Pension Protection Fund (Moratorium and Arrangements and Reconstructions for Companies in Financial Difficulty) (Amendment and Revocation) Regulations 2020

Baroness Ritchie of Downpatrick Excerpts

Wednesday 21st October 2020 Lords Chamber

[Baroness Ritchie of Downpatrick (Non-Afl) [V]]

My Lords, I thank the Minister for the explanation of the regulations. My understanding is that they extend the Pension Protection Fund’s rights as a creditor when co-operative and community benefit societies have a moratorium in place to protect them from creditor action.

My first question for the Minister relates to community benefit societies. The Pension Protection Fund is UK-wide and therefore applies to Northern Ireland, credit unions being a type of community benefit society operating there. There are two types of credit unions but the one that is widespread and of which I am most aware is the Irish League of Credit Unions, which operates in two jurisdictions. Given that it is headquartered in Dublin, would it benefit from the rights outlined in the regulations? Maybe the Minister could write to me if she did not have the answer to hand.

I take note of the remarks of the noble Baroness, Lady Altmann, when she said that the Pension Protection Fund, set up by statute in 2004, exist to protect people and provide compensation when required. As a former Minister for Benefits and Welfare in Northern Ireland, I am fully aware that we have a system there of parity with London, particularly on social security and pension issues.

The Northern Ireland Assembly and the Executive bring forward their own legislation which is exactly the same as that which exists in London. In fact, these regulations were enacted back in August. Can the Minister say what discussions have taken place with the Northern Ireland Executive on the potential impact of these regulations, taking into consideration that the pandemic will perhaps result in some insolvencies? Many people have already lost their jobs, so this is really about the ability of the Pension Protection Fund to discharge its responsibilities, particularly in a place such as Northern Ireland which does not have the inbuilt financial capacity and resilience to do that. That is particularly the case when confronted with an issue such as the pandemic, which brings its own financial pressures.

The issue of financial resilience was raised in the other place, so on a more general basis, I will ask the Minister this: is the Pension Protection Fund resilient enough? Other noble Lords who have already spoken have referred to that. Does it have the necessary resources to address the extraordinary potential problems that could ensue around insolvencies as a result of the pandemic? What measures will be taken to ensure that the fund is ready and capable of absorbing what could be potentially thousands more pension scheme members who will require security over the coming year? Perhaps the Minister could advise me in writing about what meetings have taken place between the Department for Work and Pensions and the Pension Protection Fund to review its performance.