House of Commons Hansard Debates for 23 May 1994

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Railway Pensions

10.15 pm

The Minister for Public Transport (Mr. Roger Freeman) : I beg to move,

That the draft Railways Pension Scheme Order 1994, which was laid before this House on 10th May, be approved.

Madam Speaker : I understand that with this it will be convenient to discuss at the same time the following motion :

That the draft Railway Pensions (Protection and Designation of Schemes) Order 1994, which was laid before this House on 10th May, be approved.

Mr. Freeman : The House will recall that, during the final stages of the Railways Bill last year, I undertook that there would be further consultation with all interested parties before the orders implementing the detailed future railway pensions arrangements were laid before Parliament for approval.

The industry and the present trustees were fully involved in working out the detailed arrangements on which we went out to wider consultation on 31 March with the trustees, employers, trade unions and pensioners' representative bodies. We have taken account of their comments as far as possible and I wish to thank all those consulted for the clarity and promptness of their representations.

In particular, we have reached full agreement with the British Rail pension trustees on all major points of principle relating to railway pensions after privatisation. The arrangements that we have agreed honour the commitments given by the Government in Parliament and elsewhere. I can assure the House

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) : Will the Minister give way ?

Mr. Freeman : If the hon. Lady will forgive me, I would like to finish my sentence.

I can assure the House that the pensions of all railwaymen and railwaywomen, both past and present, earned in their service with BR are safe, and that the future arrangements will give them security.

Mrs. Dunwoody : The Minister has just made a very definite statement. Is not it true that the trustees have not met and that any agreement that the Minister has reached has been because of the fiduciary duty of the chairman that there may be an agreement within a very narrow sense ? However, it is not true that the Minister has reached complete agreement with the trustees.

Mr. Freeman : I do not believe that that is an accurate statement. The trustee board--that is, all the trustees--met on 5 May and agreed all points which had been negotiated except the treatment of the deficit and the surplus after deficit. However, all the trustees agreed a compromise proposal to put to the Government. We have agreed to that compromise, so I would argue that we have fully met our commitment to obtain agreement with the trustees.

Mr. Ieuan Wyn Jones (Ynys Mo n) : Since the Minister has referred to the surplus and the deficit, will he clarify the position in respect of the solvency guarantee ? As I understand it, the Government will make good deficits in the years where they occur, but they will recoup that money in years when there are surpluses. Is that right ?

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Mr. Freeman : This is a complicated subject. If the hon. Gentleman will bear with me, I will explain the issue as clearly and as succinctly as I can. If the hon. Gentleman is not satisfied when I reach that part of my speech, I will give way.

Mr. Donald Anderson (Swansea, East) : As I understand it, the Minister claims that there has been no difference of substance in respect of the proposals since the board of trustees met and agreed on 5 May. Is he aware that the trade unions feel a deep sense of grievance that they have not agreed the final package ? There is therefore a considerable difference between what the Minister says tonight and what the unions say. We must remember that the pensions are of fundamental importance to trade union members. Surely it is important that the Minister ensures that the trade unions are fully consulted about and agree with the final proposals.

Mr. Freeman : I have had two separate rounds of meetings with all three railway unions. I believe that we have met all their substantive arguments and I shall discuss some of the issues later. If there are specific drafting issues, but not points of principle--if the unions and their legal representatives feel that we have not reflected accurately in the final orders before us what they would wish--I give an assurance to the House that we will amend the legislation by subsequent orders for which the Government have to come back to the House, subsequent transfer orders and Transport Act 1980 orders. We will use those orders to amend in detail where there is agreement between the trade unions and their representatives and the Government--or the rules themselves can be changed. However, I assure the House that, following my lengthy meetings with the unions and their representatives, we have met all their arguments of substance.

Those are extremely difficult issues. Obviously, there will be an opportunity in another place for the orders to be debated yet again. Indeed, the Government will have to come back yet again with further orders during the summer. We are not seeking to bamboozle the unions--that is not possible. We are not seeking to railroad the issue through, if the hon. Member for Swansea, East (Mr. Anderson) will forgive the pun. We have pursued those negotiations. After all, we can only negotiate with the trustees. The consultation with the trade unions was in parallel with those negotiations but, I believe, carried out in good faith on both sides.

