My Lords, the amendment stems from the situation that arose on 31 March 2010 when Jarvis, a rail maintenance company, went into administration. The amendment is not intended to make any new demands but simply to close what I think was an unforeseen loophole in the Railways Act 1993. Schedule 11 to that Act was intended to provide railway workers employed by British Rail at the time of rail privatisation with the right to a protected pension. This amendment is intended to restore that right.
In other instances where rail companies collapsed or gave up contracts, the workforce had always been transferred to other companies, but this did not happen with Jarvis, due to complex reasons related to the application of the transfer of undertakings regulations. Nevertheless, many of the Jarvis workers who had been employed by British Rail at the time of privatisation rightly expected that at least their pensions would be protected by the 1993 Act. It was then discovered that the Act does not cover cases of companies going into administration, which meant that these workers simply lost out. It is estimated that some 650 former Jarvis workers have been affected, and that the cost of meeting the pensions shortfall that would arise from accepting this amendment would be in the region of £400,000. The amendment would also honour the spirit of the Railways Act 1993 and ensure that in the unlikely event that another successor company to British Rail went into administration and the work was not transferred to another company, any affected workers who were also employed by British Rail in 1993 would have their pensions fully protected.
I am seeking to put right something that was not foreseen and which clearly represents an unfairness and an injustice. Jarvis’s former BR employees are not receiving the protection that was promised at the time of privatisation. The major flaw in the protection order is that it is an obligation on the employer, but where the employer disappears it seems that there is no entity to take up that obligation. That is obviously a serious gap in the original privatisation process, and the former BR members employed by Jarvis were misled by the UK Government as a result. They expected to get the pensions to which they were entitled, instead of the much lower one they ultimately received.
I do not think that this amendment was debated in the House of Commons because it was not reached. If it was passed, it would mean that the British Government had honoured an obligation and a promise made at the time of privatisation that employees’ pension rights would be protected so that they were at least
as favourable as the rights they enjoyed under the BR pension scheme. The new clause would provide the protection sought.
However, I understand that there is another option which the Minister may prefer. Under the terms of the Railways Act 1993, the Government could introduce an order to rectify the situation. The Minister therefore has two options. He can either accept the amendment or he can achieve the same end in another way. This is a matter of honour and integrity, and I think it is only right that several hundred workers should not be penalised due to something that was really only an administrative oversight. I beg to move.