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Mr. Kirkwood: To ask the Secretary of State for Social Security if he will estimate the annual costs of phasing in the reduction of the entitlement to the additional pension to a widow or widower over a 10-year period between 5 April 2000 and 6 April 2010 in 5 per cent. annual increments; and on what basis he estimates this cost. [31934]
Mr. Arbuthnot: The information is in the table:
Year |Cost £ million --------------------------------------------- 2005-08 |350 2010-11 |400 2015-16 |300 2020-21 |200 1. The cost is in 1994-95 prices and is the estimated total increase in retirement pension expenditure. 2. The estimate assumes that the increased level of additional pension would apply equally to contracted-in and contracted-out contributions. 3. This estimate is consistent with the assumptions and projections in the Government Actuary's report on the Pensions Bill 1994 and in the Government Actuary's Quinquennial Review on the National Insurance Fund.
State Retirement Pension
Mr. Kirkwood: To ask the Secretary of State for Social Security if he will estimate the annual cost by the year 2030 of equalising the number of qualifying years for the category A pension at 39 for both women and men; and on what basis he estimates this cost. [31933]
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Mr. Arbuthnot: The annual cost is estimated to be about £ billion by 2030.
Notes:
1. The cost is in 1994 95 prices and is the estimated total increase in retirement pension expenditure.
2. This estimate assumes that the change would be made to male pension for awards from 2010 onwards and the female rule would remain as at present for all years.
3. The estimates are relative to the projected costs of basic pension after allowing for the changes in the Pensions Bill. 4. This estimate is consistent with the assumptions and projections in the Government Actuary's report on the Pensions Bill 1994 and in the Government Actuary's Quinquennial Review on the National Insurance Fund.
Mr. Bayley: To ask the Secretary of State for Social Security how many (a) divorced and (b) widowed pensioners are receiving a full state pension based on their spouse's national insurance contribution record; and of these how many are also in receipt of (i) income support or (ii) other state benefits. [32074]
Mr. Arbuthnot: The figures for widowed and divorced pensioners are not available separately. The total number in March 1993 was 1,783. It is not possible to identify how many of these people were receiving income support or other benefits.
Source:
Retirement Pension Statistics Biannual enquiry 31 March 1993.
National Insurance Contributions
Mr. Kirkwood: To ask the Secretary of State for State for Social Security if he will estimate the annual income to the Exchequer of removing the lower earnings limit on employer contributions to national insurance contributions; and on what basis he estimates this sum. [31997]
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Mr. Arbuthnot: If employers were to pay contributions on earnings below the lower earnings limit, the additional income would be an estimated £150 million in a full year. This figure was derived using information from the April 1993 new earnings survey, which was then adjusted to take account of the latest earnings estimates for 1995 96. The contribution rate is assumed to be 3 per cent. which is the rate currently payable by employers in respect of earnings just above the lower earnings limit.
Source:
Government Actuary's Department.
Funeral Expenses
Mr. Gunnell: To ask the Secretary of State for Social Security what changes have been made to the social fund funeral expenses regulations following those published in Cm 2858 in May. [31710]
Mr. Roger Evans: The Social Fund Maternity and Funeral Expenses (General) Amendments Regulations (SI 1995/1229) were laid on 9 May this year and came into force on 5 June.
The funeral payment scheme covers all the reasonable costs of burial or cremation disbursements arranged by the funeral director and allows up to £500 for his services. Everyone who is entitled to help with arranging a funeral through the social fund will be able to choose either a burial or cremation in all parts of the country. So total costs paid by the taxpayer could, in the case of burials, exceed £1,000.
A copy of the regulations is available in the Library.
Married Women's Pensions
Mr. Bayley: To ask the Secretary of State for Social Security how many women are in receipt of the married woman's pension of £35.25; and what is the Government's estimate of how this figure will change over the next 10 years. [32075]
Mr. Arbuthnot: The number of women in receipt of the married woman's pension of £35.25 at 31 March 1994 is 1,905,140.
An estimate of how this figure will change over the next 10 years is not available. However, over the next 10 years the total of category BL and ABL pensioners is likely to remain approximately stable. Within this group the numbers with category ABL will rise and numbers with category BL and ABL pensions will fall.
In the longer term, due to the effects of home responsibilities protection and the abolition of the married women's reduced rate option, more women will become entitled to a category A pension at over 60 per cent. The numbers with category A pensions will rise and the numbers with category BL and ABL pensions will fall.
