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7.13 pm
The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Mr. Keith Hill): I wish, most sincerely, to congratulate my hon. Friend the Member for Dumfries (Mr. Brown) on securing this debate on the National Bus Company pension schemes. I shall reply in writing to those questions that I do not tackle in my speech.
This is the second occasion on which my hon. Friend has initiated an Adjournment debate on the subject. That is a clear demonstration of his personal commitment. Many other hon. Members have also expressed their concerns to the Government about lack of progress on the NBC pensions. However, I want to join my hon. Friend in recognising the outstanding role of my hon. Friend the Member for Doncaster, Central (Ms Winterton), who has persistently raised her anxieties on the Floor of the House, in correspondence and in other representations. I believe that Parliament, and I go so far as to say the country at large, owes both my hon. Friends a large debt of gratitude.
We are dealing with a matter of fundamental social justice for more than 50,000 of our fellow citizens. Most of them are not very well off, many are now elderly and some of them are, alas, deceased without receiving their just desserts.
In 1990, under a previous Administration, in the aftermath of bus privatisation, those people were wrongly deprived of their entitlement to a share in the surpluses of the NBC pension funds. In 1996, after a protracted campaign to right this wrong, the pensions ombudsman found in their favour in a historic decision. In July 1999, the Government paid nearly £356 million in settlement of their claims. We did so willingly because we had long recognised the justice of their cause and, like the beneficiaries, we looked forward to the distribution of the surpluses in a reasonably short period of time. Beyond that hope and expectation, the Government had, and have, no direct role. In accordance with the law, it is for the trustees and their advisers to manage the distribution of this considerable sum of money.
I want to mark my recognition of the fact that the trustees have managed so far to make interim payments, in a combination of enhanced pensions and lump sums, to about 20,000 NBC pensioners whose pensions were secured with Standard Life. That began in April last year with interim payments to older pensioners and continued later in the year with payments to all those former NBC employees currently in receipt of a Standard Life pension. The later payments were in the form of tax-free lump sums.
Court approval had to be obtained for those payments, because there were legal uncertainties about whether the rules allowed lump-sum payments. The need for discussions with the representative beneficiaries delayed the application to the court for this approval, but that application was successfully made. I am pleased to say that the trustees now plan further interim payments this tax year for the Standard Lifers and that those payments are now being discussed with the Inland Revenue.
Regrettably, however, it remains the case that, 18 months after the summer of 1999, only £35 million of the £356 million has been distributed in interim payments to the Standard Life beneficiaries, and £1 million has been spent on legal and administrative costs. I say in all candour to the House that that is simply not good enough. I emphasise that the Government totally share the frustration of the beneficiaries--I say that as a Minister who, over the past year, has held meetings with the trustees almost monthly to try to push the matter along faster.
Of course, I acknowledge the complexities of the tasks facing the trustees. The two NBC schemes together had some 50,000 members. To determine how much should be paid to each of them, many thousands of individual records--all manual, uncomputerised records--have had to be updated and computerised on the basis of information provided by the potential beneficiaries. The trustees have also had to negotiate with the Inland Revenue about the current tax status of the schemes and of any payments to be made. Potential tax liability has been another reason why individual records have had to be updated.
It should also be recognised that the trustees have seen the need to proceed rather cautiously through a legal minefield. It has always been their view--I fully understand why that is so--that the distribution of the settlement must be approved by the courts so that it would be beyond subsequent legal challenge. A distribution that could not be fully implemented, or that had to be put into reverse because of a subsequent challenge, would clearly be of little use to beneficiaries.
However, a major impediment to more rapid progress has undoubtedly been the dispute as to whether the Standard Lifers and the transferees should both receive a share of the settlement. The Standard Lifers are the 40,000 members and dependants whose pension benefits were secured with Standard Life at the end of the privatisation period. The transferees are the 14,000 former NBC scheme members who made other arrangements, often with the pension schemes of newly privatised bus companies. Representative beneficiaries have been appointed to look after the interests of both those groups, and they also have their own legal representation. I understand that it has now been decided that there is a further class of transferees, with their own set of legal representatives.
The nub of the problem is that the representatives of the Standard Lifers are saying that their view is that the transferees are not eligible to receive a share of the distribution. Not surprisingly, that is not the view of the transferees. The trustees have therefore had to prepare legal proceedings to determine that basic issue and other matters on eligibility, and proceedings were commenced in October 2000.
In an effort to insert more urgency into the process, the trustees sought to bring all the parties together in a case management conference, in December. It is very much to be regretted that that conference had to be adjourned because not all the parties were ready to participate. A further case conference is now to be held on 9 February, and the parties have been given until next Friday to serve their evidence in the proceedings. That is why this debate is so timely and important.
It is not, of course, for the Government to seek to determine the issues of eligibility. However, I would say with all the force and emphasis at my command to all the representative beneficiaries involved, and to those who advise and represent them, that these issues must be urgently tackled and resolved. If they can be and if all those involved approach the issue in a properly reasonable way, I understand that there is the prospect of court approval for an agreed distribution and for final payments being made this spring. If not, we face the very grim prospect of protracted legal action stretching perhaps into next year--in other words, further intolerable delay in delivering justice to those thousands of NBC pensioners.
The responsibility and the choice rest with all those who are involved with that conference on 9 February. I urge all of them to respond accordingly. In case there are any doubts that I am addressing them and their clients directly, it is appropriate for me to list the names of all the legal firms involved. The trustees are represented by the solicitors Taylor Joynson Garrett; the representative beneficiaries for the Standard Lifers and the transferees are represented, respectively, by Baker & McKenzie and by Nabarro Nathanson; and the new category of transferees that I mentioned will be represented by Macfarlanes. I say to all of them, quite simply, that further delay in resolving these matters will only add to the distress of NBC pensioners and would be an intolerable protraction of settling their just claims.
Further delay will also reflect no credit on the legal profession, which, very evidently from the correspondence that I and other hon. Members have received on the issue, has understandably already been the object of so much criticism and odium.
I address those last remarks not only to the solicitors already involved, but to those who might be tempted to carve a role for themselves in further legal proceedings. I am thinking particularly of the firm of Halsey Meyer Higgins, which has been a most active correspondent on the issue. Again, quite simply, the issue does not need more lawyers; it needs an appropriate sense of urgency and a will to reach agreement.
I close by addressing, through the House, one of the key--perhaps the key--figure in all the 15 years of the issue. He is of course Frank Wheeler, a constituent of my hon. Friend the Member for Dumfries and one of the representative beneficiaries for the Standard Lifers. I am second to none in my admiration and respect for his pursuit of the issue over all the years. However, I ask him very directly whether it is not now right to put his influence and weight behind early agreement with the transferees. Such agreement is now the only way of completing the distribution and delivering justice to all his fellow former employees of the NBC. No one--least of all the battalion of lawyers; and not even the redoubtable Frank--should stand in the way of that much sought-after, much hoped-for outcome.
- Adjourned accordingly at twenty-four minutes past Seven o'clock.
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