We have before us tonight the first two draft orders. Let me first discuss the draft Railway Pensions (Protection and Designation of Schemes) Order, which will give the promised statutory "no less favourable" protection to "protected persons"--broadly, people who were in service or retained benefits in the schemes on 5 November 1993--and incorporates in article 11 the "indefeasible right" to remain in equivalent, that is to say, "shared cost", sections of the joint industry scheme, which will be called the "Railways Pension Scheme", for so long as their employer remains a part of the railway industry. We have agreed to extend that right. That is a point that was argued forcefully, not only by the trustees, but by all three unions, so that it will not now be lost where employees change jobs voluntarily within the industry--an important concession that was argued for well during the consultations.

I should like to clarify two points about that order. First,

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with regard to the definition of "designated scheme" in article 1(2), the intent is to protect relevant pension rights at the date of the order, including the right to future accrual of such rights on a "no less favourable" basis. Secondly, there is an area of concern between my Department's and the trustees' lawyers about the precise drafting of paragraph (4) of article 7. Should it be agreed that an amendment is necessary in respect of that latter point, we shall make it when we make the transfer order--I intend to lay a draft of that order next month.

For the purposes of the "indefeasible right" that is conveyed by article 11, paragraph (4) of that article defines the "railway industry". The intent is that the term should comprise activities currently carried on by BR which may in the future be carried on by successors, but only to the extent that they are activities connected with, or provided for, the railway industry.

The order also designates the existing pension schemes to which it applies for the purpose of enabling their members or beneficiaries to be protected persons. A handful of BR employees retain membership of pension schemes operated by Associated British Ports and the National Freight Company. If we did not specify those schemes, those BR employees would not be given statutory protection. I emphasise that that is the sole reason why we are designating the ABP and NFC schemes. I give an assurance to the House that the Government have no intention of using the powers in relation to "existing schemes" contained in schedule 11 to the Railways Act 1993 to amend either of those schemes.

The Railways Pension Scheme Order formally establishes on 31 May 1994, under the powers provided in paragraph 2 of schedule 11 to the Railways Act 1993, the "Railways Pension Scheme", which, it is planned, will succeed the existing main BR schemes--that is to say, principally the BR pension scheme, the BRPS--on 1 October 1994. The order also appoints the Railways Pension Trustee Company Ltd. as the first trustee to the scheme, and designates the scheme as "the joint industry scheme" for the purposes of paragraph 8--that is to say the "indefeasible right" provisions--of schedule 11. The key provisions are in the schedule, which contains the pension trust and the different scheme section rules.

Existing BRPS pensioners and deferred pensioners will be transferred into the 1994 pensioners section of the RPS--the closed section. Initially, there will be two such sections. The reason for that is a practical one related to valuation of the Government's liabilities to them under the Transport Act 1980. Those people who were already pensioners and deferred pensioners at 31 March 1994 will join the "A" section, while those retiring or deferring their pensions between 1 April and 30 September will join the "B" section. The two sections will have similar rules, and will be amalgamated as soon as possible thereafter.

The Secretary of State will be under a duty to give a solvency guarantee to those sections. The guarantee will secure the continued payment of fully index-linked pensions. The proposed draft of the guarantee, the details of which have been agreed with the present trustees, was deposited in the Library last Friday. The members will have rights under the rules to share in any future surpluses in their fund. The rules are contained in appendix 1 to the schedule. Distributed surpluses will be shared as follows : 40 per cent. to payment to pensioners, and 60 per cent. to a special reserve retained in the fund. The Government cannot

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withdraw those sums while the fund continues. The 40 per cent. and 60 per cent. mirror the existing ratio of distribution. Serving staff who are members of the BRPS will be transferred into the BR section of the RPS. They will move into their new employers' sections, which will have materially the same rules, affording them the security and continuity that they have sought, as their employment is transferred, for example, from BR to a franchised railway operating company. The rules are contained in part 1 of appendix 2 to the schedule. They provide that pensionable service will normally be treated as continuous, even on voluntary transfers between the equivalent sections of participating employers, subject to Inland Revenue restrictions. The Railtrack and European Passenger Services sections will be set up almost immediately. The continuous service provisions ensure that those who move involuntarily or voluntarily within the industry will protect their length of service. So there is no penalty involved in the truncation of service.

