The final item of business today is the members' business debate on motion S1M-1096, in the name of Dennis Canavan, on Scottish Bus Group and transport operatives pension schemes. The debate will be concluded, without any question being put, after 30 minutes.

Motion debated,

That the Parliament notes that both the Scottish Bus Group pensions scheme and the Transport Operatives pension scheme have still to be wound up some seven years after privatisation; further notes that the schemes have a surplus of around £129 million and that some 8,000 pensioners and 4,000 deferred pensioners are awaiting payment from this surplus, and calls for urgent action to be taken in order to secure the maximum possible benefit for the pensioners and deferred pensioners from that surplus.

I thank the Parliamentary Bureau for giving me the opportunity to initiate this debate. I also express my thanks to the 96 members of the Scottish Parliament, from all parties, who have signed my motion, especially Sylvia Jackson, the principal co-signatory, who has put a lot of hard work into this issue on behalf of her constituents and others who are affected. I welcome some of the pensioners involved, who are in the public gallery this afternoon.

It is 11 years since the Westminster Parliament passed the Transport (Scotland) Act 1989, which provided for the privatisation of the Scottish Transport Group. On 8 December 1993, it was revealed to the Public Accounts Committee of the House of Commons that there was a surplus of more than £100 million in the Scottish Transport Group employees pension funds. I pay tribute to the Public Accounts Committee, especially my good friend Alan Williams MP, who dragged the information out of senior civil servants under cross-examination.

The current surplus appears to be about £129 million. It is not surprising that members of the pension funds feel that they should benefit from that surplus. A total of about 12,000 people are involved, which includes 8,000 pensioners and 4,000 deferred pensioners. They include former bus drivers, conductors, engineers, cleaners, ferry crew and office staff. Some of them invested their entire working lives in public transport. Most of them live off very modest pensions.

A similar case south of the border involved former employees of the National Bus Company.

There was a surplus of £356 million in their pension fund. It took years of expensive legal action before John Prescott, the Secretary of State for the Environment, Transport and the Regions, eventually agreed that it should be used for the benefit of the pensioners. Ensuring a fair deal for Scottish Transport Group pensioners should not require expensive and prolonged legal action. The Scottish Executive should act now.

I wrote to Sarah Boyack, the Minister for Transport and the Environment, more than a year ago to ask for appropriate action. I was eventually informed by her office that the matter was under consideration by the UK Treasury. I therefore wrote to Gordon Brown, the chancellor, only to be told that the matter is the responsibility of the Scottish Executive. The responsibility of the pension fund trustees in winding up this scheme has also been mentioned.

The Pensions Advisory Service recently advised one of my constituents that the trustees might have exceeded their powers when they used part of the surplus to enhance the benefits of only one class of member. That is a serious allegation, which I would like the minister to investigate and comment on.

On 27 July 2000, I wrote to Mr Archie Douglas, secretary to the trustees, to ask for a copy of the trust deed and the rules relating to each of the pension schemes. I thought that that was a simple request. I received a reply from Shepherd and Wedderburn, solicitors acting for the trustees, saying that I should direct my inquiries to the Scottish Executive. I wrote to the Minister for Transport and the Environment on 22 August and asked her to forward me a copy of the trust deed and rules. That was more than nine weeks ago. At last, one hour before today's debate was due to start, a messenger magically appeared at my office with a letter from the minister, saying that providing the trust deed and rules was not a matter for the Scottish Executive, but was the responsibility of the trustees or the solicitors acting on their behalf. In more than 26 years as a parliamentarian, I have never before experienced such dithering, buck-passing and obfuscation. Is it any wonder that some of the pensioners question whether they will live long enough to see any benefit from their pension fund surplus?

The Treasury told me that the matter was the Scottish Executive's responsibility. Therefore, I fail to see why the Executive should have to wait for Treasury permission to act. Executive action is needed, and needed now. On 6 July, in answers to parliamentary questions from Sylvia Jackson and me, Sarah Boyack said:

"We hope to bring to the Parliament in the autumn an order that will achieve the wind-up" of the Scottish Transport Group.

"We are in discussion with the trustees and the Treasury to move matters forward."—[Official Report, 6 July 2000; Vol 7, c 1222.]

We are into autumn now, and it will soon be winter. I hope therefore that the minister will give a positive response when she replies to the debate. The Scottish Transport Group pensioners, many of whom have travelled long distances to listen to today's debate, are looking to the Scottish Parliament for justice and to the Scottish Executive to deliver. The Scottish Transport Group pensioners have waited far too long already and I urge the minister to ensure that they receive a fairer deal.

