Clause 70 - Consequential, transitional and incidental provision

Railways and Transport Safety Bill – in a Public Bill Committee at 9:45 am on 27th February 2003.

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Amendment made: No. 41, in

clause 70, page 28, leave out lines 45 to 47.—[Mr. Jamieson.]

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

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport) 10:00 am, 27th February 2003

How long will the transitional period be for provisions to be made under the clause? Subsection (3) states:

''Transitional provision . . . may, in particular, make provision in connection with the abolition of the police force comprising constables appointed under section 53 of the British Transport Commission Act 1949''.

Presumably, those provisions are no longer applicable. I thank the Under-Secretary for his note setting out the definitions of the bodies concerned for the purposes of the Bill, which was very helpful in preparing for the Committee stage. Before the Bill goes to the other place, I urge the hon. Gentleman to make a declaration of the relationship between the Strategic Rail Authority and the other bodies.

Subsection (3) states that

''provision may include, in particular, provision—

(b) for the transfer to the Authority of property held (whether by the Strategic Rail Authority or by another person)''.

Could that be Network Rail? Does that apply purely to the old transport police or is it intended to apply in respect of the new framework that the Bill sets up for the British Transport police?

Paragraph 25 of schedule 7 to the Anti-terrorism, Crime and Security Act 2001, which itself amends section 90 of the Police Act 1996, will cease to have effect, although it has been in force for less than two years. Will the Minister explain the impact of the proposal?

We have expressed concern in debates on this part and throughout the proceedings on parts 1 and 2 about the inter-relationship between the various bodies. It would have been opportune to have a schedule, rather than relying on protocols and framework agreements, which are made outside the confines of the Bill. It would have been helpful for all concerned—members of the Committee, the industry and partners and parties involved—if the relationship

between the bodies and the framework agreements had been set out in the Bill.

Photo of John Randall John Randall Opposition Whip (Commons)

I have a couple of questions, but first I want to say that as there has been much legal talk in the debate I am pleased that the simple phrase ''the old transport police'' will be understood by lay people.

Subsection (3) states that the provision ''may'' include certain worthy things—employment to be treated as continuous and so on—and provision for dealing with

''(i) the termination of agreements made in respect of the old transport police;

(ii) the treatment of rights and liabilities''.

I am slightly worried about the word ''may'' in that respect, which might allow some of the rights and liabilities, which include important matters such as employment being treated as continuous and so on, to be negated at a later stage. Presumably, the Minister will assure the Committee that all rights and liabilities under the old transport police shall be transferred to the new body.

Photo of Mr David Jamieson Mr David Jamieson Parliamentary Under-Secretary, Department for Transport

The Bill will place the British Transport police on a proper statutory footing by establishing a police authority to maintain the force. As part of the process, the role of employer of the force will transfer to the authority, which will also undertake the statutory functions currently undertaken by the British Transport police committee and the Strategic Rail Authority in respect of the force.

In reply to the hon. Member for Vale of York, as part of the process it will be necessary to transport the British Transport Police constables, civilian staff and property liabilities to the authority, and clause 70 will allow that process to be undertaken by statutory instrument. It also makes provision for other references on the statute book to the Strategic Rail Authority and the British Transport police committee to be amended by order as a consequence of the Bill, so that in future the reference is to the British Transport police authority.

The consequential powers are to make provision by order to deal with the changes needed to legislation as a consequence of the Bill. Those are set out. The hon. Lady asked how long the transition process would take. It could take up to two years; no definite period has been fixed. It depends on how long the changes take.

The hon. Member for Uxbridge asked about the phrase ''may include''. I anticipate that most of the matters listed would almost certainly be included. For example, clause 70(3)(k) refers to

''the continuity of legal proceedings''.

However, if there were no legal proceedings, such continuity would not be needed. Those matters may be included if that is appropriate.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

That was very interesting. My hon. Friend the Member for Uxbridge also raised, as I did, the reference to ''the old transport police''. I repeat that reassurance is needed that the old transport police

have gone and we are dealing with the new transport police.