Mr. Hugh Bayley (York) : Will the Minister explain what he meant by the word "normally" ? He said that there would normally be continuity of service. As things stand, anyone who is in the British Rail pensions schemes retains, year for year, each year of service. Are there are any circumstances in which an employee who moves from one company's to another company's employment, but who retains his membership of the scheme, would not receive year for year, month for month, day for day, the service previously accrued in the scheme ?

Mr. Freeman : Yes, and it relates to the Inland Revenue laws. I have explained this to the unions. Where an individual moves and has a very substantial salary increase, there are restrictions on the number of continuous years that can be provided for his or her pension.

Mr. Bayley : As there is detriment in those cases, will the Minister explain how the scheme, as agreed now, matches up to the Government's commitment that there will be no detriment in the new scheme and that the new scheme will be no worse ? "No less favourable" are the words that Ministers used throughout the discussions in the Standing Committee which considered the Railways Bill. How can he say that the scheme is no less favourable when he admits that some people will be disadvantaged ?

Mr. Freeman : I think that the hon. Gentleman will admit that there are bound to be some examples, but they will be few and far between. We are talking about an individual who moves from one job to another with a substantial salary increase. I do not believe that that will be the norm. Individuals will transfer within the industry from one train operating company to another, or from an infrastructure company to a train-operating company broadly on similar salaries. It is an Inland Revenue rule. It is not something that either the order or the Department of Transport can alter. It applies throughout the private sector. I understand the hon. Gentleman's concern and I may be able, through the means of a written answer, to make the House aware more precisely of the rule. If the hon. Gentleman cares to table a question, I shall answer it as fully and comprehensively as I can. The matter, I understand, may well be raised on another occasion.

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Mr. Peter Bottomley (Eltham) : Does my right hon. Friend accept that few of us are concerned about the person who may be an engine driver and who goes on to become the deputy chairman of Railtrack ? Most of us are concerned about those who have some years service with British Rail and who have perhaps moved to an operating company. They may spend part of their working lives working for Railtrack, and would hope to have continuous service instead of moving around different companies in the contracting industry. That is the problem which the Select Committee on Transport faced, and the Committee feels that the Government have managed to achieve agreement on it. Can my right hon. Friend confirm that it has been solved ?

Mr. Freeman : Yes.

The method for determining the initial split of assets between the sections of the RPS will be agreed with the trustees after taking the advice of our respective actuaries. The transfer order, another affirmative order, a draft of which will be laid before Parliament next month following the formal establishment of the scheme, may be used to split the assets between the sections of the RPS. Because we have to consult the trustees of the RPS first, the transfer order cannot be laid until the RPS has been formally established and the trustees appointed.

To maintain flexibility, employers will be able to admit new employees either to their section which succeeds BR's section, or to other new sections providing alternative pension arrangements. This will make the RPS more attractive to new employers, and give their employees the comfort of belonging to a large, well-managed pension scheme. A template for the rules for defined benefit and defined contribution sections is contained in parts 2 and 3 respectively of appendix 2 to the schedule.

Equal employer/employee representation will continue on the trustee board and the "Pensions Committees"--the management committees--of all sections. For legal and technical reasons, we are having to form a new trustee company, the Railways Pension Trustee Company Ltd., to act as trustees to the RPS. At 1 October this company will also take over as trustee of the other BR pension schemes for which the present trustee company acts so that the existing investment pooling and management arrangements can continue.

It is our intention that all the participating employers in the RPS will share in the ownership of the trustee company so as to prevent a single employer having sole influence over it. To facilitate this, the trustee company will be wholly owned by a holding company, Railtrust Holdings Ltd., which will be a company limited by guarantee making change of ownership easier when employees join or leave the scheme. The first directors will be the directors of the present trustee company together with two nominated by Railtrack, and one each by the British Transport Pensioners Federation and the Retired Railway Officers Society.

