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Lord Fraser of Carmyllie: My Lords, as is often the case when dealing with groups of amendments, the most interesting amendments may well be the last to be considered, such as Amendments Nos. 37 and 39. In advance of our consideration of those amendments, perhaps I may take this opportunity to explain how matters have moved on over the summer. It might be useful if I do so now rather than at a later stage.

It must clearly be wrong to suggest that a scheme without full index-linking cannot provide benefits comparable to the benefits currently received. There have been numerous occasions on which new schemes have been adjudged to be of comparable value to the old scheme although the new scheme does not guarantee full index-linking. I recognise the strength of feeling among employees about index-linked pensions. It was bearing that in mind and in the light of the further consideration given to the issue since the Bill was last before your Lordships that I am now able to go a little further than previously. The House may recall that in Committee I said that a fully index-linked scheme was not ruled out by the terms of the Bill. I can now say that not only is it not ruled out; it is one of the options that is being actively considered by AEA Technology as forming the basis of a new scheme for existing employees.

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I believe that the House will understand why it would not be possible for me to give a commitment now that a fully index-linked scheme will be introduced. It is not within my gift. It will be for the employer company to make proposals—whether that is AEAT or a purchaser—on the form of the new scheme. The scheme would also be the subject of discussion and negotiation with the unions, taking into account the interests of employees and the welfare of the company. What is in the interests of the company must be in the interests of its employees as it is only with a fully competitive company that their jobs will be secured.

In addition, statutory consultation will be required under the terms of the Bill. It would not be right for me to prejudge the outcome of those consultations. I have given a commitment that they will be meaningful and I shall stick by it. I appreciate that those comments are slightly out of order, but as this is an important matter on which there has been some movement, and as I think that that is an important statement which the trade unions would like to hear, I have taken this opportunity to raise the matter now.

Returning to Amendments Nos. 26 to 32, we had a full discussion in Committee. We have no desire to do anything other than to ensure that employees who are transferred under the provisions of the Bill have their pension rights protected. That is why we have written on the face of the Bill statutory protection for employees to have a pension scheme which gives the same overall level of benefits as they currently enjoy. When employees are transferred from the public service (whether in privatisations or arising from contracting out) standard practice has been to end their membership of a public service scheme. Although I recognise that Amersham was an exception many years ago, I have to say that the practice of not being allowed to remain in a public service pension scheme is now consistently followed. We all want AEA Technology to compete effectively in the private sector. Ultimately, that is the only way in which jobs can be secured and their terms and conditions maintained.

We do not believe that it would be right for private sector employees to remain as members of a pension scheme which reflects the different circumstances of the public sector. That is no different from the practice in the private sector where schemes reflect the different circumstances of individual employers. The authority, as an employer, has devised its public service scheme to provide what it considers to be appropriate pensions for its employees. It is for the private sector employer to develop arrangements which are appropriate for its employees and the operation of its business. We see no reason why there should be an exception here.

The particular circumstances about which I was previously invited to comment—the invitation has been repeated today—relates to rail. Having considered the matter, it would appear that there is no parallel with the situation of AEA Technology. The rail industry already had a pension scheme in the private sector mould. That scheme could therefore be replicated in the private sector. That whole industry is moving to the private sector and the nature of the work means that there is

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likely to be movement between the new companies. In that case, it was not unreasonable that the protection was given so that pension rights could accrue on the same basis while employees remain in the industry. The situation with AEA Technology is very different. The authority's pension scheme cannot be replicated in the private sector because it contains features which mean that the Inland Revenue would not grant it tax-exempt status; nor, as I have revealed, is it intended that there should be a plethora of companies between which employees can switch.

I apologise for taking a moment or two longer than usual to reply to a group of amendments, but I hope that what I have said sets the scene relating to the pension provisions which are the subject of the next group of amendments. I hope that with that explanation the noble Baroness will feel able to withdraw the amendment.

4.45 p.m.

Baroness Turner of Camden: My Lords, I thank the Minister very much for that statement which makes a considerable difference to the amendments that we have tabled. The Minister was right to say that the employees are very concerned about index-linking, a point that we have repeatedly made from this side of the House. I am very glad to have heard that statement from the Minister this afternoon. I am sure that employees in the industry will be glad to have had a statement to the effect that index-linking will be one of the options available under the new provisions. In those circumstances, it is certainly not my intention to proceed with the amendments this afternoon. To some extent what the Minister said deals with many of the issues that we had intended to cover under the heading "Pensions".

Lord Fraser of Carmyllie: My Lords, before the noble Baroness sits down, perhaps I may intervene. This is such an important matter that I cannot have any employees misunderstanding the position. Perhaps I may repeat what I said. I said in Committee that a fully index-linked scheme was not ruled out by the terms of the Bill. That was understood. What I am saying is that not only is that not ruled out now, but it is one of the options which is being actively considered by AEA Technology as forming the basis of a new scheme for existing employees. I cannot give a commitment because it is not within my gift to do so.

Baroness Turner of Camden: My Lords, we understand that the Minister cannot go further this afternoon. We are very grateful for that assurance. In the light of it, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 27 to 35 not moved.]

Baroness Turner of Camden moved Amendment No. 36:

Page 30, line 16, at end insert ("except that, where any person consulted under the provisions of sub-paragraph (3) above is not satisfied with any proposals made by the Secretary of State in the course of such consultations, the Secretary of State shall not make a direction under this paragraph until that person is so satisfied unless that person has unreasonably withheld his satisfaction.").

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The noble Baroness said: My Lords, I beg to move Amendment No. 36. The amendment refers to consultations and makes provision for anyone who is not satisfied to have arrangements withheld until he is satisfied. The amendment says that the person shall not unreasonably withhold satisfaction. The other amendments in the same grouping refer to consultation with the unions. This matter was discussed in Committee. Although I am very pleased with the statement that has already been made this afternoon, there is an issue about consultation and what is meant by "relevant unions". Last time round the Minister said that there would be consultation with the relevant unions. The concern is as to precisely what that means, who decides who are the relevant unions and matters of that kind. Those issues arise under the set of amendments which deal with consultation. Perhaps the Minister would be kind enough to respond.

Lord Fraser of Carmyllie: My Lords, I am happy to respond briefly to this important point. I hope that during Committee I gave a clear commitment that trade unions, or persons who under the provisions of the Bill represented employees, would be consulted. I am happy to repeat that commitment today. It may be helpful if I say that, in the light of the announcement on vesting that I made in relation to the first group of amendments, the department has already given some consideration to the drafting of a consultative document on the issue of a direction under paragraph 3 of the schedule. The noble Baroness may be interested to know that that draft document includes in the list of consultees all of the relevant trade unions.

Baroness Turner of Camden: My Lords, in the light of that statement I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 37 to 50 not moved.]

Lord Fraser of Carmyllie: My Lords, the progress of business has been highly satisfactory. I am delighted that we have been able to achieve such a measure of agreement. In the circumstances, we appear to have made greater progress than that anticipated by some who are otherwise very familiar with the workings of your Lordships' House. I fear that it has rather taken them by surprise. Unless I keep talking for an unnecessary and inelegant period of time, I believe I have no option but to beg to move that the House do adjourn during pleasure until five o'clock.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 4.53 to 5 p.m.]

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