Written statement to Parliament

Light dues 2014 to 2015

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Announcing changes to the GLA's pension scheme and reductions in the light dues rate.

The 3 General Lighthouse Authorities (GLAs) for the United Kingdom and Republic of Ireland provide an essential service for mariners through the deployment of coastal aids to navigation and inspection of harbour lights. The celebration of the 500th anniversary of Trinity House this year is helping to highlight the continuing vital role of these historic organisations. However this year and next will witness 2 significant changes affecting the GLAs.

In line with provisions in the Public Service Pensions Act 2013, the GLAs’ pension schemes will be closed and their members transferred to the Principal Civil Service Pension Scheme (the rules of which the current schemes already follow by analogy). The reserves in the General Lighthouse Fund (above a minimum level required to maintain operational cashflow) will be used to fund this transfer, supplemented by a loan from the Department for Transport, which will be repaid through the fund over the next 10 years.

The transfer, which addresses the pension liabilities of the GLAs, will be of significant benefit to light dues payers. First it removes a source of volatility and risk for the General Lighthouse Fund from uncertainties arising in the way pension liabilities are valued. Second, it is a fundamental component of our actions to implement the agreement made in 2010 by the Irish and UK governments that, from 2015 to 2016, the work of the Commissioners of Irish Lights in the Republic of Ireland will be met fully from Irish sources.

In this way, the government is laying the ground for a sustainable reduction in the call on the UK light dues payer, delivering on its commitment to creating the right conditions to support one of the UK’s most important industries.

On top of this, the GLAs have continued to improve the efficiency of their operations by working together, harnessing new technology, and a concerted programme of converting aids to navigation to use solar power. Therefore, I have decided to reduce the light dues rate by 1 penny to 40p per net registered tonne in 2014 to 2015 and I intend to seek a further reduction in 2015 to 2016, dependent on the final valuation of the liability and a decision on the appropriate minimum level of the General Lighthouse Fund. Following the freeze in light dues since 2010, this represents a 14% reduction in real terms under this government.