British Airways (Pensions Uprating)

Cheryl Gillan Excerpts

Monday 14th September 2015 Commons Chamber

[Kate Green (Stretford and Urmston) (Lab)]

Thank you, Mr Speaker. I am grateful for the opportunity to raise this issue, which affects a substantial number of British Airways pensioners. There are two matters. One, regarding discretionary payments, is sub judice. The other arises in relation to British Airways pensions. Obviously, I shall not be discussing the matter that is before the courts. The focus of this debate is the decision by the trustees of BA’s pension schemes to increase pensions by the consumer prices index rather than the retail prices index, as had been the case previously, following the emergency Budget in summer of 2010 which switched the increase in state benefits from RPI to CPI.

The change affects approximately 95,000 pensioners across two schemes: the airways pension scheme and the new airways pension scheme. I am grateful to Association of British Airways Pensioners and its representative, Captain Mike Post, to my constituent, Mr Len Jones, and to Nikki Jones of Unite—in which connection I draw the House’s attention to my entry in the Register of Members’ Financial Interests—for the briefing for this debate. I am sorry not to have had the benefit of any contact from British Airways.

[Mrs Cheryl Gillan (Chesham and Amersham) (Con)]

I congratulate the hon. Lady on obtaining this Adjournment debate. She may be interested to know that several of my constituents are affected by these developments, and I hope that she will address the issue I have been contacted about: the inequity of the position in which they find themselves because of BA’s behaviour. Once again, I hope she will reflect that and that we will hear from the Minister in a positive way.

[Kate Green]

I am grateful to the right hon. Lady for her intervention and I hope to do justice to the concerns of her constituents, my constituents and indeed, as is very evident from the turnout for this debate, those of right hon. and hon. Members from right across the House. I had intended to mention a number of the hon. Members who have approached me about this evening’s debate, but I can see that so many are interested and so I will curtail that part of my speech.

As I have indicated, on 31 March 2014 there were 95,486 pensioners in two separate BA pension schemes—28,144 in APS and 67,342 in NAPS. The matter before us tonight therefore affects a substantial number of people, some on very modest pensions—the average pension in APS is about £14,000 per annum and in NAPS it is about £12,000 per annum—and has what Captain Post has described as a “complex history”, going back to 1948, when APS was established. That scheme contained several unique features, including a unilateral trustee power of amendment and a no-worsening clause. Six trustees were appointed by the employer and six were elected by the members. Amendments required two thirds of trustees to ratify them; employer approval was not required.

In 1973, in return for substantial increases in contributions, members were invited to transfer to APS part 6 to enjoy unlimited inflation protection. In 1984, APS closed to new entrants, pending privatisation of BA, and NAPS was established.