House of Commons Hansard Debates for 15 Jan 1997 (pt 7)

11.24 am

Mr. Eric Martlew (Carlisle): First, let me declare an interest. At the last general election I was sponsored by the Transport and General Workers Union, many of whose members belong to the pension fund that we are debating. I shall sit down if the Minister accepts the invitation offered by my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) to come to the Dispatch Box and promise to put the matter right today. He obviously does not wish to do so.

I have been in public life for 25 years. When I first entered public life, I was an angry young man. I am glad to say that I am still angry. My constituency is the hub of Cumberland and the south of Scotland for the bus companies, so many of my constituents have worked in the industry for many years. They were never paid a great deal of money even when the industry was nationalised. They now work for Stagecoach, and I suspect that they are paid considerably less. However, they provided an excellent service and they paid into the pension fund.

I have a letter from my constituent, Mr. Reay, who paid into the pension fund from its inception in 1974 until it was wound up in 1987. He expects the money that the

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Government took illegally to be returned to him and the other 40,000 pensioners. He is right. Morally, the Minister has no argument.

The Government took the money illegally, and now they are delaying giving it back. Everyone in the Chamber realises that, when the case goes to court, the Government will be found to have acted illegally and the money will have to be paid back. There has already been a 10-year delay, and some pensioners have died. The Government have taken a cynical approach. They realise that, if they delay another two years, more pensioners will die. It is a disgrace. I am not as charitable about the Minister as my hon. Friend the Member for Crewe and Nantwich. He could get up and say, "We were wrong. The ombudsman said we were wrong and we shall pay back the money." It seems that that will not happen.

Before nationalisation, Carlisle had several bus companies--the Ribble, the United and the Cumberland--which were amalgamated into the National Bus Company. My constituents and 40,000 others paid into the pension fund. Now, we have a private monopoly, Stagecoach, which is now bidding for the Regional Railways franchise and the west coast main line. Stagecoach could end up with a monopoly on public transport in the region. Perhaps that is for another debate, but it is a significant consideration because Carlisle is a railway centre and there is concern that what has happened to the bus pension fund may happen to the railway pension fund.

The Government are not doing the honourable thing. The £168 million could come out of the Treasury's contingency fund. There would be no problem with that--such is the purpose of the contingency fund--but because the Government are deeply immersed in asset stripping other former nationalised companies, they realise that this could be the tip of the iceberg and that hundreds of millions of pounds might have to be returned to pensioners.

I have received many letters on the subject. Some are from traditional Conservative supporters who will not be voting Conservative at the next election. The Government are in their dying days. They could do something honourable before they go. After the general election, the Minister will not be dealing with the matter from the Dispatch Box. I certainly hope that an incoming Labour Government will resolve the matter. The Government have behaved like a very shady double glazing company--

Mrs. Dunwoody: Without the windows.

Mr. Martlew: Indeed. The Government have taken the money without providing the service, and they have been caught out. Trading standards officers would write to any organisation that acted in such a way and say, "Look, you are wrong. You should give the money back." The Government are telling pensioners, "Yes, we are wrong, but we are not going to give you the money back. If you want it, you have got to sue us for it."

How can we expect any other organisation or private pension company that is found to be in breach of regulations by the pensions ombudsman to take any notice of such a judgment when the Government, who set up the

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system, refuse to? The Government have undermined the ombudsman system. I hope that they realise that the significance of the matter goes far beyond the case before us. Other organisations will ask why they should take any notice of the system when the Government do not. The matter reminds me a little of the Deputy Prime Minister admitting that he used to delay his payments when he worked in the private sector. Such behaviour sets the wrong example to the rest of the country.

I am very angry, my constituents are very angry and there is no excuse for what has happened. There is no doubt that it is immoral. People who are not receiving a fantastic pension to start with have paid in money. They were low paid workers and they are receiving very low pensions--the standard of living of some of them is just above the social security level and actually saving the Government money. Why can the Government not accept that the money should be given back to the pensioners to enable them to spend their retirement in some comfort? The matter concerns people and the right thing to do. The Government are a disgrace.

