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Postal Services Bill [HL]

My Lords, I shall speak also to the other government amendments in this group. The Government are proposing these amendments in response to questions raised in Committee regarding the scope of the powers provided at Clause 17. In explaining the purpose and effect of Amendment 36, perhaps I may start by recapping the Government’s policy intention behind the powers in this clause. Clause 17, particularly subsection (1), allows the Secretary of State, by order, to divide the existing Royal Mail pension plan into different sections. It allows for different participating employers to be in the different sections, and for assets and liabilities in the RMPP to be divided between the different sections. This power is required because the Government intend that the strategic partnership will not include Post Office Ltd, which will remain 100 per cent in public ownership. As a result of the associated restructuring of Royal Mail Group, the Royal Mail pension plan will need to be divided so that there is a section for Post Office employees and another for Royal Mail Group employees. These sections will contain rights built up after the cut-off date for the transfer of liabilities to the Government. Post Office Ltd and Royal Mail Group will each be responsible for its own section. In addition, however, Clause 17 provides the Government with a power to create further sections separate from the sections containing the ongoing pension liabilities of Post Office Ltd and Royal Mail Group. This power could, in the context of a partnership agreement for Royal Mail, be used to create a section that contained qualifying accrued rights, defined in Clause 15. A section created for this purpose would operate on a similar basis to the public service scheme created under Clause 16 and would not hold any assets. Benefits would be funded directly by the Government as they fell due, as provided for in subsection (2). As explained in Committee, the existence of this power is purely a contingency measure should, for whatever reason, the Government’s preferred option—that is, the transfer of the qualifying accrued rights to a new public service scheme under Clause 16—prove impossible. Creating a new section for qualifying accrued rights would be quicker than creating a separate scheme under Clause 16, and there might be circumstances where this additional flexibility was advantageous. In the debate in Committee, I sought to explain that the powers in subsections (2) to (5) of Clause 17 were intended to relate only to the establishment of the new subsection for qualifying accrued rights. The amendment that the Government now propose concerns the use of the powers contained in Clause 17 in the scenario that I have just described. The proposed new Section (1A) makes it clear that the creation of a section to contain the qualifying accrued rights—a, ""qualifying section of the RMPP"—" is limited to circumstances in which there has been no prior order to create a new scheme under Clause 16. The amendment also addresses the concern expressed in our earlier debate that, putting aside the Government’s policy intention, the detailed provisions in Clause 17 could in principle provide the Secretary of State with powers to intervene in matters that were legitimately the concern of the trustees, including the new sections of the Royal Mail pension plan relating to Post Office Ltd and Royal Mail Group employees. By making it clear that the relevant powers can be exercised only, ""in respect of a qualifying section of the RMPP"," the amendment specifically excludes that possibility. I hope that that explanation is helpful in setting out the purpose of the amendment, and I commend it to the House. I beg to move.