The Minister seemed reluctant to rely on the excellent explanatory notes, to which we often refer. These state:

''Clause 70 includes powers under subsections (3)(e) to (g), to make transitional provision to a relevant pension scheme to ensure continuity following the establishment of the Authority, whilst recognising the direct relationship between the new Authority and the Secretary of State. For example, subsection (3)(g) would enable modifications to be made to the procedural or structural arrangements of staff pension schemes (excluding benefit/contribution/funding structures) as a consequence of the new relationship. Subsection (3)(f) would enable existing enactments about pension schemes to have immediate effect, e.g. to apply the provisions of Section 16 of the 1995 Pensions Act covering pension members' rights to select trustees.''

There we have it.

We are told that the proposals in the Bill could have a significant adverse effect on the pension rights of members of the British Transport police superannuation fund, because of the following. It is proposed that the railways pension trustee company will no longer be the trustee. We should like to know why that is the case. In introducing clause 70, the Under-Secretary indicated that it was an innocent little clause that just gave effect to the setting up of the British Transport police force on a statutory basis. Why are the Government doing that at this time? Why are they introducing that change to the pension scheme? That does not seem to enjoy the support of the British Transport police. Does it mean that the British Transport police will or will not remain with that provider of pension schemes? As I have asked, why will the railways pension trustee company no longer be the trustee?

We understand that there will be an impact on the current investment arrangements, which are part of the pooled fund for investment purposes. It is not certain whether the British Transport police could remain with that. I also understand that the proposal would probably lead to significantly increased costs. That raises a second question. First, why make the change at all? Secondly, why make it if it will lead to increased costs?

Clearly, many pension schemes and many superannuated pension contributors are currently in turmoil. We are a special case. It is incumbent on us to show an interest in the plight of others who do not enjoy the privileged position that we in the House enjoy—although we do not necessarily have security of tenure in our positions. I repeat: why will the railways pension trustee company no longer be a trustee, and why will that lead to a significant increase in costs?

Clause 70 proposes that the Secretary of State would need to consent to changes to the scheme with reference to general police officers' pension benefits. The British Transport police scheme is funded and therefore totally different from the Home Office police scheme—I presume that the Under-Secretary is aware of that. Improvements in the scheme have traditionally been made without reference to the Home Office scheme, so why is the decoupling happening and would that be curtailed by the Secretary of State?

Pension arrangements for the administration of staff effectively remain unchanged. I am sure that, like us, the British Transport police want to know why the Government have proposed such widespread changes to the British Transport police scheme. Why has the Under-Secretary not been upfront in sharing that information with us? He said that the purposes of clause 70 are purely innocent, but it would appear to make substantial changes. Even if the British Transport police have been consulted, they do not agree with the changes.

I want to draw the Under-Secretary's attention to schedule 5, which is on page 63. Paragraph 3 says paragraph 25 of schedule 7 to the Anti-terrorism, Crime and Security Act—

Photo of Jimmy Hood Jimmy Hood Chair, European Scrutiny Committee, Chair, European Scrutiny Committee

Order. The hon. Lady is rushing ahead. Will she keep to the stand part debate? We will discuss schedule 5 when we come to it.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I was going ahead of myself. We shall stick to pensions.

Photo of Mr David Jamieson Mr David Jamieson Parliamentary Under-Secretary, Department for Transport

The hon. Lady asked why we did not share the information with the Committee. If she had asked me in her opening remarks to do so, I would have done so.

I understand the concerns that have been expressed about what people see as a detrimental impact on members of both pension schemes by the establishment of the new police authority, and I hope that I can assuage some of those concerns. I stress that the clause will have no major effects on the current arrangements of providing retirement benefits for the relevant police officers and support staff. The arrangements need to recognise the changed relationship between the Department for Transport and the new police authority once the Strategic Rail Authority is no longer the relevant employer. That is precisely the intention of the clause.