Note:
Category BL pension is payable to a married woman on her husband's contributions at up to 60 per cent. of the standard category A rate, provided she and her husband have both reached pension age.
Category ABL pension is payable to a married woman and is a combination of category A and category BL. Where a married woman's own category A entitlement is less than 60 per cent. of the standard rate, the pension is supplemented up to that level with category BL pension based on her husband's contributions.
Mr. Bayley: To ask the Secretary of State for Social
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Security how many people in residential or nursing homes have wives living elsewhere who receive the married woman's pension of £35.25. [32076]Mr. Arbuthnot: The information requested is not available.
Mr. Bayley: To ask the Secretary of State for Social Security how many women in receipt of the married woman's pension of £35.25 (a) are also in receipt of income support and other state benefits, (b) have incomes above income support levels and other state benefit levels and (c) are entitled to but are not claiming income support and other state benefits. [32077]
Mr. Arbuthnot: The information requested is not available.
Mr. Bayley: To ask the Secretary of State for Social Security how many women in receipt of the married woman's pension of £35.25 would still be in receipt of income support and other state benefits if the substitution rules were changed to allow women living apart from their husband because the husband has gone into nursing or residential care to claim a full state pension. [32078]
Mr. Roger Evans: The information is not available.
DEFENCE
Royal Dockyards
Ms Rachel Squire: To ask the Secretary of State for Defence if he will make a statement on the redundancy and pension provisions for dockyard employees in the event of privatisation or another of the options currently under consideration. [31425]
Mr. Freeman: My right hon. and learned Friend the Secretary of State for Defence announced the Government's policy towards the future management of the royal dockyards at Devonport and Rosyth on 18 October 1993 at columns 39 41. Since then, I, my predecessor and my officials have had numerous meeting with the national officers of trade unions with members employed by the Ministry of Defence and the dockyard companies--Devonport Royal Dockyard plc and Rosyth Royal Dockyard plc--which, I should stress, have been private sector companies since 1987, to discuss the proposed privatisation of the dockyards. I have found these meetings a valuable opportunity to clarify the concerns felt by the dockyard company employees who may be affected by the proposed privatisation. At my most recent such meeting, on 20 June, I undertook to give a full and considered statement, in the light of detailed legal and other advice, of my Department's position on the issues raised with me.
My officials have also discussed these issues with the tenderers for the dockyards--Devonport Management Ltd. at Devonport and Babcock International Group plc at Rosyth--and, where appropriate, this statement takes account of my understanding of those discussions. Each tenderer, of course, remains fully responsible for any statements that it has made or may make in the future.
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The Government's preferred option for the future of the dockyards is that each should be moved wholly into the private sector as a separate and independent entity, provided the terms are right and meet the needs of the taxpayer and the Royal Navy. The Government believe that this would offer the dockyards the best opportunity to become more competitive in seeking work from my Department and other customers. As elsewhere in industry, maintaining competitiveness is crucial to employment levels; it is essential to a secure long-term future for the dockyards and their employees.My Department is now holding detailed discussions with each tenderer with a view to agreeing satisfactory sale terms. No decisions have, however, yet been taken on whether to proceed with the sale of either dockyard. As I made clear in answer to my hon. Friend the Member for Plymouth, Sutton (Mr. Streeter) on 23 November 1994 at column 146, I do not rule out other options for the future management of either dockyard; the detailed implications for dockyard company employees are, however, hypothetical in view of the Government's preferred option.
I appreciate the concerns, as expressed by the trade unions, of the dockyard company employees about the effect that the proposed sale may have on them. I understand the stance of the trade unions, but I believe that their concerns, as they have articulated them, are misplaced. They take less than full account either of the opportunities for the employees and all others concerned that would be opened up by privatisation of the existing protections available under employment law.
It is important to be clear about what is proposed. Under the proposed arrangements for the sale of each dockyard, the employer of the existing dockyard company employees would remain the same. Terms and conditions of employment for existing employees, including redundancy and pension entitlements and collective bargaining agreements, would continue unless or until specifically changed. Both tenderers are aware that contracts of employment can be varied only by means allowed for under employment law-- that is to say, only, in normal circumstances, by the agreement of the parties; unilateral variation may be a breach of contract and the law prescribes remedies in such circumstances.The law does not, however, provide for employees or trade unions to have an absolute veto over changes to terms and conditions of employment.
