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Postal Services Bill [HL]

This has been an interesting, if somewhat compacted, debate. Let me try to unpick one or two issues. My noble friend Lord Clarke raised several points about the communications between the chair of the trustees and what had transpired. Forgive me that I have no briefing on that. I have a copy of the letters. If there is a way in which we can add further clarification, I am happy to take that away. My noble friend Lord Whitty asked for an assurance about the Government’s intentions going forward. He is right to say that there are clear protections for the RMPP members at the point that the scheme is effectively split into two. I will come onto that in a little bit of detail in a moment So far as the new public sector scheme is concerned, the Secretary of State would similarly be constrained by Clause 19(6) in respect of any adverse change to qualifying and accrued rights, and those would be dealt with only under very narrow circumstances, one requiring consent and one being amended in the prescribed manner for which, as we debated last time, we were trying to replicate what is in Section 67 of the 1995 Act. The other principle is that the Government take responsibility for accrued liabilities going forward for the operation of the pension scheme, which is the routine, normal manner of the Royal Mail Group and Post Office Ltd in respect of their action, and that the protections that are currently available generally in pension legislation would continue to apply. The Government have no particular powers in the Bill to seek to amend the scheme, as far as I am aware, and I will certainly write if the contrary proves to be the case. The Secretary of State does not have that power going forward. The operation of the slimmed-down scheme will be a matter for Royal Mail Group, as should be the case. We have made that policy clear from the start. More specifically, the amendment raises a number of issues regarding consultation that we touched on in our discussions on earlier amendments. I appreciate the importance of the issues raised by noble Lords and I hope that my response to these amendments will address any remaining concerns. The first part of the amendment requires the consent of the RMPP trustee to be obtained where an order is made that adversely affects any relevant pension provision contained in the RMPP. In other words, although the general requirement under Clause 24 is that the Secretary of State must consult with the trustee before any order is made under Part 2 which affects the RMPP, the effect of the amendment would be to require the consent of the trustee in circumstances where pension provision within the RMPP was adversely affected as a result of an order being made. I question how, given the existing protections in the Bill—this comes back to my earlier point—the circumstances to which this amendment is addressed would arise. Under Clause 19(2), an order by the Secretary of State to establish a new scheme, transfer qualifying accrued rights to the new scheme, sectionalise the RMPP or amend it cannot be made unless relevant pension provision for RMPP members is, in all material respects, at least as good immediately after the exercise of the power as it was immediately before. As I explained in response to an earlier amendment, the definition of "relevant pensions provision" at Clause 19(3) is broad in its effect. These provisions in Clause 19 are a significant constraint on the powers of the Secretary of State and reflect the importance that the Government attach to protecting members of the RMPP from being detrimentally affected by the Government’s proposals. The clause explicitly rules out the possibility that the Secretary of State would amend the RMPP in a way that had a material adverse effect on relevant pension provision. Accordingly, I cannot see circumstances in which the amendment, if accepted, would serve any purpose. By definition, if there is no possibility of an order being made that had a material adverse effect on relevant pensions provision contained in the RMPP, the trustees would never have to agree to such an order being made. Turning to the final part of the amendment, subsection (1C), I should make it clear that it is indeed important that members of the scheme, both current and former employees, should be made aware of what changes are being made and the effect of the changes particularly in terms of issues such as administration. The Government have already met representatives of current employees and pensioners to explain the proposals in the Bill. The Government intend to keep those organisations informed as the Bill progresses and we move towards implementation. As I mentioned earlier this month, we are also discussing with the trustees and Royal Mail on how they should best engage with current employees and other scheme members as the proposals are developed. While this legislation is progressing through Parliament, it is right that member engagement is the responsibility of the trustees and not the Government. But we are rightly maintaining a close interest and have discussed with the trustees appropriate communications that would meet the needs of the scheme members, stressing the strength of feeling expressed in this House during our earlier debates in Committee. I now turn to the proposed application of the consultation requirements set out in the Occupational and Personal Pension Schemes (Consultation by Employers and Miscellaneous Amendment) Regulations 2006, which are the regulations made pursuant to Section 259 of the Pensions Act 2004, as is envisaged by this amendment. Those regulations require employers with more than 50 employees to consult affected employees about a proposed significant change, known as a listed change, to their pension scheme for at least 60 days before implementing the change. Listed changes include closing the scheme to new members, changing the accrual rate in a defined benefit scheme, changing a defined benefit scheme to a money purchase scheme, reducing employer contributions and increasing member contributions. The requirement to consult gives affected employees the opportunity to have their say about future changes to the pension scheme. It ensures that affected employees are fully aware of the changes and the implications for their future pension provision. The key point is that the Government are not proposing any such changes to the RMPP. Members’ pension entitlements accrued up to the cut-off date—the qualifying time—are not changing as a result of the Government’s proposals. Members’ future accruals in the RMPP will remain, as at present, a matter for the Royal Mail and the trustees. The Government are not proposing any changes. Were Royal Mail or Post Office Ltd to propose changes to the scheme, as employers they would be subject to the obligations under the regulations that I have described. However, no such changes are proposed as a result of the measures set out in the Bill, so the requirements under those provisions are not relevant here. I hope that the explanation has provided some reassurance. I accept that my noble friend may wish to dwell on the precise wording, because it is important that we provide reassurance to people and make clear the protections that are available under these provisions. Accordingly, I hope that he will feel able to withdraw the amendment.