Plumbers’ Pensions

Deidre Brock Excerpts

Tuesday 25th October 2016 Westminster Hall

[Deidre Brock (Edinburgh North and Leith) (SNP)]

It is a pleasure to serve under your chairship, Mr Bailey. I congratulate my hon. Friend the Member for Perth and North Perthshire (Pete Wishart) on securing this extremely important debate. I should say at the outset that both the plumbing employers federation, SNIPEF, and the pension scheme for plumbers are headquartered in my constituency, and that both have made representations to me.

The essence of this debate is the treatment of small companies: the person round the corner who runs a business out of the back of a van and employs one or two people. Carrying the orphan liabilities of the pension scheme is utterly debilitating for such small businesses. It can leave them with unsustainable debts and therefore make their businesses unsustainable too.

As my hon. Friend outlined, orphan liabilities include liabilities incurred by companies that left the scheme before the legislation changed, so current employers who get to the end of their time in the scheme can be picking up the tab for employers who ceased to be scheme members years ago. Those former employers may have retired and have no interest in the industry now, but their business life continues to have an impact on people still working in the industry, and especially on people who are approaching retirement. If the current circumstances continue, those people will face the loss of their savings, their houses and their retirement. Having spent their working life in hard physical labour, they now face spending their retirement in penury. That simply cannot be right, especially when the cause of it is their desire to do right by their employees by ensuring a decent retirement for them.

I will be interested to hear what the Minister says on another point that we should have regard to: the effect on younger plumbers who may be sole traders at the moment, but who are thinking about taking on another member of staff. If they are discouraged from providing a workplace pension by seeing what it has done to previous generations of plumbing employers, will that not run counter to the current efforts to have everyone signed up to a pension? We must find a way to amend the section 75 regulations—my hon. Friend gave a couple of good examples of how that might be possible—and give employers a break. Certainly the pension scheme must be sure that it can meet its liabilities, but that must not be at the cost of people’s savings and investments being destroyed through no fault of their own.