HOUSE OF COMMONS
Second Standing Committee on Statutory Instruments, &c.
TEACHERS' SUPERANNUATION (SCOTLAND) AMENDMENT REGULATIONS 1989
Tuesday 13 June 1989
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The Committee consisted of the following Members:
Chairman: Mr. Geoffrey Lofthouse
Buchanan-Smith, Mr. Alick (Kincardine and Deeside)
Canavan, Mr. Dennis (Falkirk, West)
Dalyell, Mr. Tam (Linlithgow)
Eadie, Mr. Alexander (Midlothian)
Forsyth, Mr. Michael (Parliamentary Under-Secretary of State for Scotland)
Haselhurst, Mr. Alan (Saffivn Walden)
Hayhoe, Sir Barney (Brentford and Isleworth)
Hayward, Mr. Robert (Kingswood)
Hughes, Mr. Robert G. (Harrow, West)
Janman, Mr. Tim (Thurrock)
Jones, Mr. Robert B. (Hertfordshire, West)
King, Mr. Roger (Birmingham, Northfield)
McAllion, Mr. John (Dundee, East)
Maclean, Mr. David (Penrith and The Border)
McLeish, Mr. Henry (Fife, Central)
Michie, Mrs. Ray (Argyll and Bute)
Ross, Mr. Ernie (Dundee, West)
Stewart, Mr. Allan (Eastwood)
Mr. D. J. Gerhold, Committee Clerk.2 3 Second Standing Committee on Statutory Instruments, &c. Tuesday 13 June 1989
[MR. GEOFFREY LOFTHOUSE in the Chair]
Mr. Henry McLeish (Fife, Central): I beg to move, "That the Committee has considered the Teachers' Superannuation (Scotland) Amendment Regulations 1989. I have two points to make to the Parliamentary Under-Secretary of State for Scotland. The regulations provide for automatic benefits to be paid to widowers from April 1988. If a married woman wants to include the period between 1972 and 1988, she will have to make an additional contribution to the fund before that benefit is paid. The teachers' unions feel that there is some inconsistency between the provision for widowers post-April 1988 and that for widows between April 1972-1988. I should welcome the Minister's comments on that. Secondly, it is envisaged in the regulations that the benefit may be considered for six months after July. When a similar provision was introduced in England and Wales, it was found that the six-month period was insufficient for women in the teaching profession to properly scrutinise and decide whether to elect into that automatic benefit, so an extension of three months was given to the original suggestion of six months. The traditional summer holiday in Scottish education is about to begin and teachers will be away for six weeks. The regulations say that the women will be informed by their employers. A six-month period could slip past fairly quickly without teachers being informed of the benefit or, more importantly, having sufficient time to elect into it. I hope that there will be some flexibility. If six months proves to be an inadequate period for those involved to become informed about or committed to the new scheme, I hope that an extension will be considered.
Mr. Robert Hayward (Kingswood): I wish to comment on the period from 1972 to 1988 referred to by the hon. Member for Fife, Central (Mr. McLeish). I welcome the proposals for Scotland as much as those for England and Wales as they will remove an anomaly in the treatment of male and female teachers. It is unfortunate that the regulations have taken so long to be introduced by a Government of either persuasion. I understand the costs involved. However, if my hon. Friend the Minister reviews the superannuation scheme with his colleagues in England and Wales and discovers that it has been overfunded, given that pension schemes review their funding operations, 4 will the relevant Departments consider the possible introduction of a scheme that will benefit widows for the period 1972 to 1988? That would be an appropriate use of finance if it was discovered that the scheme had been overfunded. I welcome the scheme as it will remove an anomaly. I hope that the anomaly that has been identified by female teachers and headmistresses in both England and in Scotland can be resolved to their long-term benefit.
Mr. Dennis Canavan (Falkirk, West): I understand that the Education Institute of Scotland generally welcomes the regulations. However, will the Minister make a statement on the teachers' superannuation scheme in Scotland? Some teachers have complained to me that the net income to the scheme from the contributions of employers and employees in any financial year usually exceeds the amount of the scheme's expenditure. That may vary from year to year for various reasons, such as the number of teachers who die prematurely. If it were true that the amount of income to the scheme exceeds the amount of expenditure, and that it is not likely that that position will change in future, will the Minister tell us how he can justify such a scheme?
The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Forsyth): I am surprised that the Opposition have seen fit to pray against the regulations especially, as my hon. Friend the Member for Kingswood (Mr. Hayward) said, the regulations give, for the first time, equal treatment for men and women teachers in matters of pensions for surviving spouses. The hon. Member for Fife, Central (Mr. McLeish) referred to widowers' benefits and the additional contributions that would be required to secure cover for years of service from 1972 to 6 April 1988. However, the arrangements for providing that cover are much more generous in their treatment of women teachers than they were when the cover was extended for male teachers. In 1972, when widows' benefit was introduced, it was possible for married male teachers to buy additional provision for previous years of service, but that had to be met at full cost. Under the regulations, which I hope go some way towards meeting the anxieties of my hon. Friend the Member for Kingswood, female teachers wishing to purchase widower's benefit cover for the years of service from 1972 to 1988 will have to meet only one third of the cost. The remainder will be met for them. Such a compromise takes account of the point made by my hon. Friend the Member for Kingswood. It has been a long time coming and perhaps it should have been introduced earlier. The arrangements that have been made to help women teachers to secure that extra cover back to 1972—when it was made available for men—are appropriate. The hon. Member for Fife, Central asked about the English regulations that were not prayed against, which provide a six-month period for election. He 5 was right to say that that was an issue of possible difficulty and also that an extension had been granted in England. The regulations provide for an extension of the six-month period. I am happy to give the Committee an undertaking that we shall use those powers flexibly and reasonably to take account of teachers who may exercise their rights in that matter. The hon. Gentleman made a good point about the school holiday period. My hon. Friend the Member for Kingswood asked what would happen if the scheme was overfunded, and the hon. Member for East Falkirk—
Mr. Canavan: No. Falkirk, West.
Mr. Forsyth: I apologise to the hon. Member for Falkirk, West (Mr. Canavan). I should know his constituency as it is my neighbour, but I confused him with his excellent colleague, the hon. Member for Falkirk, East (Mr. Ewing). The hon. Member for Falkirk, West asked whether it was true that income exceeds expenditure and said that many teachers thought that that was possibly the case and my hon. Friend the Member for Kingswood asked what would happen if the scheme were over funded. The first point is that, of course, the scheme 6 is entirely notional. Many people assume that there are investments and assets whereas it is a notional scheme worked out on paper. The scheme is a very curious animal because it does not contribute towards any pension increases and has not done so since it was set up at the turn of this century. Therefore, I advise my hon. Friend the Member for Kingswood that it is rather curious to be thinking about over funding because we are discussing working out on a bit of paper what the notional returns might be. To relieve the anxiety of the hon. Member for Falkirk, West, it is certainly not the case that less is paid out than is received from the contributions of employers and teachers. Rather, an excess over the income received is paid out. I hope that I have dealt with all of the points that were raised in the debate and I commend the regulations to the Committee.
Question put and agreed to.
Resolved, "That the Committee has considered the Teachers' Superannuation (Scotland) Amendment Regulations 1989.
Committee rose at nineteen minutes to Eleven o'clock.
THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:
Lofthouse, Mr. Geoffrey (Chairman)
Forsyth, Mr. Michael
Hayhoe, Sir B.
Hughes, Mr. Robert G.
Jones, Mr. Robert B.