I too welcome the retired employees of the Scottish Bus Group who are with us in the Scottish Parliament today. They represent many parts of Scotland: Stirling, Falkirk, Grangemouth, Kilsyth, Kirkintilloch, North Lanarkshire and Inverness, to name a few. I welcome also officials of the Transport and General Workers Union, with whom the MSPs who are members of the TGWU have been working closely on this issue.

Like Dennis Canavan, I first became aware of the surplus moneys in the transport operatives pension scheme last year. However, I was approached by two constituents, one of whom, Chick Hulston, has, with a few others, been at the forefront of the whole campaign.

The first meeting of the retired employees of the SBG took place in Stirling, in the Braehead project hall. From there, the numbers at subsequent meetings in Falkirk have grown and grown. As well as me, MSPs Dennis Canavan and Cathy Peattie have regularly attended those meetings. Dennis and I have lodged parliamentary questions on the issue. As Dennis said, the reply to one of them was that the minister hoped to have the dissolution order brought to Parliament this autumn. I re-emphasise Dennis's words, that autumn will soon be winter. None of the pensioners is getting any younger.

The crux of the issue is that retired employees who belong to the Scottish Bus Group pension schemes, of which TOPS is just one, should have the same rights as colleagues in England and Wales who are members of the National Bus Group pension funds. Should not members of the Scottish Bus Group pension schemes have the same moral rights as their colleagues in England and Wales to the surplus funds in their pension schemes?

Working with the TGWU, the MSPs involved have also become acutely aware of the difficulty that Dennis Canavan documented in receiving certain information from the board of trustees, which is led by Archie Douglas. They have been trying to get answers to questions about the current surplus and whether trustees have been drawing payments of expenses from the TOPS surplus. That was the main part of my recent parliamentary question on this issue, to which I hope to receive an answer very soon.

We should be constructive in developing a way forward; indeed, the TGWU has suggested such an approach by urging the board of trustees to meet union representatives urgently to discuss the issues further. Like Dennis Canavan, I eagerly await the minister's response and hope that the pensioners here today—some of whom have travelled from very distant parts of Scotland—will receive some positive news at long last and that the surplus money in the TOPS will be passed on to them.

Lord James Douglas-Hamilton has indicated that Annabel Goldie should go first. I concur with that.

Presiding Officer, I extend my thanks to two gentlemen in this chamber. Indeed, I include a third gentleman in my thanks—Mr Dennis Canavan. I welcome this debate and we are all grateful to him for providing us with this opportunity to comment on what by any consideration is a highly unsatisfactory state of affairs.

It seems extraordinary that, seven years down the road from the privatisation of the Scottish Bus Group, both actual and deferred pensioners are being denied very necessary benefit. It is clear that the situation is down to bureaucratic constipation. However, if there has been a stoppage of the bowel in Edinburgh, there has also been a stoppage of the bowel in Westminster, because it is perfectly clear from the Transport (Scotland) Act 1989 that the Secretary of State for Scotland has the power to make provisions in the absence of administration being determined by the pension fund administrators.

I have a very brief suggestion. It is absolutely unacceptable that the pensioners should be subjected to any further delay. They are looking for money in some form. Heaven knows, they should surely have received that money long before now. Is there any reason why there cannot be an interim distribution of the pension fund and the surplus? Surely to goodness the Scottish Executive and the pension fund administrators can between them knock heads together and agree some form of interim arrangement to benefit pensioners. At their stage in life, seven years is no doubt a very long time; with all the financial needs and challenges that confront them nowadays, they would welcome any immediate and swift attempt to alleviate the current difficulties.

Quite simply, this delay cannot continue. It is incomprehensible to everyone in this chamber and intolerable for the pensioners. It behoves the minister to take whatever action she can in conjunction with—or, if necessary, in isolation from—the pension administrators to unlock this impasse and, preferably before Christmas, bring a little cheer to the people who have had the courage to come to the Parliament.

I congratulate Dennis Canavan on securing this debate. I became involved in the matter on behalf of Mr Alex Munro, one of my constituents, who for 36 years was a bus driver with Highland Omnibuses Ltd, a subsidiary of the Scottish Bus Group. He and his wife are now pensioners and are waiting for an outcome to this long-delayed matter.

The delay has lasted 10 years, since the Scottish Bus Group was privatised. In 1993, a Mr Brian Wilson, who was then in opposition, pointed out that the delay was unacceptable and said that the Public Accounts Committee had started to reveal the rottenness of the affair. He condemned the secrecy that marked the approach of the then Conservative Government.