Although we should not have needed today's debate, it has given the Minister the opportunity to put everything right and to be thought of as an honourable man who has done the decent thing. There are 40,000 people out there who would applaud him if he stood at the Dispatch Box today and said that the Government are wrong, that they are sorry, that the delay of 10 years is unacceptable, but that they will end the delay, put the matter right as soon as possible and ensure that the bus pension fund pensioners get the money that they deserve.

11.31 am

Ms Glenda Jackson (Hampstead and Highgate): I apologise to you, Madam Deputy Speaker, the Minister and my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) for not being in the Chamber when the very first word in this extremely important debate was uttered.

I congratulate my hon. Friend not only on securing this Adjournment debate, but on being so instrumental in introducing for the very first time on the Floor of the House what, as my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) pointed out, can only be termed the debacle of the bus employees superannuation trust pension scheme.

I intend to be brief because much that needs to be said about the Government's drab, indeed squalid, treatment of the BEST pensioners and pensioners of other privatised industries has already been defined in passionate detail by the extraordinarily wonderful speeches made not only by my hon. Friend the Member for Kingston upon Hull, North but by my hon. Friends the Members for Crewe and Nantwich and for Carlisle (Mr. Martlew). They all spoke in great detail about what has produced this debacle--and with great passion on behalf of their constituents.

The pensions ombudsman's report into the handling of the BEST trust scheme prior to the privatisation of the National Bus Company makes grim reading. The ombudsman uses the phrase "a breach of trust" of which pension fund members were the victims. He refers to the then pension trustees as being "threatened" and of "big sticks" being wielded. He talks of "fraud" and

"an improper use of power",

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all with the Government's full knowledge and consent.

My hon. Friends the Members for Kingston upon Hull, North, and for Crewe and Nantwich referred to the role that the trustees have played. It is true that the ombudsman's report finds against them and the company. It is equally true, however, that Ministers were on hand as every threat was made, every ultimatum was issued and every amendment was made to the pension arrangements of up to 80,000 National Bus Company employees. It all occurred without the knowledge or consent of those employees.

My hon. Friend the Member for Crewe and Nantwich referred to insider trading. The activity defined in the ombudsman's report would normally be associated with the cut-throat City takeover battles of billion pound multinationals. Fraud, breaches of trust, threats and unlawful activity should have no part in the pension arrangements of men and women who, having worked hard all their lives, seek nothing more than security in their well-earned retirement. Let us be clear, the pensioners who are the subject of today's debate are not seeking charity. They are not scrounging. Nor are they asking for handouts. As employees of the former National Bus Company, they gave years of dedicated service, believing--indeed, trusting--that, having worked for their pension entitlements, they would be theirs by right.

We are engaged today in a debate on the bus employee superannuation trust not only because of the actions of the trustees or the company, but because of the actions of Ministers. My hon. Friend the Member for Kingston upon Hull, North said that this debate was not about the merits of privatisation, but he would agree with me that the Government's dogmatic dependence on privatisation and their antipathy towards anything prefaced by the word "public"--be it public transport, public good, public interest or public welfare--directly threatened the future of the BEST scheme. The Government's dogma of privatisation directly led to the activities described in the pensions ombudsman's report and resulted in a loss to the BEST pensioners of at least £168 million.

What did such a dogmatic policy of privatisation and deregulation, which cost the BEST pensioners so much, achieve for the bus industry and the passengers who depended on it? Bus wars on our streets, a 30 per cent. drop in passenger journeys and a 21 per cent. increase in fares. The policy was costly not only for BEST pensioners but for the entire country.

As hon. Members have said, not only have BEST fund members seen the pension fund that they worked so hard to build pillaged by the Government; there is the £30 million that has been removed from the National Bus pension fund, the £55 million from the National Grid employees' pension fund, the £55 million from the Rosyth dock workers, the £500 million from the British Rail pensioners' surplus--the list is almost endless. Time and again, the pension rights of Britain's workers have been used to sweeten the bitter pill of Tory privatisation policy.

Indeed, only this week, the dead hand of privatisation began to hover over the pension rights of another set of public transport employees. The London Transport pension fund is valued at more than £2.5 billion, and more than 90 per cent. of London Transport's 18,000 employees are members of the scheme, yet they too see the pension entitlements that they worked for under threat--not from the vagaries of the equities market, but from the Government.