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".--(1) In this section--
"NATS employer" includes NATS, any designated company which succeeds to the business of NATS and any employer other than a designated company which succeeds to or acquires any part of the business of NATS;
"NATS" is National Air Traffic Services Ltd whose air traffic services are to be transferred under the provisions of this Act;
"protected beneficiary" includes--
(a) any person who, on the transfer date, is employed by NATS and is an active member of the Scheme;
(b) any person who is employed by NATS on the transfer date, but is then too young to join the Scheme, and who subsequently joins;
(c) any person who is not an active member of the Scheme on the transfer date but who is subsequently entitled to rejoin as a NATS employee without a break in their continuity of employment;
(d) any person who is not an active member of the Scheme on the transfer date, but who is entitled to accrued pension rights under the Scheme at that date; and
(e) any person who is prospectively or contingently entitled to benefit under the Scheme on the death of a person covered under (a) to (d) above;
"relevant scheme" means the Scheme or any other scheme of a NATS employer that covers protected beneficiaries, and that provides benefits in respect of the protected beneficiaries which are at least equivalent in value to those applicable to the protected beneficiaries as at the transfer date;
"Scheme" means the Civil Aviation Authority Pension Scheme;
"transfer date" means the date of the transfer of NATS to the public-private partnership.
(2) NATS (or, if appropriate, the designated company) shall, subject to the consent of the Pension Schemes Office of the Inland Revenue, participate in the Scheme as a non-associated employer.
(3) If NATS (or the designated company) does participate in the Scheme as a non-associated employer, a proportion of the total assets of the Scheme shall be segregated for the benefit of the protected beneficiaries and the share of assets so segregated shall be equal in proportion to the proportion that the Scheme's liabilities in respect of the protected beneficiaries bears to the Scheme's liabilities as a whole.
First, let me reassure the House that the Government regard the matter of pensions protection for air traffic control staff as one of great importance. Pensions affect us all, and I can well understand why it is a matter of such importance to NATS employees. I must therefore make it clear that we would not act in any way that would put them under threat, and we are not doing so. We have considered in some detail the adequacy of protections for NATS employees. We believe that the necessary protections are in place without the need for this amendment. I shall attempt to explain, as briefly as possible, what the protections are.
First, the Civil Aviation Authority pension scheme, to which NATS staff currently belong, is to be amended to make it possible for staff employed by the public-private partnership to remain members of that scheme. That will involve NATS becoming a non-associated employer within the scheme. This arrangement will prevent cross-subsidy between the new NATS section of the scheme, which will relate to a company classified to the private sector, and the CAA section of the scheme, which will remain in the public sector. It will enable NATS staff to continue to enjoy the benefits that they currently enjoy.
Perhaps I can digress briefly to explain the position of current pensioners and deferred pensioners within the scheme. I assure the House that the position of these two groups will remain unaffected by the PPP. They will remain in the Civil Aviation Authority pension scheme, and they will be in the CAA section of that scheme, which will also include current CAA staff. This section will, as I have just mentioned, remain in the public sector. Both groups of pensioners will continue to receive benefits in exactly the same way as they do now.
Returning to the position of existing NATS staff, we have made it very clear to all those bidding to be our strategic partner in the PPP that securing the continued participation of current staff in the scheme is a fundamental condition of being considered for that role. In addition, we will put into the strategic partnership agreement a binding commitment--enforceable by law--that guarantees the continuation of that right on terms at least as favourable as those that exist now.
Mr. Raynsford: As the hon. Gentleman will recall, a draft of the strategic partnership agreement was made available to all members of the Committee considering the Bill. The matter was discussed in detail in Committee, and that is a sign of our absolute commitment to open government in this respect.
Mr. Foster: I asked the Minister that question because the issue was raised in the other place when Lord Brabazon asked Lord Whitty whether the strategic partnership agreement would be published. Lord Whitty replied:
Mr. Raynsford: Lord Whitty said that for the obvious reason there will inevitably be some confidential elements in the document. The key point is that we have made a commitment on the provisions relating to the guarantees for pensions, and we made available the draft document to the Committee, so that there could be a thorough consideration of all the basic principles behind the strategic partnership agreement.
The commitment that I outlined is a very significant safeguard, underpinned by the Government's continued participation in the PPP. NATS staff will also enjoy the protections on pensions that exist under the law of the land, including the provisions in the Pension Schemes Act 1993 and in the Pensions Act 1995. They provide, among
I am sure that some hon. Members will draw attention to the precedents for statutory protection in past privatisations. I shall focus on the most recent case where a comparison is made--that of the underground railway staff in London. The London Underground case is much more complex than that of NATS. In the case of NATS, we are arranging a once-and-for-all transfer of the company to the private sector. There is no subdivision of the company and there is no reorganisation of the industry into a number of parts, so there is no need for provision to deal with the subcontracting that occurs in the railway industry. There is no provision for the return of some parts to the public sector, nor are the trust deeds of the two schemes or the arrangements for changes to those deeds comparable--prospective benefits could be changed under the London Underground deed. The two cases cannot, therefore, be regarded as comparable.
Before 1997, the range of outcomes of transfers to the private sector, in terms of pension protection, was highly variable. In 1997, this Government set out to reform the protection of pensions. In 1998, interim new guidance was issued by the Cabinet Office under the title "Better Quality Services". It emphasised the importance of protecting staff pensions in any restructuring that involved private sector partners, and required the quality of that protection to be a factor in assessing bids for partnership. Then, in June 1999, the Treasury issued definitive guidance under the title "A Fair Deal for Staff Pensions", which was incorporated into broader guidance on treatment of staff issued by the Cabinet Office at the beginning of the year.
The objectives of those reforms were simple: to take the fear out of public sector reform and sales as far as pensions were concerned, and to set a common standard of protection that all projects should pass. We now have a comprehensive framework of protections in the standard of treatment of staff. It is a fair deal not only for the staff but for private sector businesses that bid to enter into partnership to deliver public services.