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Postal Services Bill [HL]

My Lords, these amendments go to the heart of the definition in Clause 15 of the liabilities that the Government propose will be transferred from the Royal Mail pension plan to a new scheme. Two parts of the definition are the subject of these amendments: the qualifying members of the plan—in other words, the members of the scheme who will be affected by the Government’s proposals—and the qualifying time that is the dividing point between the historic liabilities that it is proposed will be transferred to government and the subsequent liabilities that will remain with the company-backed scheme. Before I address the amendments, perhaps I may respond first to my noble friend Lady Turner, who asked one or two questions about qualifying members. She asked whether, if the order is retrospective, members who join the scheme between the date when the order comes into effect and the date of the order will be included. The Government propose that individuals who were members at 16 December 2008 will be covered. This is not affected by the date on which any order is made or the possibility that the order could have retrospective effect. As for employers who have rights to join the scheme but have yet to do so, the changes introduced to the scheme in April 2008 mean that it is no longer open to new members. If members had accrued rights in the scheme by 16 December 2008, those qualifying accrued rights would be transferred to Government. If an employee had a prospective right to join the scheme but was not a member and had no accrued rights at that date, they would not be affected by the measures proposed here. The noble Lord, Lord Skelmersdale, asked specifically about the definition of "qualifying time", which is, ""the time immediately before such date as may be prescribed"." I think he asked when, if 16 December is the prescribed date, the qualifying time will be. The answer is that if that is the prescribed date, we would expect that the qualifying time would be just before midnight on 15 December. I hope that that is an adequate answer to his question—or an answer, at least. Together with the other definitions provided for in this clause and the related government policy statement, the definition of these two terms serves to set an important cut-off point that provides certainty for members on the effect of the Government’s proposals and defines and limits the liabilities for which the Government and, ultimately, the taxpayer will take responsibility. Given this importance, the Government cannot support the amendment proposed by the noble Lords, Lord De Mauley and Lord Skelmersdale, the effect of which would be that the taxpayer would be assuming an open-ended commitment to meet the cost not just of historic liabilities but also of liabilities related to current and future service of qualifying members. Not only would that represent poor value for the taxpayer but it would certainly create severe difficulties in obtaining state aid clearance from the European Commission. If the Government were legally obliged to meet the cost of current and future service, it would represent a significant ongoing subsidy to Royal Mail, which would not be attractive to the European Commission. With regard to the timescales for state aid clearance, on which I was questioned, there is no fixed timescale for that. We expect that the earliest that clearance would be given would be late 2009, but it is equally possible that it may not be until later in 2010. We have not received any indications from the Commission about its likely view. We have had a number of preliminary meetings with the Commission but, as the formal notification has not yet been submitted, it is too early to expect it to give its view.