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.'
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