Angela Eagle
Main Page: Angela Eagle (Labour - Wallasey)
Ms Angela Eagle (Wallasey) (Lab)
I thank the right hon. Gentleman for his statement and for advance sight of it. I am surprised that he failed to mention any of the details of the consultation paper on pensions that his Government published today.
I agree with the Secretary of State’s assessment of the importance of our steel industry to the UK economy. No one who saw the steelworkers march through London yesterday can fail to be moved by the sight of a dedicated and skilled workforce fighting for their industry. I welcome the right hon. Gentleman’s trip to Mumbai, along with the First Minister of Wales, to meet the Tata board yesterday—his direct engagement with the board is better late than never. I also welcome his confirmation that Tata is acting as a responsible seller. That is vital for the future of the industry here and I, too, commend Tata for it.
The British Steel pension scheme, especially the liabilities it now brings with it, is clearly an issue that requires resolution. Any resolution must protect the pensions of the scheme’s 130,000 beneficiaries, but it must also ensure that it avoids setting a potentially dangerous precedent for the millions of other occupational pensioners who currently enjoy retail prices index indexation rights. I recognise that there are no easy options. I welcome the consultation which has been published today by the Department for Work and Pensions, although the timeframe for responses is very short and the document has been published on the last day before a recess.
The suggested move from the RPI to the consumer prices index for the British Steel pension scheme risks setting a very worrying precedent for other occupational schemes. As the House will know, this change is currently illegal. Why has the Secretary of State said nothing about the details of the pension consultation he has published today? Can he now say a little more? Is there agreement across Government on the principle of the changes to sections 67 and 68 of the Pensions Act 1995, which would reduce indexation from RPI to CPI for this scheme?
What assurance can the Secretary of State give me that this proposed change will not be extended to other occupational schemes? Can this change be sensibly and safely ring-fenced? If not, the position is very difficult. What guarantees can the Secretary of State give the House on the future management of the British Steel pension scheme if such concessions limiting future benefits to pensioners are conceded now, especially on the administrative costs and the charges of the scheme going forward? Are there any other options that were considered by the Secretary of State but not included in the consultation, such as safeguarding the scheme on the public books, as was done with the postal scheme and the mineworkers?
Finally, has the Secretary of State considered the effect on the incentive to save for the wider workforce if accrued pension rights can be arbitrarily reduced in this way, as the consultation paper suggests?
Sajid Javid
I thank the hon. Lady for her comments and questions. She mentioned the demonstration yesterday. She is right that it reminds us that ultimately this is all about people. I was pleased to note that my right hon. Friend the Minister for Small Business, Industry and Enterprise attended that demonstration, alongside the Leader of the Opposition—two unlikely bedfellows but united in this cause to find a long-term sustainable future for our steel industry.
The hon. Lady, understandably, focused her questions on the pension scheme. I will answer as many of her questions as I can and provide more detail. I note that she is a former Pensions Minister herself and I take very seriously what she says. She has a great deal of experience in this area. While the consultation continues, I would be more than pleased to sit down with her and her colleagues and discuss matters in more detail, as I know will my right hon. Friend the Work and Pensions Secretary.
The hon. Lady raised the issue of time. It is a four-week consultation, as I think she knows, but time is of the essence. The steel industry is in a very difficult state. As I mentioned in my statement, Tata is looking to secure a sale as soon as possible. It has been responsible with the timeframe so far, but I hope the hon. Lady understands and agrees that timing is very important. With the timeframe that has been set for the consultation, I hope we have plenty of time to consider all the stakeholders that have responded.
On the consultation itself, one of the first important points to make is that it is the scheme’s trustees who have asked us to look at current legislation, because they believe that changes would lead to better outcomes for their members. So this is a product of the scheme trustees approaching us directly. Under the scheme’s current rules, they have the ability to make all the changes that they have proposed, but they are prevented, rightly, by legislation—the Pensions Act 1995. They have asked us whether we would consider removing that portion of the Act in the case of their scheme, and their scheme only.
It is clear from the consultation document—it was clear already—that the scheme is in deficit, so it is very unlikely that any situation can come about where, unless some of those changes are made, the scheme can be prevented from entering the Pension Protection Fund. That is not to say that there is any issue with the PPF; it is one of the strongest backbones of our pensions system. It is envied around the world and it provides an excellent safety net for so many people, but the scheme trustees have put forward this proposal and it is only right that we consider it.
I will not go into detail about how the proposal, if it were taken forward, would affect certain groups of members, but it is very important to emphasise that if the proposal were implemented it would not be the Government making any changes; those would be something that the scheme wanted to do because it believed that it would mean that in almost every case its members would be either better off or no worse off. That is the belief of the scheme trustees and it will be tested by the Pensions Regulator.
It is worth highlighting the fact that the Government have not made any decision. We are considering the pension trustees’ proposal. It is right to consider this and to consult widely, and for the Government to determine later whether it is the right thing to do.