BR pension takeover abandoned
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Your support makes all the difference.JOHN MacGREGOR, Secretary of State for Transport, avoided confrontation over British Rail's pension fund yesterday by dropping proposals for the Government to take over part of the fund in the run-up to privatisation, writes Christian Wolmar.
Mr MacGregor announced a joint rail industry pension scheme and said that the 130,000 existing staff would retain a right to remain in the scheme for as long as they are employed in the industry. After a transitional period, a 'closed' scheme for BR's 210,000 pensioners will be created; until then they will remain in the same scheme as existing staff.
In a consultation paper published last January, the Government proposed to take responsibility for paying index-linked benefits to pensioners, in return for obtaining half the fund's estimated pounds 8.5bn assets. Mr MacGregor claimed this would give pensioners a firm guarantee.
However, the pension fund has performed particularly well recently and pensioners lobbied the Government to keep the existing arrangements. Yesterday, Mr MacGregor bowed to all their demands. At a news conference, he said that no decision could be taken until the Government had received responses to its consultation document: 'I was astonished to hear that I was about to announce a U- turn. I can't do a U-turn on a decision I had not taken.'
Brian Wilson, Labour's transport spokesman, said: 'They appear to have backed down but only time will tell whether this is a strategic retreat or a surrender. This is an enabling Bill which lets them do anything.'
Freight privatisation, page 29
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