Enterprise Bill

Written evidence submitted by Bob Fuller (ENT 51)

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 Dungeness, 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 will be progressing through Parliament next week 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.

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.

As the Magnox sites are working towards closure a high proportion of Unite’s members are long serving employees who 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.

If the SLCs are public sector entities I would be grateful if you could explain how the excessive reward packages for you and US Executives, that you in this sector are enjoying, fit into conservative and public sector policy.

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.

Bob Fuller
Project Engineer
Dungeness A Site

February 2016

 

Prepared 15th February 2016