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Postal Services Bill [HL]

Although my name is not on the amendment, the name of my noble friend Lady Turner is and, in supporting the amendment, I take the opportunity to tell the Committee that I spoke to her last night. She has had major surgery on her knee but she is in very good spirits and hopes to be back among us as soon as possible. In the mean time, she sends her best wishes to all her friends. It was nice to speak to her last night because her heart and mind are on the Bill, to which she is so committed. As my noble friend said, the clause deals with the assets of the RMPP that will be transferred to the state in return for the state’s agreement to underwrite the past-service deficit. In other words, it is about the money, not the pension rights. The assets will consist of cash, government bonds, gilts and equities. The gilts and equities could be sold by the RMPP and transferred as cash, but that would suit no one as they might be sold into a falling market. The Government’s intention, as outlined in the debate on 31 March at col. 1023 of Hansard, is that gilts will go to the Treasury, cash to the Consolidated Fund, and other assets to a freestanding fund which would gradually sell them when the market was right. The effect of the amendment would be that all the assets were transferred to the freestanding holding fund. In other words, the gilts and cash would not be simply swallowed up by the Government. The purpose of the amendment is that there should continue to be a fund available to underwrite the transferred pension rights. It would exist as a kind of trust fund, albeit managed by the Secretary of State’s nominees rather than by trustees. It would give additional security for benefits that might still be in payment 80 or 90 years from now. If the benefits are paid on a pay-as-you-go basis, they are only as secure as the political willingness of Governments over that period to leave them intact. In similar past cases, including rail and coal, the assets were left as a trust fund and not transferred to the Government’s coffers. The Minister should remember that these assets are, in part, funded by the contributions paid by members over a number of decades; it is their money that we are talking about and not some mythical money that has been spirited out of the Treasury. I do not know what my noble friend Lord Hoyle intends to do, but I see this as a probing amendment and I ask the Secretary of State to give a formal, on-the-record guarantee that the transferred pension rights will be paid, come what may, if they are not underwritten by a fund.