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The Deputy Speaker (Viscount Allenby of Megiddo): My Lords, in place of Amendment No. 70, I call Amendment No. 70A.
7.15 p.m.
Lord Brett moved Amendment No. 70A:
- After Clause 64, insert the following new clause--
(" .--(1) In this section--
"NATS employer" includes NATS, any designated company which succeeds to the business of NATS and any employer other than a designated company which succeeds to or acquires any part of the business of NATS;
"NATS" is National Air Traffic Services Ltd whose air traffic services are to be transferred under the provisions of this Act;
"protected beneficiary" includes--
(a) any person who, on the transfer date, is employed by NATS and is an active member of the Scheme;
(b) any person who is employed by NATS on the transfer date, but is then too young to join the Scheme, and who subsequently joins;
(c) any person who is not an active member of the Scheme on the transfer date but who is subsequently entitled to rejoin as a NATS employee without a break in their continuity of employment;
(d) any person who is not an active member of the Scheme on the transfer date, but who is entitled to accrued pension rights under the Scheme at that date; and
(e) any person who is prospectively or contingently entitled to benefit under the Scheme on the death of a person covered under (a) to (d) above;
"relevant scheme" means the Scheme or any other scheme of a NATS employer that covers protected beneficiaries, and that provides benefits in respect of the protected beneficiaries which are at least equivalent in value to those applicable to the protected beneficiaries as at the transfer date;
"Scheme" means the Civil Aviation Authority Pension Scheme;
"transfer date" means the date of the transfer of NATS to the public-private partnership.
(2) NATS (or, if appropriate, the designated company) shall, subject to the consent of the Pension Schemes Office of the Inland Revenue, participate in the Scheme as a non-associated employer.
(3) If NATS (or the designated company) does participate in the Scheme as a non-associated employer, a proportion of the total assets of the Scheme shall be segregated for the benefit of the protected beneficiaries and the share of assets so segregated shall be equal in proportion to the proportion that the Scheme liabilities in respect of the protected beneficiaries bears to the Scheme's liabilities as a whole.
(4) If NATS (or the designated company) is unable to participate in the Scheme, that NATS employer shall instead make available a relevant scheme for the benefit of the protected beneficiaries.
(5) If the shares or business of NATS (or the designated company), or any part of that business, is transferred to a NATS employer other than NATS or a designated company, that NATS employer shall become a non-associated employer in the Scheme and if that is not possible that NATS employer shall instead make available a relevant scheme for the benefit of the protected beneficiaries.
(6) For the purposes of subsections (4) and (5), if a NATS employer is to make available a relevant scheme other than the Scheme, a share of the assets of the Scheme (or of the previous relevant scheme if not the Scheme) shall be transferred to the receiving relevant scheme, calculated on the basis described in subsection (3).
(7) If a protected beneficiary transfers to the employment of another employer that also participates in the Scheme but which is not a NATS employer, that beneficiary shall remain a protected beneficiary for the purposes of the benefits to be provided to and in respect of him under the relevant scheme and if that beneficiary subsequently transfers back to the employment of a NATS employer he shall still remain a protected beneficiary.
(8) For so long as a NATS employer remains as a participating employer of the Scheme in respect of protected beneficiaries, one trustee of the Scheme shall be a member representative selected from amongst the protected beneficiaries, and one trustee of the Scheme shall be an employer representative of the NATS employer.
(9) The NATS employer shall contribute to the relevant scheme at no less than the rate recommended by that scheme's actuary as being sufficient to secure the accrued rights from time to time of the protected beneficiaries in full by the purchase of annuities and the NATS employer shall not be entitled unilaterally to suspend or terminate its contributions to the relevant scheme except upon its insolvency.
(10) On the full winding-up of a relevant scheme, or on a partial winding-up which involves protected beneficiaries, any shortfall in the assets required to buy out the accrued rights at that time of the protected beneficiaries shall be met in full by the relevant NATS employer and shall be treated as a debt on the employer.
