Enterprise

Written evidence submitted by Nick Banning (ENT 27)

I write in regard to the effect upon the Nuclear Decommissioning Authority’s (NDA) estate staff of the public sector exit cap contained in the Enterprise Bill. I am an employee of Magnox at Bradwell Power Station and I therefore confine my comments to Magnox, though the substance of what I say will affect approximately 30,000 people throughout that estate e.g. Sellafield, Dounreay etc.

I understand that the Enterprise Bill has progressed through Parliament on the 2nd February 2016. This will arbitrarily end my contractual terms with my employer, Magnox, and leave me considerably worse off in redundancy or in retirement. This is because the Bill established a public sector exit cap which will be applied to Magnox and NDA estate, despite the fact that these establishments were denationalised in 2005.

I would like to know why the Conservative Government seeks to erode unilaterally, a standard of living that I was led to expect in my redundancy or in retirement by ending my terms and conditions in this regard which have been re-confirmed by previous governments. There is no indication in the Conservative Manifesto that it will slash arbitrarily, long serving, moderate earners’ pensions and contract of employment. The Conservative Party manifesto clearly stated that it will end taxpayer-funded, six-figure pay outs for best paid sector workers and not people like me who earn substantially less.

The Enterprise Bill overturns the Energy Act of 2005 in as much as it was passed, in order to enable private sector ownership of Site Licence Companies (SLCs) such as Magnox. You will recall the NDA had to run a competition for private sector consortiums to take over SLCs. The successful consortium would then become the parent company of the SLC. The NDA contracted with the SLC to deliver its programme and enter into a parent company arrangement with a successful consortium to run the SLC. Indeed, the NDA ran a competition only 14 months ago in which the SLC was changed to Cavendish Fluor from Energy Solutions after a 10 year period, indicating that the processes of the 2005 Act was still in place.

The Enterprise Bill re-inserts Magnox into the public sector in terms of employee terms and conditions but retains a private sector SLC and effectively a hybrid arrangement; a decision that was taken without reference to Parliament or yourself. This is because the Office for National Statistics (ONS) has designated Magnox as a publicly funded body as it receives most of its money from the public purse. The Enterprise Bill establishes a public sector exit payment cap. Contrary to what is described as a ‘fat cat’ public sector worker within the Conservative Manifesto, the public sector exit payment cap will hurt our moderate earning employees with long service.

To retain highly skilled workers in the nuclear sector, employees were promised that their contractual employment and pension arrangements would be safeguarded. Why would anyone even imagine that the contractual agreement that was signed so many years ago would not be honoured? These individuals cannot claw back those years, nor can they alter plans they made for their future. Moreover, an individual in late 50’s or early 60’s are unlikely to obtain any further employment and hence sought to plan their retirement based on their original contracted redundancy terms.

If an individual were to take out a 25 year repayment mortgage and honoured all agreed arrangements around that mortgage for 25 years, paying on time in full, which the Government then unilaterally decided that the individual had only paid 12 years, one would say this was illegal as well as immoral.

An example: If a 50 year old individual with 31.5 years’ service, earning £30,446 pa was to be made redundant from Magnox their pension would amount to £12,000 pa. The pension fund would require 13 years’ payment of £156,000, less some discount (this does not go to the person), it is a pension requirement. The severance figure is £46,000. In effect, the employee with long service is being punished.

I personally fall into a similar category as the example above but had I known back then that my contractual and pensionable agreements were to be reneged upon I would have resigned and taken up the offer of employment opportunities within the private sector where I could have earned substantially more income than I have by staying loyal to Magnox. My experience gained from many years of power generation, to defueling and finally decommissioning was a skill set that Magnox wished to retain and as such made an agreement with me to continue my service for a defined period of time and help with the legacy nuclear clean-up at Bradwell Power Station. On the strength of that agreement I made plans for the eventual day I would be made redundant as effectively I was working myself out of a job! I now feel completely duped by Government and my trust in the establishment is now at rock bottom. Does the Government not consider that by changing the promised terms and conditions of Magnox staff will not have a detrimental effect on their enthusiasm to continue the decommissioning program to time and cost?

Part of the standard benefit structure of Magnox’ pension scheme is a provision that where retirement is a consequence of redundancy or reorganisation, the pension shall be paid from age 50 (or date of leaving service, if later) on an unreduced basis. It is not an option or a choice for the Trustee or employer, but the member’s right under the Scheme Rules and has been, since introduced in 1983 having been a feature of the electricity supply industry’s predecessor Staff Superannuation Scheme since the 1950’s. This provision also covers individuals who are under age 50 when made redundant.

Many long serving employees of Magnox have already accumulated significant accrued rights. Consequently, the payments required when a pension is paid early on redundancy can be substantial and often exceeds £95,000.

I am aware that there are still excessive reward packages in place that the Company and US Executives are enjoying. I am confused as to how this fits into Conservative and public sector policy, whilst there are drastic changes being proposed for my reward package.

The lasting agreement reached in 2010 where Lord Maude of Horsham said it would ‘provide a fair balance between the interests of taxpayers and the interests of civil servants and protect those approaching retirement and the lowest paid’ [Official Report, Commons, 14/12/10; col. 849], has additionally been totally disregarded.

It is important to remember these workers spent a great deal of their lives cleaning up the UKs toxic waste in a safety critical industry. The incentives above and skills required to do this job deterred them from finding new employment in other nuclear industries, for example EDF Energy, where their skills would be highly prized. It is simply wrong therefore, to renege on the agreements at the near conclusion of decommissioning and treat these as loyal workers in this shoddy and inappropriate manner.

Finally, may I ask you to consider the points I made and during the debate on Tuesday, but above all I would request you consider removing the NDA estate from the provisions of the Enterprise Bill.

February 2016

 

Prepared 18th February 2016