in Committee the law had not clearly resolved the problem of distinguishing between commercial and non-commercial undertakings that were being transferred. But we now have the Trade Union Reform and Employment Rights Act 1993, section 33 of which resolves that issue. I can therefore assure the hon. Gentleman that clause 137(6) of the Railways Bill now applies TUPE. It applies the new provisions in the 1993 Act and there should be no cause for any concern or ambiguity.
On the hon. Gentleman's second point on concessionary travel, my hon. Friend the Minister for Transport in London would have said had we discussed it, and on numerous other occasions has given assurances, that we regard the concessionary travel arrangements as covered by TUPE, so they cannot be abridged. The responsibility of employers to maintain the concessionary travel arrangements is clear under the law. The franchising director has the power to enable that duty on the part of employers to become effective, and he will do that through the train companies that will operate.
Mr. Prescott : Does that mean that the employer will have to buy those concessionary passes? For example, when Sealink was privatised, there was a concessionary fare right and Sealink had to buy that right from British Rail to provide the concessionary passes to the people. If the franchising director has the power of enforcement, will it be a condition of the franchise that those concessionary passes are purchased and that, if they are not, the employees can take action against the franchisee as being in breach of the franchise agreement?
Mr. Freeman : The arrangement proposed is that the railway companies, on behalf of their employees, will make a payment to the franchising director, and that companies carrying the employees of other companies will reflect the cost of doing that in their franchise bids for subsidy. We will be happy to set that out more fully at the appropriate time, but I can assure the House that there is no intention to make any significant change. I do not foresee any change in the concessionary travel arrangements.
Mr. Wilson : The change that has been effected by the removal of clause 82 is not technical but substantive. The
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main difference is that, if TUPE was positively written into the Bill, TUPE would apply--end of story. However, where TUPE is not specifically written into the Bill, every case will be considered on its merits. The basis of TUPE is that every case is different. That is what the case law shows. Every successor employer who seeks to demonstrate that TUPE does not apply will be able to turn that into a legal marathon in order to do so. Therefore, rather than TUPE having a clear-cut application in every case, it will be up to the employees to prove that TUPE applies in any specific case.Mr. Freeman : I do not believe that that is a fair representation of the position. Clause 137 clearly shows that the provisions of TUPE shall apply in the changes that will affect the railway industry. As to how each individual is affected and how he might make claims, I am sure that the hon. Gentleman is right. That is the process of the law. But I am certain that, because we have put the application of TUPE on the face of the Bill, that will remove any doubt. The third question put by the hon. Member for Kingston upon Hull, East was whether there would be any effect on national terms conditions of employment. I am happy to give him an unqualified assurance that there will be no such effect in terms of the provisions of amendment No. 253 which foreshadows the introduction of a new clause as a result of the assignment, which I hope will be voluntary, of individuals to one particular undertaking within British Rail where they work for two or more.
The hon. Gentleman then asked about shadow franchises and whether they would be a mechanism for getting rid of staff. No, this is a genuine attempt to clarify the full-time employment of individuals so that the provisions of TUPE can apply.
If there are continuing concerns on the part of the unions, to which I have already written twice and with which I have had two meetings, I should be happy to have further meetings or correspondence, and perhaps the hon. Gentleman will encourage them to write to me. I hope that, with those remarks, the House will see fit to approve the Lords amendment.
Question put and agreed to.
Subsequent Lords amendments agreed to.
Clause 121
Pensions.
Lords amendment : No. 295, in page 121, line 32, at end insert-- ("( ) Nothing in this Act shall relieve the Secretary of State of any duty imposed by section 52D(2) of the Transport Act 1980.")
Mr. MacGregor : I beg to move, That this House doth disagree with the Lords in the said amendment.
Mr. Deputy Speaker : With this, it will be convenient to take the following : Lords amendments Nos. 410 to 415, Lords amendment No. 416, Government amendment (a) thereto, and Lords amendment No. 417.
Mr. MacGregor : There was a discussion on this issue today. Before I come to the technical aspects of the amendments, I will remind the House of the important background to what has been agreed on the subject of pensions. I will repeat the four points that both I and the Minister made earlier.