The present trustees have suggested that those latter two posts should be directly elected by the pensioners from the outset, but I have been advised that an early election would be difficult to organise. However, those nominees will only serve for the first two years until direct elections can be organised.

Although the articles of association provide for direct election of employee/pensioner directors after an initial two-year period, they empower the trustee board to devise

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alternative arrangements for voting, providing that equal employer/employee representation is maintained. That was a point put to me by the unions and the Government have agreed to provide flexibility in the mechanism for election.

Copies of the memorandum and articles of association of both companies, which will be incorporated by the BR board later this week, were placed in the Library last Friday.

For historical reasons, BR has a number of other pension schemes, all listed in the designation order. These schemes will stay in place. We see no requirement for the time being to transfer members, either serving staff or pensioners, out of their schemes. I should make it clear that no changes are proposed to the British Transport Police scheme.

Mr. Donald Anderson : On two occasions, the Minister has said that certain documents relevant to the debate were put in the Library last Friday. Does he think that that is an adequate time--however technical the documents are--for the outside interests to assess adequately the relevance and importance of those documents ?

Mr. Freeman : I have given the House an assurance, with regard to the documentation placed in the Library and the orders in this complicated field, that if representations are made--either by the trustees or their representatives, or by the trade unions or their representatives--which improve the documentation, because we settled the points of principle, then amendments will be made. These are enormously complicated issues and we have kept faith with those whom we have consulted in their preparation.

In relation to the closed fund for pensioners--in other words, the pensioners' sections--we have honoured the memorandum of understanding entered into with the trustees and the BR board last July. We have reached agreement with the trustees on a formula for partial deferral of Government cash support payments, under the Transport Act 1980, to the pensioners' fund to take account of the Government solvency guarantee. Any deferred payments will remain an obligation of Government, earning interest, and will be accounted for as an asset of the section.

We intend to bring an order before Parliament before the summer recess giving effect to that agreement, which we intend will take effect in October. It was agreed last July that the Government must give their consent to decisions affecting their financial exposure under the guarantee. Originally, that consent was to have been exercised by a Government director on the trustee board. Because of potential conflict between his fiduciary duties under general trust law and his responsibility to the Government, we have decided not to proceed with that proposal. Instead, the consent of the Secretary of State will be required--within the terms and conditions of the guarantee--to strategic decisions about the fund, but not its day-to-day operation. Accordingly, there will be no Government director on the trustee board.

When the orders were laid before Parliament on 10 May, there was one issue in relation to the pensioners' fund on which we had failed to reach agreement with the trustees. Although we had accepted that pensions should not be reduced in cash terms in the event of a deficit in the fund, even if they included unguaranteed discretionary

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increases, we had not resolved the procedure that would apply in the absence of other agreement if the fund went into deficit and subsequently returned to surplus.

We have now reached agreement, however, on the basis of a compromise proposal put to us by the trustees. We have accepted the compromise. In the event of a deficit, the special reserve will be applied in full first, before any freezing of pensions. I should emphasise that the pension prevailing at the establishment of the closed sections on 1 October 1994 will always be indexed for inflation. It cannot be reduced or frozen. Total pensions may subsequently include discretionary real increases and it is the total that may, as a last resort, be temporarily frozen until the indexed guaranteed pension exceeds it. After those sources had been exhausted, Government guarantee payments would be made. A subsequent surplus would be applied in the reverse order.

The trustees have also offered changes to our original agreement on Transport Act 1980 payments, to reflect the ramifications of this proposal. Both we and the trustees regard that position as a fair way of dealing with a problem that was not foreseen at the time of the memorandum.

Even though the pensioners' section rules do not reflect that revision of policy, there is no need to amend the order. We are considering with the trustees changing the rules--in particular rules 13, 14 and 16--after formal establishment, through the amendment procedures written into them. That procedure might also be used with the agreement of the trustees to make other agreed amendments to the pension trust or rules, to clarify the existing drafting where that is considered necessary, especially in relation to the provision of "seamless" voluntary transfers between railway employers within the RPS, in normal circumstances on which agreement has been reached with industry employers. Failing that, the required amendments will be made together with the forthcoming transfer order. I repeat that assurance.