If the people of Scotland expected one thing from devolution, it was that we could deliver more efficient government. My experience of devolution so far is that that is simply not happening. Because it is not happening, all of us are lessened. This affair must be brought to a conclusion and the minister must reveal in her response why nothing has been done by her department to resolve the matter, given that she has had well over a year so to do.

Specific questions must be answered. Has the Executive identified the total number of potential beneficiaries? Is it 12,000? If it has done that, why has it not made a partial distribution, which could be an average payment of just over £10,000? How many people who were beneficiaries have died before they could receive payments from the scheme? What message has the minister given, or will she convey, to the families of those who have died before the matter has been resolved?

It is completely inadequate for a minister to come to the chamber and give us no explanation whatsoever of what has been happening. The revelation that Mr Canavan received a reply to his letter shortly before this debate began speaks volumes for everything that is wrong with the Lib-Lab Administration. Its approach to open government is quite deplorable and utterly appalling, and it must change. [Applause.]

What the minister is hearing today is a plea from every section of the Scottish Parliament that she should play a part in righting a grievous injustice. However, it is important to put that injustice into its proper context.

Annabel Goldie said that the situation is highly unsatisfactory. That is a huge understatement if ever there was one. Let us remember how this debate started. The 10 companies collectively known as the Scottish Bus Group were sold cheaply, allowing the buyers to make tenfold profits within a year. The decision to sell off those companies was made by a Conservative Government and was not criticised by anyone in Annabel Goldie's party at that time.

It would be appropriate to point out that careful consideration was given to the pension aspects of the privatisation process. My colleague, Lord James Douglas-Hamilton, stated that "the principal conditions in each sale relate to property clawbacks, employee pensions"—[Official Report, House of Commons, 2 December 1991; Vol 200, c 45W.], and various other ancillary matters. He also said that it would

"be for the privatised companies in due course to establish pensions arrangements for their employees."—[Official Report, House of Commons, 20 February 1989; Vol 147, c 725.]

I do not think that it is helpful to look at such a long intervening gap and say that the fault lies entirely with the Conservative Government, simply because the Conservatives were in office when privatisation took place.

I did not say that the fault lay solely with the Conservatives; I asked for the argument to be put into a proper historical perspective. Twenty-seven former SBG executives were granted a total of almost £700,000 in tax-free payments to compensate for the loss of their private health insurance perks.

It is an absolute disgrace that the Conservative Government of the time helped a handful of people—not just in the bus industry, but in a range of privatised industries—to make huge amounts of money. It is an absolute disgrace that there are pensioners who are today pleading for what is rightfully theirs. One of the things that was often said over the years was, "Look after yourself." The Conservative Government told us to take individual responsibility. These pensioners did that. They contributed to a fund. All they are asking for now is to get back what is rightfully theirs. [Applause.]

Order. I remind people in the public gallery that our standing orders do not provide for applause. I may overlook that at the end of speeches, but not during a member's contribution to the debate. Please continue, Mr Henry.

It is to the credit of all those involved that they have persisted for so long in the face of so many obstacles. If one fact emerges from today's debate it must be that the obstacles are not insurmountable. The delay is intolerable and something must give.

I ask the minister to consider a number of things when she examines this matter, which I hope she will do urgently. The union and individual pensioners have asked for a meeting with the trustees. The trustees cannot be allowed to ignore those requests. People should be given that meeting as a priority and I ask the minister to intervene to ensure that that happens. I also ask the minister to make it clear to the trustees that the surplus should not be used to cover legal or trustee costs. I ask the minister to make it clear that, if the surplus is passed to the Government, it will be passed to TOPS pensioners and deferred pensioners in increased or additional benefits.

There is a fundamental point of principle: the money belongs to the pensioners and it is time to do something about that.

I will be brief. I regret the fact that a wee bit of political blame culture has come into this debate, because I think that members from all parties want justice for the pensioners. It is not edifying for the pensioners to see us turning this debate into a squabble.

We want to know what action has been taken in relation to the winding up and the time scale to which we are working. We want to know about the arrangements for distributing the surplus to pensioners and, if there is to be an initial pay-out, details of which groups will be prioritised. We also need clarification of who within the scheme will qualify.

A constituent of mine who worked for one of the bus groups was advised to transfer his pension to a private pension scheme. He was advised to do that because the pension was going to be wound up, so he had no real alternative. Shepherd and Wedderburn now says that he has no further entitlement, but he believes that if he paid into the scheme he should be considered for any residue that is to be disbursed. However, he does not know what his situation is.