The hon. Lady may know that a working group was set up recently. It includes representatives of all the interested parties, and I understand that they are broadly content with the proposals as outlined. A few issues remain to be resolved, including the trustee structure and the investment of assets. However, I emphasise that those issues are not a direct result of setting up the new police authority, but the result of proposed changes to the current pensions legislation as highlighted in the recent pensions Green Paper. The establishment of the new police authority has provided an ideal opportunity for the issues to be considered, and no action will be taken until the working group has discussed all the relevant options.

I want to clarify that the establishment of the new police authority will not cause the British Transport police's budget to be diverted to pension funds. There will be no undue interference by the Secretary of State in the running of the schemes, as his powers in relation to the schemes is limited.

Photo of Mr David Jamieson Mr David Jamieson Parliamentary Under-Secretary, Department for Transport

I want just to finish my point. There are no proposals to change the structure of the existing pension schemes along the lines of the Home Office

schemes. I hope that that has clarified the points raised by the hon. Lady.

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

I have listened with great interest to the debate and did not want to intervene until I heard the Under-Secretary say that there would be no undue interference from the Secretary of State. I want to ask a simple question. Will the Under-Secretary give an absolute assurance that neither the authority nor the Secretary of State will seek through any means, regulation or otherwise, to influence entitlement to benefit under the pensions scheme? That is a straightforward question.

Photo of Mr David Jamieson Mr David Jamieson Parliamentary Under-Secretary, Department for Transport

What many of the clauses do is give the Secretary of State certain powers in certain circumstances. I have made it clear that it is not the Secretary of State's role to interfere in the pension scheme—

Photo of Don Foster Don Foster Shadow Secretary of State for Transport 10:15 am, 27th February 2003

Specifically in relation to benefit entitlement, can the Minister assure me that the Secretary of State will not seek to intervene? Will he have regard to the Government's own consultation document, which clearly stated that that would not happen? I want the Minister to say it again.

Photo of Mr David Jamieson Mr David Jamieson Parliamentary Under-Secretary, Department for Transport

That is, in fact, the case and I hope that my firmer assurance helps the hon. Gentleman.

The hon. Member for Vale of York spoke about the need for change. The existing trustee, the railways pension trustee company, has nothing to do with the setting up of this particular authority. Current pensions legislation dictates that, by 6 April 2007, existing arrangements will cease, so alternatives will have to be made that comply with member nomination of trustees, general pensions legislation and the pensions protection provisions of the Railways Act 1993. However, establishing the police authority provides an opportunity to decide whether the trustee of the scheme should be changed at the same time.

Photo of John Randall John Randall Opposition Whip (Commons)

If I find one thing even more confusing than legal terms, it is pensions. I believe that I understand the reason for the changes, although I am a little suspicious about whether something else might lie behind them. Will the Minister give a categorical assurance that existing members of the pension scheme will experience no detrimental effect on their pensions and that those who come into the new scheme will not experience less advantageous benefits than under the current one? I would be happy to receive such an assurance.

Photo of Mr David Jamieson Mr David Jamieson Parliamentary Under-Secretary, Department for Transport

Historically, two tiers of benefit are available, but I can assure the hon. Gentleman of no detrimental effect on future pensions.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I want to quote from pages 42 and 43 of the excellent Library research paper of 22 January 2003:

''The pension scheme arrangements for the BTP are materially different from those of the Home Office police forces. The BTP scheme is a funded, trust based scheme under which substantial powers vest in independent trustees, whereas the scheme for the main

police forces is an unfunded public service scheme subject to traditional scheme regulation by the Home Office. Due to these differences the consultation document stated that it would not be appropriate for the Authority or the secretary of state to make regulations regarding emerging benefit entitlements under the pension scheme trust deed and rules (e.g. on ill-health retirement where the discretion on awards rests with the scheme's trustees). Different circumstances apply for early severance terms, where any compensation costs fall to the Authority rather than the pension fund. Clause 70 and schedule 5 include powers to make transitional provision to a relevant pension scheme to ensure continuity following the establishment of the Authority.''