The arrangements to be implemented under the two orders will fully deliver the undertakings given by the Government and provide the promised security, protection and peace of mind to BR's existing staff, pensioners and deferred pensioners. I hope that the House will support them.

10.37 pm

Mr. Brian Wilson (Cunninghame, North) : The Minister constantly reminds me of a sort of upmarket job creation scheme whose business is digging holes to fill them in again. This Minister seems to revel in creating complexity in order to unravel it.

Let us rise for a minute above the minutiae of what is being so lovingly described by the Minister. Why are we here ? What is the scandal about the British Rail pension fund that makes it the centre of attention in the House tonight ? Why, out of all the problems that exist in the country and the world, have scores of parliamentary hours been devoted to the affairs of the British Rail pension fund ? The sole reason why the fund, which is well run, acts responsibly in the interests of its members and has attracted no

complaints--unlike many of the private pension funds that the Tories have been anxious to shepherd people towards--is being debated is that it is a by-product of the

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Tories' destructive determination to fragment our railways. Out of that has arisen the opportunity to fragment the BR pension fund. This has been a tawdry and wholly unnecessary exercise. It has given rise to thousands of hours of lawyers' time being wasted and having to be paid for over the past 18 months, just to deal with the complexities to which the Minister keeps referring. It has disrupted the operations of a smooth-running pension fund and, most important, it has caused immeasurable upset for tens of thousands of railway pensioners, who, like the rest of us, deeply resent this unwarranted interference in what should be the sacrosanct territory of a pension fund.

The whole exercise has been characterised by opportunism, by incompetence, and ultimately by a retreat on the part of the Government. At the start, the Treasury thought that it could get its hands on £4 billion of railway pensioners' money, to set against the public sector borrowing requirement. The simple device was to be the splitting of the pension fund and the taking over of half of it for future administrative purposes.

Step by step, the Treasury has been frustrated in the achievement of that end, and I welcome the assurance that it will get nothing out of the exercise. If that is indeed so, it has been a major victory for all concerned : for the Opposition, for the trade unions, but most of all for the thousands of railway pensioners who protested at what has been done

The Secretary of State for Transport (Mr. John MacGregor) : No.

Mr. Wilson : Let the right hon. Gentleman have another look at his original proposals, which sparked off fear and alarm among railway pensioners as they realised that half of their fund was to go directly, not into thin air, but to the Treasury. Four billion pounds was and is big bucks and big politics, but the people who planned the audacious raid have been forced to back off. I promise them that we will remain vigilant throughout every stage of the process to see that not one penny of the BR pension fund ends up in the Treasury. Right to the end, interference with the pension fund was characterised by chaos and confusion. The Minister tonight used the same phrase as the Secretary of State used in the press release issued last Friday :

"John MacGregor, Secretary of State for Transport, today welcomed the final agreement of the BR Trustees to the joint industry pension scheme for railway industry staff and pensioners".

Why do Ministers thus continually misrepresent what has occurred ? The Secretary of State, the Minister and the authors of the press release know as well as I do that there had never been a meeting of the trustees to consider the final proposals. At the very time the press release was being drawn up, the proposals were still being drafted--late on Friday. Yet the Department had the cheek to put out a statement saying that the trustees had accepted them.

There is a precedent for the folly of this approach. The rest of us remember the memorandum of understanding of last year. In good faith, the chairman and chief executive of the pension fund accepted the memorandum when the trustees had not yet met. Yet Ministers misrepresented the facts, saying that they had accepted the memorandum. Ultimately, the fact that there had been no such acceptance

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was exposed--hence the scenes in the House of Lords, shortly before the legislation was finally passed, which brought the Bill into even greater disrepute.

The press release contained another untrue phrase as well. It speaks of the

"joint industry pension scheme for railway industry staff and pensioners in the new privatised railway."

But there is no new privatised railway, and the way things are going there is not going to be one. No one is interested in investing in the "new privatised railway", and it matters not whether the train operators or Railtrack come first : still no one will be interested in investing in the new privatised railway, because it is a lousy bet for any investor.