We need to know who is eligible and, as Hugh Henry said, we need assurances that the surplus will be distributed in full to the pensioners and not to the employers, whoever—legally—that may turn out to be.

I rise to support Mr Dennis Canavan on this issue. We were both on the committee that considered the subject about 11 years ago. It is quite astonishing that we should have to debate the issue at all.

I recall that in 1993 I made a commitment. As Annabel Goldie said, there are reserved powers in the Transport (Scotland) Act 1989 to make pensions orders if satisfactory pension arrangements are not provided by any of the privatised companies. Section 12(1) of the act states:

"The Secretary of State may make such orders under section 74 of the 1962 Act (power to make provision about pensions in the nationalised transport industry) in relation to related companies as he could make if those companies were subsidiaries of the Group".

It is my understanding that those powers were transferred to the Scottish Administration under the devolution legislation. As I said, that act was passed many years ago. The Administration should intervene in strong support of the motion.

Will the member take an intervention?

I will give way shortly.

Whatever the complexities of the matter, it has been delayed far too long. I urge the Executive to make strong representations to both the trustees and the Treasury. If Treasury officials are holding the matter up in any respect, that should be taken up vigorously with Gordon Brown.

Will the member give me some clarification? Is it not the case that, in 1996, the Tory Government introduced a statutory instrument which enabled the trustees to pay any surplus to the Secretary of State for Scotland? Does the member agree that this is a moral question? The money belongs to the pensioners who paid into the pension fund. The trustees have a responsibility to ensure that the money goes directly to the pensioners and not back to the Government. Does the member agree that it has taken time to get things right, but that we should now give the minister the opportunity to ensure that the pensioners get their money?

As a matter of principle, every pensioner should get his or her entitlement. We hope that the minister will assure us on that point. I had expected this scheme to be wound up a considerable number of years ago. It is extremely annoying, and very disturbing, that the matter has not been brought to a conclusion. I hope that the minister will act as a catalyst to bang heads together to ensure that there is no more buck-passing, that there is no further impasse and that this matter is resolved speedily and without delay.

On a point of order. I do not have a personal reason for this point of order, because I have not requested to speak in the debate. However, many members care passionately about this issue, and the gallery is populated with people who have come from all over Scotland at considerable expense and bother. Could you possibly extend the debate until almost 6 o'clock?

Members know that I am always anxious to help the chamber in such cases. I have looked at the possibility of a 10-minute extension but, regrettably, for logistical reasons that is not possible on this occasion.

We are calling for two things in this debate. First, we are calling for an immediate resolution to the problem of the STG pension fund. Secondly, a call should go out to the House of Commons for a major change in pensions legislation, because it is becoming a national scandal. Whether it is private companies putting the surpluses in their pension funds back into the companies themselves to ensure bigger profits or the public sector or former public sector organisations using their pension surpluses to top up the funds of the Treasury, in either case it is morally wrong. It is also a financial scandal for pensioners.

Let us go back to first principles. Who built up the fund? Who contributed to the fund? It was the pensioners themselves—the people who were working for the Scottish Transport Group and the Scottish Bus Group—as well as their employer. The employer puts money in on behalf of the employee: employers and trustees have no moral right to take it upon themselves to refuse to distribute the surplus to the people it was intended to benefit.

As Fergus Ewing said, if the surplus was used to give a cheque to each of the 12,000 pensioners, each would receive about £10,000. Even if that money were invested and pensioners received only the interest, they would receive an increase in their pension of around £15 a week. To an average pensioner in Scotland, that is a substantial increase by any standards.

As long as this situation continues, we are cheating pensioners out of their entitlement and we are standing by as their standard of living is reduced well below what it could and should be. The pensioners are getting older—some have already died during the past seven to 10 years. Tonight, I hope that we will get answers from the minister, instead of further delays. I hope that we will get a commitment to some degree of backdating for those who have been cheated out of their entitlement.

My final message to the minister is this: if the Treasury says that this matter is its responsibility, and the minister says that it is her responsibility, and the Treasury refuses to do anything, let the minister stand up for the pensioners and tell the Treasury to get stuffed. It is more important that our pensioners get their entitlement than that we play footsie with the UK Treasury in London.

I apologise—for the reasons that I gave earlier—to the three members who were not called.

