My honourable friend the Parliamentary Under-Secretary of State for Transport (Gillian Merron) has made the following Ministerial Statement.

My right honourable friend the Secretary of State for Transport is responsible for determining the remuneration of board members of the Civil Aviation Authority (CAA) under paragraphs 6 and 7 of Schedule 1 to the Civil Aviation Act 1982. This responsibility includes determining pension provision for current and former board members. In practice, board members’ pensions are broadly analogous with the Civil Aviation Authority Pension Scheme (CAAPS).

Under paragraph 7(2) of Schedule 1 to the 1982 Act, once the Secretary of State has made a determination he or she is obliged to lay a Statement before each House of Parliament containing particulars of that determination.

With effect from 6 April 2006 the CAAPS rules have been amended to take account of changes in pensions legislation introduced by the Finance Act 2004. The CAA section of the CAAPS has been amended to reflect these legislative changes. The determination, which has been laid before Parliament today, has been made to bring the named current CAA board member’s pension into line with the CAAPS.

As a consequence of the changes the salary for pension purposes is now no longer subject to the earnings cap (established under Section 590C of the Income and Corporation Taxes Act 1988) which existed previously. Mr Arscott (a pension member by analogy) will now have his benefits calculated on that basis with a commensurate increase in his pension. The determination relates only to the pension payable to Mr Arscott and does not affect the pension arrangements for any other member of the board.