In the event of there being a new privatised railway, what do we have to look forward to ? I shall quote from Friday's edition of the Eastern Daily Press . It stated :

"Children put at risk' by rail cuts . . . Schoolchildren and commuters will be left stranded following railway bosses' decision to scrap a key rural service . . . Regional Railways insisted : We live in a commercial world where we have to generate the maximum amount of revenue'."

So the new timetable changes will leave schoolchildren and commuters waiting at Spooner Row, Eccles Road and Harling Road.All those stations are in the constituency of the Secretary of State for Transport. [Interruption.] The Secretary of State attacks the Eastern Daily Press . Rarely can a Secretary of State have been so directly the author of his constituents' misfortune.

Under a previous arrangement, these orders were at one stage to be debated on Thursday. I make that point to my hon. Friends who complained about documents not being in the Library until Friday. Even on Friday, the Government were still changing this and altering that and amending, rubbing out and pencilling bits in. They got messengers to go running around with the documents so that they would reach the unions, the people who represent those most directly affected, before 5 o'clock. I have a copy of a document which states :

"On Her Majesty's Service. Express service at all stages. I certify that the papers transmitted under this label are official and of great urgency and require to be delivered by 5 pm today." That was 20 May. The matter has been going on for 18 months and affects the pensions of tens of thousands of people in the industry and those who have given their lives to it. But messengers were scurrying about on bikes at 5 pm on the Friday before the orders were to be debated. That is after 18 months and a great amount of candle power, and still the Government have not been able to complete the orders.

I shall later ask for undertakings that the changes to which I understand the Government have agreed, even since the statutory instruments were printed and since the bikes delivered the latest dispatches to the trade union headquarters, will eventually be incorporated in the instruments. What an impertinence that at 5 o'clock on Friday they were still messing about with people's pension funds on the basis of such a shambles.

I have three questions for the Minister. First, will he address the issue of seamless transfers for railway personnel between employers ? On this, as on many other matters, the Tories have been forced into involuntary retreat in an attempt to offer sweeteners to potential private interests. They started by saying that they were not prepared to allow staff to maintain their pension rights if they transferred voluntarily from one company to another within the railway industry. That would apply only if transfer were compulsory.

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In February, the Government finally changed their tune and agreed that voluntary transfers and promotions with the industry would carry the same rights. However, the terms of that climbdown continued to be unclear, and are not adequately covered in the orders. Can the Minister confirm that the period of pensionable service for rail staff will not be reduced as a result of a transfer from one employer to another within the railway industry ? If that guarantee is forthcoming, as I believe it will be, will it apply to new entrants to the scheme ?

A crucial question is whether the Minister will confirm that clause 8 of the pensions trust will be amended to implement the ministerial promise of seamless transfers between railway employees on promotion or other voluntary transfers.

Secondly, I turn to the issue of discretionary pension increases in the event of the fund's temporarily going into deficiency. The Government's previous position was that in those circumstances discretionary increases would cease in spite of the very effective safeguards proposed by the trustees. That is an important consideration for pensioners, and particularly older pensioners. I understand that discretionary increases account for some 15 per cent. of the average pension. Will the Minister confirm that he has also retreated on this issue and that rules 13, 14 and 16 of the pensioners' section--the one that covers pensioners and deferred pensioners--will be amended as agreed with the trustee company on 18 May to strengthen the security of pensioners' entitlements ? I again remind my hon. Friends that all this has been going on for 18 months, but the Government were still being forced into the reluctant concessions such as this last week.

Thirdly, I want some explanation of where the Government have reached on an insolvency guarantee for the existing and deferred pensioners' fund. I understand that the chief officials of the trustees are now satisfied with what is proposed. On the basis of their most recent information, the National Union of Rail, Maritime and Transport Workers understands that a mechanism has been proposed to enable Ministers to harvest the surpluses of the fund in good years and to pay back money given under the solvency guarantee, which thus becomes a loan rather than a grant. I hope that the Minister will take this opportunity to clarify that.

My hon. Friends will raise many other questions, and I want to leave them plenty of time to do so. But I return to my original point. There is no reason for us to debate the British Rail pension fund now. It should never have been disturbed, in the same way that British Rail should never have been fragmented. A Labour Government will restore British Rail to a national, integrated railway company. We will restore its pension fund. We will restore peace of mind for its pensioners.