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The first point is that the assets which will move from the existing British Rail scheme to the closed fund--the subject about which we are primarily talking--will be determined on an independent actuarial valuation. I repeat the point, because it is important that it is made clear to all pensioners. There is no question of the funds being siphoned off in any way other than for the purposes of the payment of pensions. The fund will be under the control of the trustees and they will have a fiduciary duty to the trust members. There is no way in which the Government would either wish or be able to purloin any of the funds. I underline that point, because that accusation has been put around the country. It is not our wish in any way, and I hope that that is explicit.The second point is that the fund will now have the added protection of a solvency guarantee from the Government. That is a totally new position and one to which I shall refer again later. The third and fourth points, which were widely welcomed and acknowledged by my hon. Friends, are that we have given the pensioners an extremely good deal. In addition to that guarantee, they will have an inflation-linked pension. The guarantee for solvency means that they have a guarantee on VAT, which at present they do not enjoy. In addition, the trustees will be able to use up to 40 per cent. of any surpluses in the fund and that is roughly the figure that is used at the moment for the payment of benefits.
Unlike most other funds there is a Government guarantee, an inflation index -linked pension guarantee, and there is the additional ability--the big difference from other index-linked pensions--to benefit from surpluses. That is the background and we have fairly and generously carried out our commitment to the pensioners. Certainly I wished to do that.
The grouping of amendments deals with Government payments under the Transport Act 1980. I will first deal with amendment No. 416 because most of the others in the group follow on from it. The memorandum of understanding between the Government, BR and the BR pension fund trustees deals with protecting the pensions of existing, deferred and future BR pensioners after privatisation while protecting the taxpayers' interests.
The solvency guarantee for the closed fund for existing pensioners, with the agreement that those pensioners may benefit from up to 40 per cent. of any future surplus and the promise of a similar guarantee to the BR residuary section of the joint industry scheme should that section at any time become seriously unstable, secures the future for all BR pensioners present and future. The provisions of the amendment are designed to provide the agreed protection for the taxpayer's interest.
It would be anomalous to continue the supply of public funds under section 52 of the Transport Act 1980 in circumstances in which they were not yet required, because the scheme now has the copper-bottomed security of an absolute solvency guarantee that is backed by public funds. That produces a fundamental difference--a guarantee from the taxpayer--that was never there before.
The hon. Member for Nottingham, East (Mr. Heppell) referred to the situation in 1980 and said that he understood that the position then was, "If your pension went bust, you'd had it." I think that those were pretty much the words he used. The difference now is that, if the situation
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arises of the fund being deficient, he has not had it. That is a big difference. It is a complete change from the position in 1980. Now he will continue to receive the pension guaranteed by the taxpayer. That is a fundamental difference.Lords amendment No. 416 introduces three new sections--52B, 52C and 52D-- into part III of the Transport Act 1980. The purpose of section 52B is to terminate the support contributions currently payable under section 52 of the 1980 Act in respect of the unfunded obligations acquired by any new pension scheme which has been given a Government solvency guarantee. So the contributions cease where there is a Government solvency guarantee, which is, above all, the closed existing pensioners fund.
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In place of the continuing contributions, a new obligation is proposed under which substitution payments will be made in circumstances to be prescribed by order. As I said, we intend to apply those arrangements principally to the new pensioners' closed section of the joint industry scheme, in line with the memorandum of understanding. But section 52B can equally be exercised in relation to the residual BR section of the joint industry scheme to which I referred earlier if a solvency guarantee is given in the event of the joint actuaries certifying the instability of the fund.
Mr. Prescott : It is complicated.
Mr. MacGregor : I agree that it is a complex and technical matter. That is why I was careful to stick firmly to forms of words which will be understood by everyone involved when they are read in Hansard .
Subsection (5) requires a determination of the capital value of the unfunded obligations. It is worth spending a moment on that because a related issue was raised this afternoon. Subsection (7) (c) provides for the substitution payments to be made in circumstances prescribed in the substitution order. Until the payments have been made or the scheme has been wound up, the Government's liability will not be discharged.
