Clause 27 - Terms of employment

Railways and Transport Safety Bill – in a Public Bill Committee at 4:00 pm on 11th February 2003.

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Question proposed, That the clause stand part of the Bill.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

Clause 27 relates to the terms of employment of constables and other persons employed in the service of the British Transport police. We are told in the Library note that staff terms of employment, including pension benefits, will not be affected by the transfer to the authority. It therefore causes me some concern to learn that the proposals in the Bill could have a significant adverse effect on the pension rights of contributors to the British Transport police superannuation fund.

It is proposed that the Railways Pension Trustee Company will no longer be the trustee. That would affect the current investment arrangement, as the pensioners—the British Transport policemen and women—are part of a pooled fund for investment purposes, and it is not certain whether they could remain with it. If they could not, it would lead to significant increased costs. It is proposed that the Secretary of State's consent be required for changes to the scheme, especially with reference to general police officer pension benefits.

As the Minister said earlier, the British Transport police scheme is a funded scheme, and is therefore totally different from the Home Office scheme, which he elaborated on at some length. Improvements to the scheme have been made in the past without reference to the Home Office scheme. Would that power be curtailed by the Secretary of State? The pension arrangements for administration staff effectively remain unchanged, so why would the Minister and the Government propose such widespread changes to the British Transport police scheme? If they are proposing such changes, it would be helpful to know why such far-reaching changes are intended, given what the Minister said earlier. I want him to explain why the British Transport police will be disadvantaged in this way and why these changes will be made.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

Clause 27 ensures that the British Transport police authority's employment practices fall within the criteria set by the Secretary of State. British Transport police officers will hold the office of constable and also be employees of the authority. In transferring to the British Transport police authority from the Strategic Rail Authority—which is their current employer—British Transport police officers' existing terms and conditions of employment will be protected. I would have thought that that would be a matter of considerable concern not only to British Transport police officers—and to other staff—but to Committee members.

Photo of Don Foster Don Foster Shadow Secretary of State for Transport

Purely for the avoidance of doubt—because I hope that I know the answer to this question—can the Minister confirm that he is referring to future as well as existing members of staff of the British Transport police?

Photo of John Spellar John Spellar Minister of State (Department for Transport)

That is to ensure that the British Transport police authority's employment practices fall within the criteria set by the Secretary of State. I hope that that eliminates the doubt.

The Secretary of State currently retains control of British Transport police pay through the Strategic Rail Authority's financial framework issued under the Transport Act 2000. This clause will enable the Secretary of State to ensure that the authority maintains pay parity for British Transport police constables with their Home Office colleagues.

The question of the change of trustee relates to different legislation. This is all about member-nominated trustees. The police scheme is non-compliant and it must be compliant by 2007. That cannot happen while the trustees have 50 per cent. representation from the police force. Therefore, the question that the hon. Member for Vale of York raises is important but it relates to pensions legislation rather than to this Bill or this clause. I will have to seek information from the Department that is responsible for pensions legislation to clarify the matter for her. As I understand it, this matter is not raised by this legislation; it was already raised under separate pensions legislation.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

We appear to have a breakdown in communication between the Government—the Department—and the British Transport Police Federation. It is clear that it does not feel it has been properly consulted on this.

I do not care which legislation my question relates to. For the purposes of the Bill, we need to know what the terms of employment are going to be. In his reply the Minister was obviously playing for time. The focus must be on the British Transport police—men and women who serve us very well, regardless of whether they are special constables or full-time—although this point is about pension provision for full-time officers.

The Minister has failed to reply to my point. I leave him with the following questions, and if he fails to respond to them in Committee, we will have to revert to this point in detail on Report and the other remaining stages. He is saying one thing and the British Transport Police Federation is saying another. This may be under different legislation but it will impact on clause 27. If the Library, which usually has its finger on the pulse and knows precisely what is going on, informs us that staff terms of employment, including pension benefits, will not be affected by the transfer to the authority but may be affected by other factors, that is noteworthy and a cause of concern. The British Transport Police Federation believes that the proposals outlined by the Minister could have a significant and adverse effect on the pension rights of members of the British Transport police superannuation fund. I presume that that relates to current beneficiaries of the fund; it seems extraordinary that they could be so disadvantaged.

I seek further clarification. If the terms of employment are going to change, the Committee needs to know. If it is proposed that the railway trustees pension company will no longer be trustees, I want to know why. There must be compelling reasons for that. If the company has served the force and the superannuation fund well, the Minister should share those reasons with the Committee. Were that change to take place, we are told that it could impact on current investment arrangements, because British Transport police pension funds are part of a pooled fund for investment purposes and it is not certain that they can remain in that pooled fund. I am told that the change would lead to significantly increased costs. Will the Minister explain why and how he proposed paying them, particularly for those in the superannuation fund? Will the BTP will remain in the fund; and if not, where would it go?

If the consent of the Secretary of State has to be sought for the changes, will the Minister talk the Committee through the circumstances? How will the Secretary of State's consent be sought, and how imminent are the changes? Are they likely to be within the time frame of the Bill's coming into effect? It would help to know what the impact of the Secretary of State's consent would be for general police officer pension benefits.

The British Transport police scheme is funded and is therefore different from the Home Office scheme. Improvements to the scheme have been made in the past without reference to the Home Office scheme. Would it still be possible to improve the British Transport police scheme without reference to the Home Office scheme? The pension arrangements for administration staff remain unchanged, so why should the Minister propose such widespread changes to the British Transport police scheme?

Photo of John Spellar John Spellar Minister of State (Department for Transport) 4:15 pm, 11th February 2003

I hope that I can provide some clarification for the hon. Lady, although I am not sure all of what she said comes under clause 27. Perhaps she is referring to clause 70.

Photo of John Spellar John Spellar Minister of State (Department for Transport)

And the appropriate schedule.

The Secretary of State will be enabled by order to make the necessary amendments to the railway pension trust and to the British Transport Police federation superannuation fund. When making an order, the Secretary of State must consult the trustees of the scheme. Such an order must also receive the approval of both Houses of Parliament. Pension rights for railway staff, enshrined in the Railways Act 1993 and the relevant statutory instruments, will not be affected.

It is intended to amend the railway pension scheme, so that changes to the pension benefits proposed by the authority as employer of the support staff will require the Secretary of State's approval. As a result of the controls in the Government's financial framework, the same applies to BTP constables.

As to the railways pension trustee company, only one out of 16 directors represents the force, but legislation requires one-third representation by 2007. A working group is due to commence on Thursday. It will include representatives of all interested parties, including existing pension scheme trustees, BTP management, the British Transport Police Superintendents Federation, the Strategic Rail Authority and the Government actuaries of the Department. However, I stress that nothing in the provisions will undermine the historic independence of the pension scheme or undermine existing protections of railway staff pension rights. The authority, as employers of BTP officers and support staff, will continue the previous committee's role in participating in staff pension arrangements. The hon. Lady should reflect on why she believes that particular difficulties will arise that will not be covered by the working party that will commence its work on Thursday.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

That is helpful as far as it goes. As the hon. Member for Bath said, we shall have further opportunities to debate the matter in more detail. I want to give the Minister time to return to it in a rather more coherent fashion later.

Clause 27 ordered to stand part of the Bill.