Carillion

Debate between Lord Young of Cookham and Lord Higgins

Monday 15th January 2018 Lords Chamber

[Lord Young of Cookham]

I am trying to find the appropriate information—and I have now found it. It says that it is likely that the majority of pension schemes will transfer into the PPF with a consequential effect on members’ benefits. Pensioners receive 100% compensation and non-pensioners receive 90% of their accrued pension, subject to an overall cap, which is what I think I said in response to an earlier question. If by any chance this briefing is wrong, the person who wrote it will be writing very quickly to the noble Lord. On the broader issue, the Pension Protection Fund is funded by a levy on all pension funds, and I am confident that it has the resources to take on board the liabilities it is likely to inherit from Carillion. The PPF will, of course, get the assets of the scheme, which, at the time of the last audit, were worth £2.267 billion.

[Lord Higgins (Con)]

My Lords, following up the point on pensions, clearly a heavy burden will fall on the Pension Protection Fund. If I understand what my noble friend says, there are a number of individual pension funds involved. What is the position of the trustees of each of those, and will an inquiry be made into the extent to which they have fulfilled their obligations?

[Lord Young of Cookham]

That is a very good question and I hope that whoever has the responsibility for making sure that the trustees do their job—it is probably the Pensions Regulator—takes my noble friend’s question on board. There are 14 separate defined benefit pension schemes involved, which the Carillion group acquired as it expanded. Overall, there is a significant pensions deficit of £523 million as at 2013—some estimates indicate that it is now up to £1.6 billion. Perhaps I could write to my noble friend about the responsibilities of trustees, because I do not want to imply in any way that they have not been conscientious in discharging their responsibilities.

Class 4 National Insurance Contributions

Debate between Lord Young of Cookham and Lord Higgins

Wednesday 15th March 2017 Lords Chamber

[Lord Young of Cookham]

My Lords, I say to the noble Lord, Lord Davies, that we are reluctant to take advice from the Labour Party on promoting harmony between No. 10 and next door. He will recall that Budget measures introduced by the Labour Government subsequently had to be revised. For the Liberal Democrats, the noble Baroness was cautious enough not to mention manifesto commitments—there are certain issues from her party that would be brought to mind.

We have made it absolutely clear that we will make good the fiscal impact of this decision in the Autumn Statement. We are not minded to borrow more, which has sometimes been suggested. However, in response to the serious issue raised by both the noble Lord and the noble Baroness, I can give a firm assurance that all the spending commitments made in the Budget will be honoured—on skills, on adult social care and on accident and emergency. We stand by those commitments.

The noble Lord asked about universal credit. There will be no change to the entitlement to universal credit by the self-employed. On the broader issues about the Taylor review, there is an issue here—and the Labour Party has recognised it as an issue; it has a commission looking at the issue. I do not think that it would be right to do what the noble Lord suggested, which is to ditch the Taylor review. It is important that we go ahead with it, but we have ruled out certain responses in how we take it forward. But there is an issue here—a threat to the tax base that we need to address.

The Autumn Budget will make good the deficit, in the normal way, so the hole will be filled, and the Chancellor remains committed to sound finance, reducing the deficit and investing in infrastructure and key public services. Those commitments remain as before.

[Lord Higgins (Con)]

My Lords, my noble friend will know that the Chancellor’s original proposal was widely welcomed by, for example, a leader in the Financial Times and the Institute for Fiscal Studies. Would he agree that the way in which the doctrine of the manifesto has developed over almost the last century needs further review now? We find ourselves in a situation where a manifesto appears at short notice, is subject to absolutely no consultation with anyone and is not subject to amendment. In those circumstances, it is not surprising that it sometimes contains rather unfortunate proposals. None the less, one must obviously abide by it in general terms—but one must surely take into account changes in circumstances. The result of the referendum means that the Chancellor will be faced with immense problems in this Parliament. Is it not a mistake to continue to tie his hands, and should we at least give him the possibility of not sticking to the manifesto commitment as it was conceived at the time of the election because of these changed circumstances? He ought not to be bound by the triple lock, which is after all a major aspect of fiscal policy, when we are trying to deal with all the problems that a hard or even a soft Brexit may produce.

[Lord Young of Cookham]

My noble friend gives some wise advice on the number of commitments in the manifesto. I think that we had 600 in our last manifesto, and I am sure that there are lessons to be learned. But I cannot agree with him that we should ditch our manifesto commitments. Confidence in the political system is not that high and if any party, once elected, were to break its manifesto commitments along the lines that my noble friend has suggested, it would not enhance confidence in the political system at all. So we have to stick within the commitments that we made and find other ways in which to reduce the deficit.