Ford and Visteon UK Ltd

Debate between James Duddridge and Steve Webb

Thursday 12th December 2013 Commons Chamber

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I join in congratulating my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) on his work as chair of the all-party group and his perseverance over a number years in raising this issue, along with the officers and members of the all-party group, which is well represented today. Such unanimity across the House, across political parties and across parts of the United Kingdom is rare and is all the more telling for that. The House has spoken today with a single voice. Those who follow our proceedings, both in person and by other means, will have heard clearly the single view of the House of Commons.

As you will be aware, Madam Deputy Speaker, at the beginning of our proceedings your fellow Deputy Speaker relayed Mr Speaker’s guidance. We respect that guidance, of course. I am particularly conscious of the need to avoid saying anything that would in any way undermine or prejudice the case being brought by Unite the union and by individual former Visteon workers. We want to see justice done through due process. I hope the House will understand that my remarks are slightly more guarded for that reason.

We discussed this matter almost exactly a year ago in a debate in Westminster Hall that raised many of the same issues. In the course of that debate, I said that I was particularly conscious of the Visteon workers ending up in the Pension Protection Fund and, as hon. Members have said, finding that the pension they receive is not much more than half the pension they were expecting. With my hon. Friend the Member for South Basildon and East Thurrock, I met members of the Visteon Pension Action Group in summer 2012, and it was their individual case studies that made me acutely aware of the impact of the PPF cap on their entitlements under the scheme. As I explained at the time, the thinking behind the cap was to ensure that what I loosely call the “fat cats” of the scheme, the people right at the top, could not manipulate matters and still receive a full pension. That was why the previous Government introduced the cap. It was my judgment at the time, and it remains so, that the cap was having an unfair and adverse impact on people who had relatively large pension entitlements not because they had earned phenomenal amounts of money, but because they had given very long service.

During the debate, my hon. Friend the Member for South Basildon and East Thurrock referred to his constituent Mr Varney, who had about 38 years of combined service with Visteon and Ford, and my hon. Friend the Member for Maldon (Mr Whittingdale) referred to his constituent Mr Sharpe, who had served for 27 years. These are the sorts of workers potentially caught by the cap, depending—obviously—on their wage. I said in last year’s debate that we were looking at whether we could do something about that, and I am pleased to confirm today that we have acted upon that promise. The Pensions Bill, which is now in another place, provides that for those who have been members of a scheme for more than 20 years, the cap should be increased by 3% for each additional year they are above the cap. Obviously I cannot comment on individual cases but, in principle, someone who has served for 38 years would have 18 lots of 3% so a cap 54% higher than the standard cap. If they were still capped at that point, as it were, their pension would be 54% higher than it is currently.

Sadly, these things take time—the Bill has not passed the other place and when it has we will have to produce detailed secondary legislation—but I can assure the House that we intend these higher rates of payment to be in place in the lifetime of this Parliament and to apply from that date onwards. They will not be retrospectively applied, but they will apply to schemes already in the PPF, such as the Visteon scheme. I am aware that probably only 60 or 70 Visteon employees will be affected by this measure, but I hope that for them, who have suffered the biggest proportionate loss, this will be of some benefit.

[James Duddridge]

I fully support the payment protection being discussed, but if I follow the logic correctly, the Government are, in effect, paying for Ford’s failure to take moral responsibility. Will there come a point when the Government look to Ford to repay money they have paid out through the PPF?

--- Later in debate ---

[James Duddridge]

I totally agree that constructive dialogue will provide the right way forward. It is what everyone has been trying to achieve ever since the first debate on the issue. If that constructive dialogue does not produce the results we hope for, will the Minister consider seeking a meeting with his opposite number in the United States to see whether any political options across the pond could be explored to encourage everyone to do the right thing?

[Steve Webb]

At the back of my mind is a feeling that I would not want to meet my hon. Friend in a dark alley at night. I am not sure why I have that feeling. [Laughter.] My hon. Friend put his point forcefully. Given that representatives of Ford have agreed to meet me in a spirit of constructive dialogue, I shall leave it at that for now, but we shall clearly have to reflect on what further actions could be taken.

Finally, let me reassure members of the all-party parliamentary group that I shall be happy to report the outcome of my conversation with Ford UK to their office. Obviously I do not want to raise any false hopes—Ford’s position is well known, and I do not want to pretend that it has suddenly changed—but I am trying to engage constructively with the company, and I hope that the company will engage constructively with the House.