Subsection (7) provides for interest to accrue. The formulation is sufficiently wide for an interest rate to be specified which can equate to that which could otherwise have been earned by the scheme if the trustees had received the cash. In other words, the Government's liabilities to the guaranteed new scheme will continue with interest on the outstanding balance as assets of the scheme until the prescribed circumstances provide for the substitution payments to be made. That obligation, with interest accrued, will be included in every valuation. Therefore, it will be part of the valuation leading to the surplus from which direct payments in cash will go to the pensioners.
Mr. John Heppell (Nottingham, East) : Does the Secretary of State agree that, while the Government have the option not to pay anything into the fund if they do not want to, that is of little interest to the people in the pension fund, because nothing says that the Government have to pay the whole amount into the fund? So the money accrues with more and more interest but does so in the Treasury coffers and not in my pension fund.
Mr. MacGregor : That is not accurate. In circumstances where there is a surplus in the fund as a result of the obligation plus interest, there will be a direct and
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immediate benefit to the pensioners. That will contribute to the 40 per cent. of surplus which can be paid directly to them. It is a meaningful provision. It means that the obligations exist. I am surprised that the hon. Gentleman does not think that the interest payments matter very much. We were accused earlier of not putting cash in, and therefore not enabling the pension fund to gain anything from that obligation.With interest applied, there will be a roll-up in the fund. That will contribute to the surplus. So the amendment has real meaning and could mean real cash for the pensioner.
Mr. Heppell : Is the Secretary of State saying that the contributions that the Government are committed to paying under the 1980 Act will continue to be paid? If not, is he saying that the pension fund can receive those payments when it asks for them but not when the Government decide that it does not need it? If so, the Government will say that the fund does not need the contributions because it has a surplus. So the surplus would gradually be reduced. Is it the Government's intention to pay, because I have evidence to the effect that their intention is effectively to reduce the contributions depending on the surplus of funds?
Mr. MacGregor : No. Let me make it clear. As I have already said, and as is clear in the amendments, there will not be a direct payment of cash to the pension fund as there was previously because that is now replaced by the solvency guarantee, which is a fundamental difference. There will be a calculation of the unfunded obligation, which will be included in the fund for the purposes of valuation and therefore for the purposes of surpluses, plus the interest that I have already mentioned, which can and will lead to real benefits.
Mr. Prescott : I agree that it is a complex area, but what the Secretary of State has said means that the Treasury, certainly at the moment, will be saving the annual payments that it makes right up to the period when an assessment is made and the IOU has to be delivered. What is the estimate of the amount that the Treasury will be saving for the rest of decade?
Mr. MacGregor : There is no estimate at the moment. The hon. Member for Kingston upon Hull, East (Mr. Prescott) must remember that the taxpayer has a liability and commitment, and there is no way in which the pensioner will lose by this arrangement at present, for the reasons that I have just described.
I shall now deal with the point about timing. The new section 52D, which has been causing concern, includes provisions relating to directions given under the powers contained in sections 52A and 52C and orders made under section 52B. I shall first explain the technicalities. Orders under section 52B will be subject to the negative resolution procedures in common with the other order-making power in part III of the Transport Act 1980. However, section 52D(1) requires prior consultation with the trustees on any such order and section 52D(4) requires a copy of the solvency guarantee to be laid before each House when or before an order is laid. That is the point to which the hon. Member for Kingston upon Hull, East was referring this afternoon.
We are currently in discussion with the pension fund trustees as to how we deal with those extremely complex and technical matters in order to fulfil the arrangements
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under the memorandum of understanding and the arrangements that I have just described. Those discussions will lead to the laying of the order before the House some time early next year, when we have completed it.The House will know that this closed fund arrangement does not come into effect before next autumn, so it will be laid before the House well before that and the House will debate and decide on the matters. It will be by negative resolution, but that will enable the House to decide.
