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COMMONS AMENDMENTS

117Clause 87, Page 38, line 36, at end insert--
("(2A) The Secretary of State may make a scheme providing for the transfer to any listed person of any of the property, rights and liabilities of a person with whom the Secretary of State has made arrangements under section 2 of the Employment and Training Act 1973 (arrangements regarding employment).")
118Page 39, line 10, after ("(2)") insert ("or (2A)")
119Page 39, line 13, at end insert--

("(8A) A scheme under subsection (2A) is invalid unless it is made with the consent of the person from whom the transfer is to be made.")
120Page 39, line 14, leave out subsection (9)
121After Clause 87, insert the following new clause--
TRANSFERS: WALES

(" .--(1) The National Assembly for Wales may make a scheme providing for the transfer of any of its property, rights and liabilities to the National Council for Education and Training for Wales.
(2) The National Assembly may make a scheme providing for the transfer to the Council of any of the property, rights and liabilities of a person with whom the National Assembly has made arrangements under section 2 of the Employment and Training Act 1973 (arrangements regarding employment).
(3) A scheme under this section may include such supplementary, incidental, consequential or transitional provisions as the National Assembly thinks are appropriate.
(4) A scheme under this section comes into force on the day it specifies for it to come into force.
(5) When a scheme under this section comes into force it has effect to transfer (in accordance with its provisions) the property, rights and liabilities to which it applies.

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(6) If a scheme under subsection (1) includes provision for the transfer of liabilities, the day specified by the scheme for it to come into force must not fall after the end of the period of 3 years starting with the day appointed under section (Commencement) for the commencement of section 86.
(7) The day specified by a scheme under subsection (2) for the scheme to come into force must not fall after the end of the period of 3 years starting with the day appointed under section (Commencement) for the commencement of section 86.
(8) A scheme under subsection (2) is invalid unless it is made with the consent of the person from whom the transfer is to be made.")
122After Clause 87, insert the following new clause--
("Transfers: further provision
STAMP DUTY

.--(1) A transfer effected by virtue of section 84 or 86 is not to give rise to liability to stamp duty.
(2) Stamp duty is not to be chargeable on a scheme made under section 85, 87 or (Transfers: Wales).")
123After Clause 87, insert the following new clause--
CONTRACTS OF EMPLOYMENT

(" .--(1) This section applies if rights and liabilities under a contract of employment are transferred by virtue of--
(a) section 84 or 86, or
(b) a scheme under section 85, 87 or (Transfers: Wales).
(2) Anything done by or in relation to the transferor in respect of the employee before the day on which the transfer takes effect is to be treated on and after that day as done by or in relation to the transferee.
(3) For the purposes of Part XI of the Employment Rights Act 1996 (redundancy payments etc) the employee is not to be regarded as having been dismissed by virtue of the transfer.
(4) For the purposes of that Act the employee's period of employment with the transferor is to count as a period of employment with the transferee, and the change of employment is not to break the continuity of the period of employment.
(5) The preceding provisions do not prejudice any right of the employee to terminate the contract of employment if a substantial change is made to his detriment in his working conditions, but no such right arises by reason only of the change in employer effected by the transfer.
(6) For the purposes of this section--
(a) the transferor is the person from whom the rights and liabilities are transferred;
(b) the transferee is the person to whom the rights and liabilities are transferred.")

4 p.m.

Baroness Blackstone: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 117 to 123. In moving those amendments, I shall speak also to Commons Amendments Nos. 166 to 168 and Amendment No. 174.

Since we last discussed in this House the provisions in the Bill to support the smooth transition to the new arrangements, we have been working very closely with a wide range of partner organisations to work through further details. I would like to pay tribute to our partners, and in particular to TECs and chambers of commerce and training and enterprise councils, for the positive and constructive way they have worked with us to solve some very complex issues and for their

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commitment to ensuring a successful transition. These amendments arise from those discussions and form the final piece of necessary legislative jigsaw.

Amendments Nos. 117 to 123 are designed to ensure that the assets, rights and liabilities of existing organisations can be transferred, as appropriate, to the LSC, ALI and Ofsted in England or to the Council for Education and Training in Wales. Among other things they will allow us and the National Assembly to protect the rights of individuals and to ensure worthwhile projects can continue under the new arrangements.

Amendments Nos. 166 to 168 will allow us to ensure that the rights of current pensioners and deferred pensioners of the TEC national pension scheme and other TEC salary and related occupational pension schemes can be safeguarded. These clauses will enable the rights and obligations under TEC schemes, with the consent of the trustees of those schemes, to be transferred to and administered under a new scheme or schemes made within the Principal Civil Service Pension Scheme. Such a scheme would be designed to ensure that the pensioners and deferred pensioners enjoy the same level of financial benefits and are no worse off in any respect than under current arrangements. These new provisions are for the benefit of the individuals concerned and the public purse. It is expected that most of the current TEC final salary pension schemes will cease to be viable because significant numbers of active members will transfer to the PCSPS on taking up employment with the LSC. These provisions will enable the trustees of the current schemes to discharge their duties to the remaining pensioners and deferred pensioners in a cost-effective way.

Finally, Amendment No. 174 provides additional safeguards to ensure that TEC assets continue in future to be used to meet national priorities and for the benefit of local communities. Many TECs have evolved into complex organisations and they hold assets whose gross value is in excess of £600 million. These assets have been generated either directly or indirectly through the significant contracts TECs have with the Government. It has become clear that while the current contractual framework provides a number of safeguards, it does not cover all the potential scenarios which are now beginning to emerge.

Some TECs are proposing to wind up the company and return all remaining funds to the Government. Others have plans to keep the company going in one form or another. These plans range from some form of economic development company to companies selling specialist services to business. In a small number of cases there are proposals which seem to be moving away from one of the fundamental principles which has underpinned the work of TECs. That principle is that any profits which the company makes should be recycled into activities for the benefit of local communities. Instead, individual shareholders of associated companies, who might also have been former TEC employees, could stand to gain. We believe we must ensure that no TEC resources are used in support of such proposals.

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We have made it clear to TEC chairs that these new powers in no way change our overall approach. I want to emphasise that point very strongly. It is still our aim to reach agreement, TEC by TEC, on the use of assets in a way that is consistent with national priorities and the needs of local communities. In taking these powers it is not our intention to override TECs' existing commitments which we have agreed in their business plans, nor to exert a perpetual power over future arrangements. Neither do we wish to interfere with those assets brought to merged CCTEs by chambers or legitimately accrued since merger in the membership fund. Such assets should and will be available to chamber members to establish a new chamber.

In recent discussions with TECs we have had the opportunity to emphasise those intentions and I know that they understand and accept our assurances that these powers of determination set out in this clause are powers of last resort for use when other avenues have been exhausted. They have also greatly welcomed our commitment to underwrite unforeseen future liabilities to allow boards to wind up companies quickly and effectively.

We will continue to work closely with boards over the coming months. But in the final analysis the Government have a responsibility to ensure that assets continue to be used to benefit national priorities and local communities. Amendment No. 117 will allow us to do that. I commend it and the other transitional provisions to the House. I beg to move.

Moved, That the House do agree with the Commons in their Amendments Nos. 117 to 123.--(Baroness Blackstone.)


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