---

Postal Services Bill [HL]

This has been an interesting debate which has strayed beyond the specifics of the amendment. I shall just say this in relation to the pensions holiday: it was my understanding that the legislation of the previous Government put pension schemes in this position. That may have not been dealt with early enough by a subsequent Government. I was interested in the comment that the position was forced upon the Government by the Inland Revenue. That was an interesting perspective put by the noble Lord. The pensions holiday is a matter of fact. There was a long period during which contributions were not made into the scheme. It is difficult to discern what the subsequent funding arrangements might have been after the 2003 triennial valuation, had there been more funds in the scheme in the interim. However, that is history and we are where we are. The noble Lord, Lord Skelmersdale, talked about longevity. If you look at the pensions landscape, we know that the challenges facing DB schemes generally have been created by issues around longevity and a period of unrealistic expectations from asset prices. The commission of the noble Lord, Lord Turner, made that very clear, but we are where we are. The big challenge regarding the RMPP, whether or not it had been fully funded on day one, is the size of the scheme in relation to the business supporting it. For these arrangements to renew, for the Government to take over accrued rights, to slim down and to fully fund the scheme are very important to sustain opportunities going forward. Let me deal with the detailed amendments. The Government’s intention is for qualifying accrued rights to be transferred from the RMPP to a new public service scheme. Subsection (2) covers the scenario whereby if qualifying accrued rights remain in a section of the RMPP, the Secretary of State is allowed to make provision for the making of payments to the trustees on a pay-as-you-go basis in relation to qualifying accrued rights. As I explained earlier, the existence of this power is purely a contingency measure should, for whatever reason, the Government’s preferred option prove impossible. Creating a new section for qualifying accrued rights would be quicker than creating a separate scheme under Clause 16, and there may be circumstances where this additional flexibility is advantageous. The remainder of Clause 17 relates to the establishment of the new subsection for qualifying accrued rights. That is why those provisions are there. It is not for other sections of the RMPP. For example, subsection (3) allows the Secretary of State to include provision for increasing the benefits payable in respect of qualifying accrued rights in prescribed circumstances. This is similar to the equivalent provision at Clause 16 and is required to match the indexation of benefits currently provided for under the RMPP. Subsection (3)(c) is needed to allow the Government to make payments to the trustees to cover any additional discretionary benefits for members. Discretionary benefits include agreements to grant members enhanced benefits as regards ill health or early retirement. The exercise of discretionary powers by the trustees would require the Secretary of State’s consent under subsection (3)(b). I should stress that these provisions relate only to a new section of the RMPP created for the purpose of containing the qualifying accrued rights and for no other purpose. They do not relate to the other sections of the scheme relating to Royal Mail Group and Post Office Ltd. The ability to create a new section for the qualifying accrued rights is an important contingency measure, but it is not the Government’s preferred option. If the Government are able to transfer the QARs to a new scheme, as envisaged under Clause 16, these provisions will not be required. I hope that that explanation will help noble Lords and will enable the noble Lord, Lord Skelmersdale, to withdraw the amendment.