Mr. Cryer : There is a problem with laying negative procedure orders. Can the Minister guarantee that, when the order is laid, it will not come into force before Parliament has had the opportunity to make a decision? I must draw to the attention of the Minister examples of cases where orders have been laid in August, immediately after the beginning of the summer recess, which have come into force during the recess before Parliament has had a chance to debate them. Is the Minister saying that, after consultation with the trustees, Parliament will have the chance to make a decision? That assurance must be meaningful so that it will not be a case of trying to roll something that has already come into law.
Mr. MacGregor : I take the point made by the hon. Gentleman. Setting up the scheme will require an affirmative order. As I have said, the scheme is intended to come into operation as a closed fund in October. I understand that it would not be fair either to the pensioners or to the House to follow the sort of timetable that the hon. Gentleman suggested, and it is certainly not our wish to do so. It will obviously depend on how our negotiations go and I cannot give a complete guarantee, but I hope that I have said enough to indicate that I wish to meet his point.
Part of the whole commitment that we have given is that the scheme will come to both Houses for approval. That leads to the--
Ms Glenda Jackson : Will the right hon. Gentleman give way?
Mr. MacGregor : I should get on, because I can then explain the position in total.
That leads to section 52D(2), which was introduced as an amendment on Report in the other place. It would require the prior written agreement of the trustees to be obtained before the Secretary of State laid an order under section 52B. Our amendment (a) to amendment No. 416 will delete that requirement.
I do not see how the House can accept Lords amendment No. 295. As the hon. Member for Wrexham (Dr. Marek) rightly recognised, it could prevent a proposal, in relation both to the scheme as a whole and to public expenditure, from coming before the House. It would give the trustees an effective power of veto over the Government introducing secondary legislation, or control over the timing of payments, under the Transport Act 1980, to the guaranteed BR pensioner scheme. I have made it clear that the memorandum of understanding, which I have fully read, provides for the trustees' agreement, but it would be wrong to provide in legislation for any private individual or group such as the trustees to have such power in primary legislation. I have been looking at past examples, and that would be unprecedented.
Several hon. Members rose --
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Mr. MacGregor : Let me finish the point. There is a genuine problem, but we have done everything that we reasonably can to solve it. First, the proposed new section requires consultation with the trustees. It is clearly our intention and desire to seek and obtain agreement with the trustees on such matters. We have, as I have already said, started discussions with them. We have put a proposal to them and we await their response. It will be in the interests of all the parties concerned that agreement is reached.
However, we have to protect Parliament. A group of trustees might be able to withhold the putting of proposals before the House or control--having a veto means control--public expenditure proposals put before the House. Ministers will be answerable to Parliament for the way in which they exercise their order-making power. As taxpayers' funds are involved, we believe that that should be a decision for the House and not one taken elsewhere.
I hope that that makes clear what the difficulty is and why we have striven to overcome it. There is no duplicity. We have ended up with an extremely good deal for the pensioners. That is the most important point of all. We have sought to protect Parliament's interest. We have enabled the House to decide on what is quite a technical issue, once we have worked it through with the trustees. I believe that that is a sensible resolution.
I know that the matter will be debated for some time. I assure the House that the remaining amendments in the group are consequential or technical. I commend the other amendments to the House.
Mr. Prescott : When I spoke on the guillotine motion, I made clear my position, and that of the House, over the Government's action on the pensions. I know that other hon. Members have only the best part of an hour in which to speak, so I shall not go into the amendments in detail. The Secretary of State did so, and he spelt out his position, as was proper, because many people will be reading the report of the debates. However, I shall not follow him up that alleyway, because there is not enough time.
The essential issue about the pensions was determined at the beginning, when the Government decided to divide the pension fund into separate groups for separate companies. The Government often said that the tax authorities had forced them to do that, but that is not quite correct, because the tax authorities allow two ways to organise a pension fund.
A general industry fund could have been kept, but the Government decided to reorganise in such a way that it caused a conflict between the bodies, so the tax authorities said that the funds must be reorganised separately, and the problems arise from that. The main concern in this debate has been about the closed fund and pensioners who paid into the 1975 and 1980 funds. The closed fund will now be separated. No extra contributions will be made except those originally identified with the fund--the contribution to be made by the Government for their obligations arising directly from an unfunded pension fund.