I believe that the Government have many problems. I believe that the Tories have many problems in the weeks ahead, never mind the months ahead, in selling rail privatisation to any substantial body of opinion. [Interruption.] I think that I just heard the hon. Member for Rutland and Melton (Mr. Duncan). I remember that he was a member of the Committee that considered the Bill. We talked for weeks about railway pensions, yet the only time that he intervened was when a question arose about oil pipelines. When I hear an hon. Member intervene on a question of oil pipelines, that is the time to reach for the

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Register of Members' Interests. And sure enough the hon. Gentleman did not disappoint me. He does not seem to be able to get off his posterior this evening to contribute.

Mr. Peter Snape (West Bromwich, East) : Can my hon. Friend assure the House that that oil pipeline did not pass under a council house in Westminster ?

Mr. Wilson : I think that we should intrude no further on the private grief of the hon. Gentleman and Lady Porter, though, I presume, not in unison.

Mr. Alan Duncan (Rutland and Melton) : Sink a bit lower.

Mr. Wilson : Sink an oil well.

The central subject of the debate tonight is the future of railway pensions. As the Minister said, there will be many more orders to find out exactly what the Government have in mind. I give him due notice that just as we have followed this from start to finish, just as we have forced retreats on all the major intentions that the Government had towards railway pensions, just as we wiped out the original options that the Government had the impertinence to lay before railway pensioners, so we will continue to monitor the whole process from now until the day when that whole shower is consigned to the dustbin of history. I do not trust them. The country does not trust them. Most importantly, the railway pensioners do not trust them.

10.52 pm

Mr. Peter Bottomley (Eltham) : The hon. Member for Cunninghame, North (Mr. Wilson) entertained the House, but asked unnecessarily why we are having the debate. For the past five elections, some of the trade unions sponsored Labour Members of Parliament to contribute to such debates. I think that if the trade unions that have political funds had been asked whether it is right to spend £10 million every general election to sponsor a party that has lost each one of them since 1974, they would begin to believe that they should start spreading their favours rather more widely. Even better, they should stop trying to pretend that the Labour party represents the political interests of their members.

The reason why we now have sensible pension arrangements is not just because of the Labour party, but because hon. Members on both sides of the House responded to the Government's invitation to comment, both on the Select Committee and individually. I think that rail pensioners and prospective rail pensioners have reason to be grateful to Ministers for their response to what Members have said.

Mr. John Heppell (Nottingham, East) : Will the hon. Gentleman give way on that point, as I am a railway pensioner ?

Mr. Bottomley : I shall give way, but I had not developed any point beyond answering the rhetorical question from the hon. Member for Cunninghame, North.

Mr. Heppell : As a railway pensioner, let me say that I am not happy with the way in which the Government have handled the situation--and I suspect that mine is the view of most railway pensioners. My hon. Friend spelt out the position. First, the Government promised us "comparable" arrangements, before coming up with two options that were nowhere near comparable. Then they switched it to "favourable", before coming up with options that were not

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favourable. I am still in the same position : my pension will be less beneficial to me now than it was before privatisation.

Mr. Bottomley : The hon. Gentleman may wish to make his own speech later, unless he has made it already.

What really face us are the public problems of the Labour party. My right hon. Friend the Minister has made it obvious to all--including those Labour Members who are present and, by extension, those who are satisfied with the position but are not present, who make up probably nine tenths of the parliamentary Labour party--that railway workers have no further problems. I think that that outcome was predictable. The hon. Member for Cunninghame, North has predicted that Labour will reverse the changes that are in progress in the railway industry. As I have made plain on a number of occasions, I believe that the Government's aim should be higher capital investment, less current subsidy and more use of the railways ; but today we are more concerned with the interests of those who work on the railways- -both in the operating companies as they now are, and in Railtrack as it now is.

The assurances given to the House--whether those announced on Friday or those that were predictable from the outset, and certainly those given by my right hon. Friend this evening--are acceptable. It is a disgrace that Labour's spokesman has not described what has now been proposed as right and acceptable. In no part of his speech has he said that it is unacceptable to those working in the rail industry. Mr. Wilson rose

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