I would like to add my congratulations to those given to Dennis Canavan on securing this debate. I also congratulate him on the determined manner in which he has pursued this matter over recent months. He may not expect that sort of comment from a minister; but from my mailbag, and from discussions with many members in the chamber who have been representing their constituents, I know how important it is that we resolve these matters. Compared with the usual, the attendance today is very good for a debate at the end of the day's business. In addition, SBG members and their representatives are in the gallery. There is huge interest in this issue.

Let me start by making it absolutely clear, as Dennis Canavan and Sylvia Jackson asked me to, that I think there are important issues of equity in this particular case. Scottish pensioners have contributed to the fund throughout their working lives and I can well understand why they have expressed a claim on the moneys.

Members across the Parliament have alluded to the fact that the administration of the fund is a complex matter, particularly post-devolution. It might help members if I provide some background and add some clarity to the points raised when we discussed the issues previously. We have pursued the matter during the summer and I would like to report on our progress.

The Scottish Transport Group, which is now owned by Scottish ministers, was established in 1969 and brought together the interests of 10 bus companies in Scotland and the ferry interests of Caledonian MacBrayne. In 1988, the then Conservative Government announced its intention to privatise the bus companies that were owned by the STG. The companies were sold off and the trustees of the two pension schemes—the transport operatives pension scheme and the staff pension fund—made arrangements to secure the existing benefits for scheme members whose bus companies were taken over. Some 12,000 scheme members stayed with those schemes, while a further 2,000 opted to transfer their entitlements, in most cases to pension schemes with new employers.

Following the privatisation of the bus companies, the only substantial business remaining is the wind-up of the pension funds. It is fair to say that the STG pension scheme trustees have been very keen to resolve the matter for some time. I share the views of the trustees and the members that the matter should have been addressed a long time ago—the scheme should and could have been wound up in 1995 by the Conservative Government. Perversely, it is only because there has been such a long delay that management of the funds in the interim has provided a surplus that we must now deal with. As nothing was done, devolution and the transfer of responsibilities over what was and is unfinished business has made the legalities even more complicated. We should not forget—as Lord James Douglas-Hamilton mentioned—the inherited terms of the Transport (Scotland) Act 1989. The act makes it clear that the proceeds from dissolution of the Scottish Transport Group should be paid to the UK Exchequer.

Several members have commented that the matter is further complicated by the fact that different outcomes have emerged north and south of the border. The initial STG settlement in Scotland was regarded, at the time, as a good one. Members approved the settlement at meetings in 1989, after the STG took the necessary steps to ensure that members were able to vote on the proposed changes. The meetings and proposal were advertised widely and explained fully; trade union representatives were involved. In England, that did not happen. Accordingly, members of the equivalent English schemes were able to argue that their trustees had not acted properly and that was upheld by the pensions ombudsman. In settlement of the potential litigation in England, the Deputy Prime Minister agreed with the trustees, through the High Court, that a payment should be made to the beneficiaries.

The Scottish schemes were settled properly and there has been no similar threat of court action in Scotland. However, that does not mean that we cannot act. I have already mentioned the requirements set out by the Transport (Scotland) Act 1989, overseen by the then Conservative Government. Under that act, the proceeds arising from the dissolution of the STG, including the pension schemes, should be paid to the Exchequer. When drawing up the Scotland Act 1998, the new Labour Government recognised the importance of the matter and ensured that any such receipts may be taken into account in terms of settling the Scottish Executive's budget.

There are restrictions on the Parliament and on ministers' powers to make provisions in relation to the pensions. However, the Scottish Parliament has the competence to authorise ministers to make ex gratia payments where appropriate. As the Scottish Minister for Transport and the Environment, I am concerned to ensure that Scottish pensioners are not left significantly worse off as a result of the fact that they and the trustees of the Scottish schemes have at all times acted properly in respect of the STG schemes. Accordingly, I believe that in those exceptional circumstances, ex gratia payments are appropriate. I hope to come to Parliament this autumn to seek members' permission to make such payments. At that point, we will be able to answer some of the detailed questions and points that members have raised. I hope that I can count on members' support when I do that.

The winding-up of the schemes has commenced and we have been working on that over the summer—that process will be concluded as soon as possible. The late First Minister was as concerned as I am to ensure that Scottish pensioners do not lose out. In the last days of his life he was in discussion again with the Treasury about the details of the settlement for STG pension members. Tragically, he was unable to finish that work. However, Jack McConnell and I expect to conclude those negotiations soon. Ultimately, I hope that a substantial sum will be distributed.

Meeting closed at 17:40.