(11) If, on the full or partial winding-up of a relevant scheme, as described in subsection (10), the trustees wish, rather than securing benefits by the purchase of annuities, to pay a bulk transfer to another scheme, that other scheme shall be a relevant scheme and the transfer value payable in respect of the protected beneficiaries shall be sufficient to secure a buy out of their accrued rights if the receiving scheme were to be wound up immediately following the transfer.
(12) The NATS employer shall provide future benefits in the relevant scheme which, in respect of the protected beneficiaries, are at last equivalent in value to those available under the Scheme at the transfer date.
(13) No amendment may be made to a relevant scheme which would result in a reduction of the accrued or future rights of protected beneficiaries, nor in an increase in the contributions payable by protected beneficiaries who are active members.").
The noble Lord said: My Lords, I should explain that this amendment is simply a rather clearer version than Amendment No. 70, which we originally tabled.
I shall begin my remarks by quoting my noble friend Lord Whitty on Second Reading, who said that,
However, my noble friend offered to meet us and those other noble Lords who were concerned about the matter. Such a meeting has taken place. Alas, the Government's position remains that such a clause is unnecessary in their view. Accordingly, we now submit a similar amendment for your Lordships'
Even if my noble friend the Minister were correct to say that adequate protection already exists within the trust deed, that, in itself, will not convince the staff as long as the Government refuse to provide equal treatment within the Bill as that provided for London Transport staff. Indeed, whether or not it is necessary, there is a very real belief in the minds of the staff that if such provision is not on the face of the Bill they will not be in a protected position.
This amendment is required for a substantive as well as a political reason. That is evidenced by the decision of the trustees of the CAA pension scheme, who have determined that they will pursue legal action against the Government if they fail to provide the assurances sought by way of this amendment. I understand that the authority has earmarked up to £1 million for that task, so it is obviously not a decision that it has taken lightly. However, staff also wish this amendment to be incorporated into the Bill because it would guarantee the following--and this is where I believe some misunderstanding may have arisen in Committee.
We wish to ensure that a new NATS employer, or a successor employer, would be required to contribute to the scheme at a level that would protect the accrued rights and benefits of members--not simply the level provided by minimum funding requirements; that future owners would have to provide benefits in the scheme that were at least as good as those in the present CAA scheme; that sufficient funds should be set aside within the CAA pension scheme to reflect its liabilities to pensioners; and that NATS employees be guaranteed the right to remain in the CAA pension scheme in the event of there being subsequent transfers of ownership down the track. In that sense, I believe that the Minister pointed out in Committee that the trust deed is a powerful document and one that is not easily changed. However, even though such matters are subject to the trust deed, the truth is that the employer has considerable responsibility for--and, indeed, considerable control over--the funding of any pension scheme.
Therefore, as I said on the previous occasion, if we are not able to secure an assurance on the face of the Bill, we shall have to divide the House on the issue. I hope that my noble friend the Minister will be able to consider the matter yet again. I trust that he will give us reason to believe that the confidence that we need to give the staff is the very same confidence as my noble friend Lord Whitty expressed on Second Reading when he spoke about the quality and the commitment of the staff being absolutely key to the future of NATS.
"the staff [of NATS] are absolutely key. The future of NATS depends on the quality and commitment of its staff".--[Official Report, 5/6/00; col. 1027.]
The noble Baroness, Lady Thomas of Walliswood, moved an amendment in Committee, the terms of which were similar to those in our amendment. The express purpose of both amendments is to protect the pension rights of such vital and committed staff. When responding in Committee, my noble friend told the House that the amendment was "not justified", and went on to present a detailed explanation in support of that contention. He claimed that it would burden the PPP with an unnecessary framework. My noble friend also rejected comparison with the position of London Transport workers, whose pension provisions are protected in a later part of this Bill.
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