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Lord Mackay of Ardbrecknish: It may be because I am so involved in the Bill, but there seems to be plenty of publicity about the issue in the newspapers and on television and radio.

Baroness Seear: They talk about nothing else in my local hairdresser.

Lord Mackay of Ardbrecknish: Yes. I would have thought that they would have talked about the appearances of the noble Baroness in the House of Lords when they see her on television.

I hear what the noble Baroness says, but the ground on which we arrived at our conclusion is the simple ground that the court ruling said that this was pay, and we have taken the time limits from the Equal Pay Act.

Baroness Hollis of Heigham: Before we decide what to do about the amendment, can the Minister clarify one point? I understood—but I may have misunderstood—that the Vroege and Fisscher cases provided only that domestic time limits for bringing claims should be applied but did not say that damages could or should be limited. Therefore, that would still allow individuals to go straight to the European Court of Justice under Article 119, whatever the Minister may have said. Is that correct?

Lord Mackay of Ardbrecknish: I am not entirely sure about the answer to the second part of the question. I know that the two cases made it clear that national time limits may be applied to such cases.

In relation to damages we are talking about access to pension schemes. That is the primary point. I dealt with that as the essence of the matter.

The answer to the second question of the noble Baroness is no. In relation to national time limits I have said that the court clearly decided that national time limits may be applied in such cases.

Baroness Hollis of Heigham: My second question does not permit an answer of yes or no. I wonder what the Minister thinks he is saying.

Lord Mackay of Ardbrecknish: We have now gone some way from the original question. Perhaps the best and tidiest way to proceed is for me to consider the question in some detail and give the noble Baroness a proper response.

Baroness Hollis of Heigham: I thank the Minister. As I said, these are probing amendments and we need further information.

Like the noble Baroness, Lady Seear, I was disappointed. I see the thrust of the Minister's logic. If one says that a pension is deferred pay one applies procedures as though one were in the workplace. However, the Minister is well aware, because the noble Baroness put the point forcefully, that once one is retired one is not in the workplace. One is not tapped into that information. One does not have trade union support.

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One does not receive the literature and information. One does not have the financial resources to pursue claims in the normal way.

While I take on board some of the points that the Minister made, the period in which one should be able to bring an action could at the very least be extended to a year. When one retires one tries to sort out one's money, one's mortgage, domestic arrangements and so on. A great deal happens in a short time. The Bill seems not to reflect the real life situation in which people find themselves.

I am not persuaded about damages, although the Minister will provide further information in his letter. We accept the time limit for bringing claims but not yet in relation to damages. I do not accept his reasoning about the civil courts. While we recognise that tribunals have many virtues, there is a long queue of some 40,000 people. Although tribunals are to some extent the equivalent of small claims courts, once claims are no longer small claims but large claims involving substantial amounts of money—in some cases amounting to six figures—there is an argument for saying that they should be brought within the more formal proceedings of county courts and the High Court, where legal aid is available. I wonder whether we can persuade the Minister at least to give us an undertaking that if he thinks there is sense in the argument he will come back to the matter.

Lord Mackay of Ardbrecknish: Just as the noble Baroness will read what I said, so we shall read the proceedings and pick up the various points because we wish to get the Bill right and fair.

The six-month period to which we refer does not come into effect until the day of enactment. Between now and then current cases are a matter for the court or tribunal. I am happy to study what the noble Baroness said regarding the court point. I am not convinced on that. I shall ask a simple question as to how many cases exceed the limit of £25,000. I suspect that there are not many. Consistent with the Act, which is the context into which we put the provision, I still believe that an industrial tribunal is the best place. However, I shall read with care what the noble Baroness said.

Baroness Hollis of Heigham: As the bulk of cases have still to go through the courts, we do not know what the percentage will be. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 145YT not moved.]

Baroness Hollis of Heigham moved Amendment No. 145YU:

Page 32, line 12, at end insert ("or such earlier date as provided in subsection (7) below.
(7) If on any valuation day the amount of the scheme assets is greater than 105 per cent of the amount of the scheme liabilities the amount of the excess shall in a prescribed manner be applied in providing equalisation in the terms on which members are treated in relation to pensionable service from a date before 17th May 1990.").

The noble Baroness said: Amendment No. 145YU turns to a slightly different issue and is grouped with Amendment No. 145YX. It seeks to make clear that when trustees make scheme amendments to comply with

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the equal treatment rule those are subject to Clause 60 in the Bill, which places restrictions on amendments which adversely affect members' accrued rights. The effect is to ensure that accrued benefits are equalised on the more favourable terms. The European Court of Justice has ruled that that is required under European law.

Unfortunately, the ECJ said that there was nothing in European law which forbids adverse changes in benefits to be accrued in the future, but there are already strong arguments that that is against our domestic employment law. We wish to know the Government's intentions on the issue. It is a probing amendment. We believe that it is an issue on which there is a case for levelling up.

Amendment No. 145YX proposes that retrospective equalisation should be required to the extent that a scheme has a surplus in excess of 5 per cent. of its liabilities. The only argument that has been used against that proposal is one of costs. We believe that where there is a surplus that argument cannot apply. Again, we shall welcome a response from the Minister on that issue. I beg to move.

Lord Mackay of Ardbrecknish: Amendment No. 145YU would mean that any surplus in a pension fund would have to be used for the purpose of providing equal treatment between men and women for periods before 17th May 1990, the date of the European Court of Justice ruling in the Barber case.

The European Court has clearly ruled, notably in the Ten Oever and Coloroll cases, that equalisation is not required before 17th May 1990, but is required for service after that date. This is a minimum requirement and there is nothing in this Bill which would prevent schemes using a surplus to provide equality for earlier service if they wish to do so. However, we do not believe that it would be right to impose more stringent requirements or a heavier regulatory burden on schemes than European law requires. We do not believe that it should be a matter for Government to dictate that any surplus should be distributed in favour of scheme members in this way. I am therefore unable to support the amendment.

Turning to Amendment No. 145YX, I entirely agree with its sentiments. However, we do not believe that it is necessary. Clause 58 gives trustees or managers of schemes such power as may be necessary to enable them to amend scheme rules to provide equal treatment. The clause does not grant trustees or scheme managers a wide power to amend scheme rules at will. The power under this clause is limited to amendments to provide equality.

The European Court of Justice has made clear that equal treatment is required for periods of service from 17th May 1990, and that where such equality has not been provided benefits are automatically levelled up to the more favourable treatment until such time as the scheme equalises benefits for periods of future service. Clauses 55 and 56 of this Bill are intended to have the same effect.

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Although the court ruled that Community law did not preclude schemes from equalising benefits at a less favourable level for periods of service before 17th May 1990, the provisions of Clause 60 would, in effect, prevent this from happening.

Clause 60 is overriding in effect. It prevents detrimental amendments being made in relation to any rights accrued before the date of the modification unless the trustees have satisfied themselves that the certification requirements or the requirements for consent have been satisfied. I can assure the noble Baroness that Clause 60 provides the necessary safeguards that she is seeking and that there is no need to make Clause 58 explicitly subject to that clause. Perhaps in view of my explanation she may be prepared to consider withdrawing the amendment.

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