---

Postal Services Bill [HL]

Amendment 58 requires services contracted out to maintain a dispute resolution procedure, which I should have thought is fairly straightforward. Amendment 59 requires that the Royal Mail pension plan remains an occupational pension scheme under trust. We had a debate on that earlier. Clause 17(5) as drafted allows, but does not require, the Secretary of State to include provision allowing the scheme to remain contracted out and salary-related, and to have a dispute resolution procedure. There are two points here. First, a decision to contract in, to change the scheme to a defined contribution scheme, or to change the dispute procedure, should be made by the trustee as a rule amendment. The order should not interfere by permitting the Secretary of State to provide that it is not contracted out or not salary-related, or does not have a dispute process. That is why Amendment 58 states that "may" should be replaced by "shall". The second point is more important. Nothing in Clause 17 prevents the Secretary of State from changing the character of the Royal Mail pension plan as an occupational pension scheme established under trust. The pensions legislation applicable to pension schemes depends on whether the scheme is trust-based. A statutory scheme, such as the local government pension scheme, is not trust-based and has no trustees. Among other things, that would have the effect of stripping away the requirement to have member-nominated trustees. Amendment 59 limits the Secretary of State's power, so that he cannot make such a change. The scheme would have to remain trust-based and not become a statutory scheme or some other type of beast. I do not think that that is controversial. All similar schemes in the rail, coal, electricity, gas and water industries remain trust-based, even when they are sponsored in part by the Government. As matters currently stand, members have rights under a scheme sponsored by a limited company, and Royal Mail is wholly owned by the state. Royal Mail could conceivably go bust, but it is highly improbable. Such things must be taken into consideration and I hope that the Minister sees exactly why I believe that trusts, rules, regulations and governing bodies of pension schemes should be fair, even-handed and transparent. I beg to move.