That contribution amounts to some £80 million. We could argue about how that is divided between different funds, but it is approximately that amount. As the Treasury will not be paying it every year, it can be calculated to be five or six times £8 million. The Treasury is doing quite well, as it will save £4 billion or £5 billion, possibly more--being a little pessimistic, I think that it will save more--on the basis of providing an IOU.
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10.30 pmThe Treasury has undoubtedly gained some assets from the process. It has saved by not paying a contribution to the pension fund, as written into the 1980 legislation. The Government are now offering an alternative--an IOU and have gained from the process at the pension fund's expense.
At the heart of the debate has been the question whether the Government could reassure the trustees that their actions would meet their original commitment that the pensioners would be no worse off, their security would be guaranteed, and that the Government did not intend to take the funds. I do not agree with that point, but I have already made that clear.
It is only fair to feed into the argument the trustees' views. They have an interest to act on behalf of the pensioners in negotiations with the Government, and must say what they believe the Government intend to do. They recognise that the Government had difficulty in writing the solvency agreement into the Bill, and even recognised certain arguments about the power of veto and whether they could control the fund.
In a properly funded pension fund such as this, which the Government set up when they reorganised pension funds in 1980, the trustees are not obliged to agree with the Government. They have a fiduciary obligation, to which the Secretary of State referred, to manage the fund on behalf of the pensioners. Indeed, when the Government first funded the fund, the present Chancellor of the Exchequer, the then Under-Secretary of State for Transport, said that the fund no longer had anything to do with him and that he was obliged only to make a yearly payment. The same person is now trying to get back the yearly payment from that fund because he has discovered that surpluses have been paid.
The memorandum of understanding was the means by which the Government sought to assure the trustees about their responsibilities, rights and protections. The chairman of the trustees believed that it would protect the pensioners. The trustees made it clear that they hoped that, in accepting the Government's break-up of the fund, solvency and a retail prices index on pension payments would be guaranteed.
The Government said that they intended to give those guarantees, but they made other changes. The trustees then agreed that the surpluses that were meant to fund the extra value pension increases which railway pensioners had enjoyed because of the good management of the fund, about which we all agree, were not to be put in a fund on the basis of a 60 : 40 share. That means that 100 per cent. would have been available to the trustees to distribute as they wished. They chose to distribute it on a 60 : 40 basis, measuring their liabilities against the incomes that they were receiving from the fund.
Now they have no choice. The Government are telling them not only that they must put 60 per cent. into a reserve fund but that an appointed director must agree any investment policy followed by the fund. It seems from that that the trustees are not in the independent position that they occupied before. The appointed director can determine the moneys to go into the fund and the investment programmes. The introduction of the 60 : 40 share will affect the solvency of the fund. The understanding makes clear that if there is a problem of insolvency in the fund, the Government, through their appointed trustee, can take over and reorganise the fund.
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The charge that I have laid at the Government's door is that they were almost building insolvency into the fund. They were making conditions almost perfect for them to move in, take over the fund and reorganise it. It would then become a sort of unfunded fund and would meet the Exchequer's obligations. That would open the door to taking the assets. That creates uncertainty.The Secretary of State has had correspondence with the chairman of the board, who feels that he has been let down by the Government because he believed that whatever action was taken had to be agreed with the trustees. We now know that that is not the case, as the amendment makes plain, because the Government now speak about consultation. If the Government feel that they cannot grant the right of veto, the complaint of the chairman of the trustees, as spelt out in the letters, should be attended to.
The Secretary of State has had a number of letters from the chairman of the trustees, Mr. Fowler, on 15, 19 and 26 October. We have no record of any replies. Did the Secretary of State reply to the great concerns expressed by the chairman of the board who thought that he had been duped on the memorandum of understanding ?
Mr. MacGregor : I had a meeting.