Each dockyard company is responsible for the terms and conditions of employment of its employees and for any changes to them, subject of course to the provisions of the term contracts, due to expire no later than April 1996, between my Department and the dockyard contractors--Devonport Management Ltd. and Babcock Rosyth Defence Ltd.--under which each dockyard is currently managed. As the trade unions have frequently referred to provisions of the term contracts, I should stress that neither term contract was intended to impede the conduct of bargaining between employer and employee, nor did either affect the legal position that contracts of employment may be terminated on notice. During the course of the term contracts, changes to terms and conditions have been negotiated between the contractors and the trade unions representing dockyard company employees. The responsibility for the management of the dockyards is now a matter for the contractors and would,
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after any sale, be a matter for the new owners. Although both tenderers have assured my Department that they will in all cases comply with all provisions of statute, statutory instruments, regulations and codes of practice relating in any way to employment, the provision of services or the conduct of collective bargaining, I do not intend to impose any constraints on the right of any new owners to manage the businesses as they see fit in order to secure future success--success which will be in the interest of the employees.I understand that discussions have begun between each tenderer, the dockyard company employees and their duly authorised representatives about the tenderers' approach to employment issues which may arise after any sale. I welcome this fact. It is not the Government's intention to intervene in these discussions or to seek to determine their outcome.
I understand the trade unions to be seeking four principal guarantees:
(i) that the redundancy entitlements of Dockyard company employees should be protected in all circumstances;
(ii) that the pensions of Dockyard company employees should be protected, with no change after any sale except by agreement; (iii) that there should be no change to terms and conditions of employment of Dockyard company employees except by negotiation and agreement; and
(iv) that there should be contractual guarantees relating to the future workload at each Dockyard.
Redundancy liabilities and entitlements
Although the term "redundancy entitlement" is widely used, it is important to be clear what is meant. The redundancy scheme at each dockyard, which is part of dockyard company employees' terms and conditions of employment, includes rules for calculating the payment that a dockyard company employee would be entitled to receive at any given point in time if made redundant in a redundancy situation as defined in the scheme. A dockyard company employee's terms and conditions therefore entitle him to receive a contingent payment on redundancy which is calculated in accordance with the rules of the scheme. As part of his terms and conditions of employment, those rules may be changed only by means allowed for under employment law or any provisions of the redundancy scheme itself. Any failure to make a redundancy payment in accordance with the redundancy scheme may be a basis for an employee to pursue a legal remedy against the employer.
Both tenderers have made clear their view that if the long-term future of each dockyard is to be secured, the issue of the redundancy entitlements of the dockyard company employees must be addressed. At the same time, both tenderers recognise the importance to the dockyard company employees of their service up to the time of any sale of the dockyards in the determination of their redundancy payments. Each tenderer has assured my Department that, in the commercial circumstances currently envisaged, which will where appropriate be the subject of negotiation between my Department and each tenderer, it does not intend to seek to impose changes in the redundancy payments due for past service under the existing redundancy scheme.
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Although the Government can give no guarantees on the way in which redundancy payments are calculated, I consider, as indicated in my supplementary answer to the hon. Member for Plymouth, Devonport (Mr. Jamieson) on 6 June at column 8, that the redundancy entitlements of the existing dockyard company employees, enshrined as they are in their contracts of employment, are already properly protected in law and that the proposed privatisation would not impair this protection.It may be helpful to set out clearly my Department's continuing policy with regard to the future recovery of redundancy costs by the dockyard operators from the Ministry of Defence. Under current arrangements and subject to certain conditions, my Department reimburses the dockyard contractors for the costs of any redundancies properly incurred. These arrangements are co- terminous with the term contracts and will therefore lapse at their expiry within the next nine months. Future provisions for any recovery of redundancy costs from my Department will be a commercial matter for negotiation between it and the tenderers. My Department's position is that the normal arrangements between it and private sector companies for recovering such costs should apply in the case of the dockyards. As it is, and will remain for some years, the major customer for each dockyard, my Department, will, recognising the particular circumstances at the dockyards, consider making a commercialy appropriate contribution to any redundancy costs at the dockyards after any sale, where these are directly attributable to special or unusual factors for which my Department is responsible, either as a direct payment to the company or through inclusion in its overheads. The detailed arrangements for any such reimbursement-- not, I stress, the details of the way in which an individual's redundancy payment is calculated--are for negotiation between my Department and each tenderer as part of the overall arrangements for any sale. Any such arrangement would, as now, be a contractual matter between the company concerned and my Department alone.
In the light of the protection afforded by the law to employees' terms and conditions and of my Department's policy on cost recovery as set out above, I do not think it appropriate to consider making further provision in relation to the payment of redundancy entitlements or liabilities.
