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Postal Services Bill [HL]

Amendment 52 seeks to extend Clause 17(1) by adding, at the end of line 4, two specific points that will make the intention of the clause easier to understand. The first is: ""If an order is made under subsection (1) which includes a provision for the division of the RMPP into different sections, it shall provide that the sections are segregated"." The second point is: ""For the purposes of subsection (1A), the sections of the RMPP are segregated if—""(a) any contributions payable to the scheme by an employer in relation to the scheme or by a member are allocated to that employer's section; and""(b) a specified proportion of the assets of the scheme is attributable to each section of the scheme and cannot be used for the purposes of any other section"." Proposed new subsection (1C) makes it clear that: ""For the purposes of subsection (1B), the Secretary of State shall be deemed to be an employer"." Before I forget, I want to address the comment made to me by the noble Lord, Lord Skelmersdale, about my reference to privatisation. The Secretary of State can speak about public ownership until he is green in the face, but I will continue to describe the selling-off of part of Royal Mail as privatisation. It is all right to shake heads, but anybody with any interest in this matter will see that it is the thin end of the wedge. That is why some of us will fight to the end to prevent the privatisation of Royal Mail. To return to Amendment 52, which deals with segregation, Clause 16 is the method flagged up by the Government for dealing with the deficit. Assets of the scheme will be taken into the Consolidated Fund and matching liabilities paid through a new public scheme. Clause 17 provides an alternative. The existing Royal Mail pension plan will be carved up into sections like the segments of an orange. Each employer would have his own section for future service provision. Past service liabilities would be transferred to a further section sponsored by the Secretary of State. Something very similar was done when the railways pension scheme was set up. Each employer had his own section but there was a further section just for pre-privatisation pensioners and deferred pensioners, which the Government were responsible for. The point of the amendment should be uncontroversial. If a pension scheme is carved into sections, the sections can be segregated or remain unsegregated. Segregation means that the assets and liabilities of each section are ring-fenced. If the sections are not segregated, the assets of one section can be used to cross-subsidise another one. Amendment 52 requires a sectionalised scheme to be segregated. That means that if a section for qualified accrued liabilities is sponsored by the Secretary of State it cannot be cross-subsidised by the Royal Mail or Post Office companies. That means that the new companies, once they have their own sections, cannot be made responsible for the deficit that the Secretary of State has taken on. That is exactly what happened in the railways and electricity suppliers’ scheme. I beg to move.