First Group, the train and bus operator, has made a multi million pound raid on its staff pension fund.
It can be revealed that during 2012, First Group, the major transport operator which also includes First Great Western rail services, took an amount of £73.3 million from its employees’ pensions. Neil Maggs, member of The Respect Party and Respect Party candidate for Mayor of Bristol, said this:
“I was researching First Bus as part of my Mayoral campaign. I came across the paragraph in their annual report which said “exceptional gain of £73.3 million”. I read the paragraph in full and did not believe it. I read it again and it’s clear as day. First bus have reduced the pensions they are going to pay their drivers, mechanics and other staff, and have used the money to boost their profits for the year.”
This is taken directly from the First Group 2012 annual report:
“UK Bus Pension Scheme changes
During the year we took actions to de-risk the UK Bus Pension Scheme, the most significant of which is that pension increases will be linked to consumer price inflation (CPI) rather than retail price inflation (RPI). In addition a pensionable pay cap was introduced along with lower pension accrual rates. As a result of these changes future pension liabilities have decreased and a one-off exceptional gain of £73.3m (2011: £nil) was realised.”
It’s there in black and white on page 77, top paragraph. The full report can be checked out here:
http://www.firstgroup.com/corporate/investors/annualreports.php First Group has been embroiled recently in the fiasco over rail franchises. Richard Branson has been trying to work out how First Group could afford to outbid him for the East Coast Main Line rail franchise. Well here at least is some of the answer – they used their staff pensions to fund part of it. The Respect Party has been and remains opposed to all privatisation. When you privatise a public service, three things always happen.
1. The service gets worse. 2. The service gets more expensive. 3. Someone somewhere makes a shed load of money out of it. Neil Maggs said that he agreed with the Respect Party stance on privatisation, and continued:
“Someone has sure made money out of this privatisation. Someone made over £73 million in fact. This is just one reason why the Respect Party will continue to oppose the privatisation programme. Yet the Tories, New Labour, and the Lib Dems are all parties of privatisation. I have another concern. Is this just the tip of the iceberg? Are other companies similarly raiding staff pensions and using CPI as their excuse? Are we stacking up a huge future poverty problem in the name of ‘De-Risking’ - which is another word for cuts?”
This begs the question as to how the staff negotiations went when the management proposed changing from one pension index to another. Did that the management tell staff that they could not continue with the pension fund as it was; that the level of pensions was unaffordable, and the cuts had to happen for these reasons? Was the management intention all along was to reduce staff pensions to bolster the company finances? If so then this is sharp practice, deception, appalling treatment of the members of the pension scheme.
And what if other businesses are trying this same tactic? Well the answer for all employees should be NO. Surely the staff pension fund should be sacrosanct, and not exist to be raided by managers who simply want to improve the company profits. It is time for Britain to put people before profits.
Neil Maggs
The Respect Party candidate for Mayor of Bristol