I hear what the Minister says—that the Government are simply transferring the employer from the Strategic Rail Authority to the British Transport police authority. In common with my hon. Friend the Member for Uxbridge, I sometimes find pensions confusing and the subject becomes more alarming the closer to pensionable age one becomes.

I am not sure that changing the arrangements under the Bill will be allowed under the Transfer of Undertakings (Protection of Employment) Regulations 1981 and it could have a serious effect on the force's morale. Will the Minister assure us that the scheme will be funded as it was in the past? I did not hear the Minister say whether the changes will lead to a significant increase in costs, or why the Government are so in favour of making them. I do not understand why the railways pension trustee company could not continue to be the trustee. The concern seems to be that there will be an increased cost and a change of trustee to no apparent advantage. We should not make light of that. The figures for the BTP show that not as many retired BTP officers are being paid out of operational funds as—

Photo of John Randall John Randall Opposition Whip (Commons)

Out of which budget will the increased costs to which my hon. Friend refers come, or will they come out of the pension scheme?

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I would love to be able to help my hon. Friend, but I do not have the answer. The total annual budget for the BTP is £130 million. We identified that there will be an increased administration cost of £50,000 a year by increasing the size of the police authority from nine to 13 members, but we look to the Under-Secretary for the answer.

We seek assurance that the BTP scheme is a funded scheme and will continue to be so, and that it will continue to be fundamentally different from the Home Office scheme. I listened carefully to the Under-Secretary's answer to the hon. Member for Bath, but did not hear him give the hon. Gentleman any such assurance.

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

Obviously, it is always helpful for the Under-Secretary to repeat any assurance, but I received a categorical assurance after I pushed him to do so. Perhaps he can reassure me that neither the authority nor the Secretary of State will interfere in the benefit entitlement to those who should benefit from the pension scheme. If the hon. Lady wants to hear that assurance again, so be it.

Photo of Anne McIntosh Anne McIntosh Shadow Minister (Transport)

I am happy to read the record, and hope that it will speak for itself.

I hope that the Under-Secretary will put our minds at rest that the fundamental differences between the BTP scheme and the Home Office scheme will continue. If there are to be significant increased costs, will the Under-Secretary tell us, in answer to a question asked by my hon. Friend the Member for Uxbridge, out of which budget they will be paid? Will he also explain why there is an attempt to remove the railways pension trustee company as trustee?

Photo of Mr David Jamieson Mr David Jamieson Parliamentary Under-Secretary, Department for Transport

I thought that I had made it clear why there will have to be a change. It is because of the new pension arrangements that will come into effect in 2007. All that the provisions do is ensure that there is the ability to make those changes at the appropriate time.

The hon. Lady asked about TUPE. TUPE does not cover occupational pensions, and there are no issues relating to it in the Bill. She also asked whether the scheme would continue to be funded as before. It will. There is no intention to change the BTP scheme to the Home Office scheme under the provisions.

The hon. Member for Bath asked in a roundabout way about the Secretary of State's ability to interfere. [Interruption.] He is saying that he is satisfied, but I can again give an assurance that the Secretary of State will not interfere in the benefits. I hope that that dispels all doubt about the matter.

The hon. Lady talked about increased costs. If there are any increased costs, those might relate to changes in investment of the assets of the fund. However, as I said earlier, the investment issues are currently under discussion. Again, for the avoidance of doubt, because the hon. Lady mentioned the issue several times, I confirm that the difference will remain between the Home Office scheme and the British Transport police scheme.

Question put and agreed to.

Clause 70, as amended, ordered to stand part of the Bill.