Pensions
On the subject of pensions, I have already made clear to the House in my supplementary answer to the hon. Member for Devonport on 6 June at column 8 that accrued benefits as at the point of sale will be given protection. Under the arrangements envisaged for the proposed sale, the existing pension scheme at each dockyard would continue after sale, subject to certain amendments being discussed with the tenderers and the trustees, including, in accordance with received good pensions practice, the appointment of an independent trustee. Each tenderer has indicated that it is willing to take on the current scheme, with any agreed amendments, at the point of any sale; both tenderers have indicated that they see scope for making changes to the schemes to improve the competitiveness of the business from which the employees derive their livelihoods, but each has declared that it would seek to make such changes after consultation, negotiation and agreement wherever possible.
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The ways in which pension arrangements may be changed are governed by relevant legislation and the terms of the trust deed and rules applicable to each pension scheme. Looking beyond the proposed sale, the relevant points in relation to each scheme are, in broad outline, as follows:(i) The actuary to the scheme would generally determine the overall required contribution rate and any changes to it.
(ii) changes proposed by the employer to benefits under the scheme would, as now, require the consent of the trustees, who would include member representatives and an independent trustee;
(iii) the employees' contribution rate would primarily be for the employer to determine but this, and any change, would in the normal course of events be the subject of consultation and negotiation between the employer, the employees and their duly authorised representatives, with a view to reaching agreement wherever possible.
Any employer may bring about more fundamental changes to a scheme by terminating it and replacing it by alternative arrangements; in that event, accrued benefits relating to service up to the point of termination would be provided in accordance with the trust deed and rules. The law does not normally require the consent of the trustees or the members of the scheme to such action. It may, however, be open in certain circumstances to the members of the scheme to seek legal redress against the employer.
Although the Government can give no guarantees about the provision of pension benefits of dockyard company employees relating to service after the date of any sale, I believe that the law and the trust deed and rules of each scheme provide satisfactory protection for the pensions of existing dockyard company employees. The Government therefore see no need to make further provision in this respect. Other changes to terms and conditions
With regard to other changes to terms and conditions of employment, both tenderers know that employment law governs the ways in which these may be made and provides protection against unlawful dismissal. Changes must, wherever possible, be achieved after consultation, negotiation and agreement between the employer, the employees concerned and their duly authorised representatives where applicable; only if it proves impracticable to reach agreement may the question of unilateral change arise.
While each tenderer has made clear that it is reviewing terms and conditions of employment, both have indicated that no decisions have been taken in relation to possible changes to these. Each, moreover, has expressed its determination, where it may wish to seek changes, to continue to do so through established local procedures for dealing with such matters after consultation, negotiation and agreement wherever possible. Although the Government can provide no guarantees about the means by which such changes may be sought, we believe that employment law provides sufficient protection for dockyard company employees, in the same way as for all other comparable groups of employees, and that no further provisions would be appropriate.
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Future work loadFinally, on the question of future work load, the Government's overall policy of concentrating nuclear refitting at Devonport and providing Rosyth with an allocated programme of surface refitting work was set out to the House on 24 June 1993 at columns 447 450 and there has, as I made clear in answer to the hon. Member for South Shields (Dr. Clark) on 25 May 1995 at column 658, been no change to that policy. We have indicated that contractual provisions relating to the future work load at each dockyard could be a matter for negotiation with tenderers and this is a subject of discussion with them. Any contractual arrangements will need to take account of the many operational and other factors that lead to regular changes in the refit programme, and the award of individual refit contracts will continue to be subject to negotiations about price on the basis of my Department's requirements.
Information and consultation
The Government and both tenderers are aware of their obligations under the law and relevant agreements; each has stated that it intends to honour these. For its part, my Department remains committed to inform and consult, insofar as it has obligations to do so, those who are, or may be, affected by the proposed privatisation of the royal dockyards throughout the process of moving towards any sale transactions. At this stage, and until such time as any firm decision is taken to proceed with any sale, my Department's responsibilities with regard to the provision of information to, and consultation of, dockyard company employees relate only to the following matters:
(i) matters of general principle relating to the proposed sale; (ii) the conduct of the sale process and its associated time scale; and
(iii) the general arrangements that would apply to the future management and ownership of each dockyard, insofar as only my Department can comment on these: aspects within the remit of the prospective future private sector owner are for that company. The provision of information and consultation in relation to redundancy entitlements, pensions and other terms and conditions of employment is for the tenderer or, as appropriate, dockyard company in question.