Mr. Prescott : In his final letter, Mr. Fowler complains that he has sent three letters and has not received a reply. That letter states :
"I am sufficiently experienced in public expenditure matters to know that Government guarantees cannot be given lightly and without sensible controls which protect taxpayers' interests."
That is a fair point. The letter continues :
"Those requirements were recognised in the Memorandum of Understanding."
That was an agreement--peace in our time, pensions in our time--that was made before the debate in the Lords.
Mr. Fowler adds :
"What I had not foreseen when I signed the Memorandum was that the Secretary of State would be given powers to virtually take over the fund if the solvency guarantee were to be invoked."
He was a party to the negotiations and signed the paper along with the Minister of State. I do not know why the Secretary of State did not sign, but perhaps unfolding events have made that clear. Mr. Fowler makes it clear that his understanding of the memorandum was entirely different from that of the Secretary of State.
There is a clear division between the Secretary of Staton terms and conditions why was the word "agree" in the memorandum? Irrespective of whether it is in statute, if it is in the agreement with good intent that there will be an agreement with the trustees before anything is done, that should have some meaning. Does the memorandum of understanding still apply? Did the Secretary of State say that he would apply the word "agreement"? What happens if there is no agreement? Will he take unilateral action by telling the House, "I could not get an agreement"? If so, that is consultation. The crucial question is why the Secretary of State does not use the word "agreement".
Mr. MacGregor : Perhaps I may explain again. I was straightforward in explaining the difficulty that we could not avoid the responsibility of the House by granting a veto on matters that should be decided by the House. I shall repeat the exact procedure. We think that we shall reach
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agreement with the trustees, and that is our wish. When we do, we shall place orders before the House, and it will be for the House and the other place to decide upon them. If there is any disagreement, we shall lay before the House the trustees' comments. That is made clear in one of the sub-paragraphs that I read out. In relation to public expenditure, it is right that the House should decide. There is no question of the Government's taking control and leaving no alternative for the trustees. I repeat that I believe we shall reach agreement.The hon. Gentleman speaks about the Government effectively taking over the fund. There is no question of the Government's controlling or taking over the fund. However, because the Government, and therefore the taxpayer, are guaranteeing the benefits, we must ensure that the taxpayers' interests are protected. That is the reason for having a Government director on the body of trustees. It is not to control the fund, but simply to ensure that the taxpayer, who has the ultimate liability, is protected should all the funds be paid out to pensioners or otherwise issued.
Therefore, in unreasonable circumstances--I do not believe it will happen, but we have to protect ourselves in legislation--the taxpayers' interests are protected as the taxpayer would be footing the bill. There is no question of the Government's taking over the fund.
Mr. Prescott : We shall have to continue that debate another time, but if the Minister looks at the memorandum of understanding, he will see that his appointed Government director of the trustees, "whose consent will be required to the distribution of any surplus, strategic decisions on investment policy and other matters" and anything to do with the
"guarantee of benefits granted from a surplus",
will
"decide on the investment of the special reserve."
That is not the trustees ; it is the Secretary of State's appointee acting on his instruction. The trustee company is no longer an independent body.
Why does the Secretary of State appoint a director? Why does he make it clear in the memorandum of understanding that trustees no longer have freedom to make such decisions unless the
Government-appointed director agrees? Presumably he will ring up the Department of Transport or the Treasury. How can he consider for a second that the Government are not controlling the fund? I cannot believe that the Secretary of State could possibly have read the memorandum of understanding; if he did, he had a duplicitous way of doing it.
Another example comes from the Minister of State's statement in the other place on 12 October in which he said :
"The Government regard the memorandum of understanding as binding".--[ Official Report, House of Lords, 12 October 1993 ; Vol. 549, c. 101.]
It may be binding on the Government, but it is totally meaningless. It can mean whatever the Secretary of State wants to interpret it to mean. As the lawyers to the trustees fund said, it has no binding in contract law. It cannot be used to claim that the Government are party to a contract as signatory to the document ; it cannot be treated as a contract in law. It has no meaning whatsover. It achieved what the Government wanted--it won the vote in July in the House of Lords simply by kidding them.
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