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Postal Services Bill [HL]

First, I declare my interest. I do not want to repeat it because it is on the record, but I was a Post Office worker and have had other contacts with the Post Office. I also apologise to the Committee for my voice. Until about three o'clock this morning, I did not think that I would be able to speak at all, but some of you may be pleased about that. My amendment 70 would follow Clause 19 and is headed, "Protection for certain members and prospective members of RMPP". As I shall say later, the protection for members of the Royal Mail pension plan contained in the new clause has antecedents arising from the privatisation of other formerly state-owned industries. The new clause would spell out in unambiguous terms what the protection would be. It would not be an interpretation at a later date but a clear and meaningful addition that I believe is necessary. As I said earlier, the proposal has antecedents. When the electricity supply industry and the railway industry were privatised, a new sectionalised scheme was created. There was the electricity supply pension scheme in the first case and the railways pension scheme in the second. Employees of the new private companies could lose all their future service rights under the newly created industry-wide scheme if the employer took the simple expedient of opting out of the scheme. The employer would have to pay off the deficit but, subject to that, could offer whatever future service provision it thought it could get away with. In the case of the Royal Mail pension plan, the problem is heightened. The basic idea behind the Government’s proposal is to create a new sectionalised scheme that has no deficit, or a vastly reduced deficit. In that situation, the new companies would be mad not to walk away from RMPP as soon as they could. My new clause empowers the Secretary of State to make "protected persons" regulations similar to those applying in the electricity supply and railways protected persons regulations. The wording is substantially derived from the electricity supply regulations. New paragraph (a)(i) states that no member can be placed in a worse position if his or her employer winds up their section of the RMPP, or if the RMPP winds up in its entirety. That means that the employer would have to create a new mirror-image scheme. New paragraph (a)(ii) states that the scheme cannot be worsened by amendments cutting benefits or increasing contributions. Otherwise, the employer could achieve the same basic purpose of walking away from the scheme by cutting benefits to a minimum level. Proposed new paragraph (b) deals with the situation in which a member moves from one Royal Mail or Post Office company that participates in the scheme to another company. In that event, if the member’s continuity of employment is not broken, the member retains the right to participate in the RMPP. Proposed new paragraph (b)(i) would require continuity of employment, so if a member left the industry and then returned, their protected person status would be lost. Proposed new sub-paragraph (ii) would require both companies already to be participants in the RMPP. Proposed new paragraph (c) deals with the situation in which an employee transfers from one company that participates in the RMPP to another related company that does not. Typically, that situation will arise when an employer creates a new subsidiary and transfers employees to it. The new company could open a new section of the RMPP, in which case proposed new paragraph (b) would apply. If it did not, under proposed new paragraph (c) the new company would have to make alternative pension arrangements that were at least as favourable. The proposed new clause would be an important protection for members. Without it, the very first thing that will happen if the Government assume responsibility for the deficit is that the new employers will opt out of the RMPP for future service. They will be free from the deficit, which is what prevents them from closing the scheme now. If they did so, they would have to pay for it. That is the imperative. I beg to move.