My Department is separately obliged to consult its own employees and their representatives in respect of the implications of the proposed sale transactions and connected arrangements for Ministry of Defence staff. This process will be taken forward as and when appropriate.
In the spirit of my answer to the hon. Member for Dunfermline, West (Ms Squire) on 6 June at column 148 , I and my officials are very willing to meet the trade unions as and when appropriate over the next months about matters that are the responsibility of my Department. As I have already made clear to the trade unions, my Department's commitment, within the parameters listed above, to inform and consult at the appropriate time with dockyard company employees does not extend to standing in the way of, or influencing, discussions between each tenderer, the relevant dockyard company, its employees and their duly authorised representatives, about how the tenderers might each wish to approach employment issues after any sale. The emphasis should henceforth shift to those discussions. The tenderers, employees and their trade unions should now
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make use of all appropriate local and other channels for the provision of information and consultation to take the process forward with a view to securing the long-term future of both dockyards and their employees.Forces Exhibition, Aldershot
Mr. Tony Lloyd: To ask the Secretary of State for Defence if Nigeria has been invited to send a delegation to the Royal Navy and British Army equipment exhibition taking place in Aldershot in September. [31780]
Mr. Freeman: Nigeria has not been invited to send a delegation to the Royal Navy and British Army equipment exhibition taking place in Aldershot in September.
Attack Helicopter
Mr. Colvin: To ask the Secretary of State for Defence how much money his Department has invested in the development and other costs of each of the three final contenders and their systems in the attack helicopter contest. [30870]
Mr. Freeman: The UK is participating with France and Germany in the development of the long range TRIGAT missile system offered with Tiger by BAe/Eurocopter: the UK's share of development costs to 31 May 1995 was £210 million, at 1995 96 prices. The UK also co-operated with France during the 1980s in the development of the RTM 322 engine which is offered as an option for the Westland Helicopters Apache; the UK's share of the development costs was about £21 million. It is likely that some other equipments offered by the attack helicopter bidders may be derived, in whole or in part, from earlier developments to which the Ministry of Defence has contributed; this is, however, unquantifiable.
Memorandum of Understanding (Britain and
Indonesia)
Mrs. Clwyd: To ask the Secretary of State for Defence what were the provisions of the memorandum of understanding signed in November 1991 by the British and Indonesian Governments. [30802]
Mr. Freeman: Details of exchanges between Governments are confidential; and it has been the general policy of successive governments not to reveal them.
Al-Yamamah Programmes
Mr. Cousins: To ask the Secretary of State for Defence what (a) internal and (b) external audit functions his Department exercises (i) on its own behalf and (ii) on behalf of others in respect of contracts place under the Al-Yamamah programmes. [31279]
Mr. Freeman: All my Department's accounts are subject to the normal audit arrangements, the results of which are reported as appropriate. It is not the Government's practice to comment on detailed matters concerning individual defence export sales.
International Military Services Ltd.
Mr. Cousins: To ask the Secretary of State for Defence what (a) income and (b) offset of costs his Department derives from the administrative expenses of International Military Services Ltd. [31280]
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Mr. Cousins: To ask the Secretary of State for Defence if he will list the businesses or subsidiaries disposed of by International Military Services Ltd. since July 1991. [31281]
Mr. Freeman: I understand that International Military Services Ltd. has not disposed of any businesses or subsidiaries since July 1991.
Mr. Cousins: To ask the Secretary of State for Defence on what basis he approved the appointment of the new chairman of International Military Services Ltd. in 1993. [31282]
Mr. Freeman: The chairman of International Military Services Ltd. is elected by the board of the company but board appointments are subject to the approval of the Secretary of State for Defence as the major shareholder.
Official Dinners
Mr. Cousins: To ask the Secretary of State for Defence if he will list the guests, cost and purpose of the dinners his Department or its agencies held at the Royal Hospital Chelsea in December 1993; and if he will indicate which Ministers were present. [31284]
Mr. Soames: Only one official dinner was held at the Royal Hospital Chelsea during December 1993. This was arranged for the Sultan of Brunei, who was on an official visit, at a total cost of £1,110.19. The following people attended:
Hosts--
Mr. Jeremy Hanley
Minister of State for the Armed Forces
General Sir Peter Inge
Chief of the General Staff
General Sir John Learmont
Quatermaster General
Lieutenant General Sir Peter Duffell
Inspector General Doctrine and Training
Lieutenant General Michael Rose
Commander United Kingdom Field Army
Major General Michael Walker
Assistant Chief of the General Staff
Guests
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