Pre-1997 Pensions: Discretionary Increases

Jesse Norman Excerpts

Thursday 19th March 2026 Commons Chamber

[Jesse Norman (Hereford and South Herefordshire) (Con)]

I congratulate the hon. Member for North Durham (Luke Akehurst) on his excellent speech and on securing this debate, and all those who have participated in it. I thank the Minister for allowing me a few words.

On your behalf, Madam Deputy Speaker, I will mention your constituent Steve Mawby, because he has been a key campaigner in this important and very difficult area. I first got involved in it before I became a Member of Parliament in 2007, and I pay particular tribute to the late Roy Harries and Les Collard, because they brought to my attention the injustice that had been perpetrated on older pensioners by the Special Metals Wiggin pension fund. Hundreds of people were affected by that, and, alas, many of them are now dead. They were almost invariably widows, who were left receiving half of a much-diminished pension. These pensioners have not received a single penny in top-up payments since the legislation kicked in, because the company’s trustees have decided not to pay any discretionary bonuses at any point. The result is that those pensioners’ incomes are 55% lower than they would have been, and, for widows, half of that. It is an absolute outrage and a great historical injustice, and as the hon. Member says, the fact that an injustice occurred in the past does not mean that it is not important to address it now.

Of course, there was a clear blunder in the legislation. I have raised this issue in the House over the years, and it is a matter of great embarrassment that previous Conservative Administrations and the coalition Government did not address it, but there is now the opportunity to do so. On the Special Metals Wiggin pension fund, I recognise that the trustees are often directly or indirectly controlled by the company, regardless of whether they are formally independent. The company has not paid any bonuses or top-ups, and it is now owned by a large American company, Precision Castparts Corp., which is itself owned by Warren Buffett and Berkshire Hathaway. I have written to Buffett, who has said that he is not willing to help either. It is a source of great sadness to me that even such a great philanthropist and entrepreneur such should have failed to do so.

My question to the Minister is this: given that the Special Metals Wiggin pension fund has been in surplus for many years, could he, as well as considering the question of historical injustice, consider the question of whether the trustees should be required, out of the surpluses they have, to pay top-ups to the pensioners? I hope they will consider doing so retrospectively but, if not, they should do so in way that is generous, that recognises the terrible injustice that has been done, and that pays proper tribute to Les Collard, Roy Harries and all the great men and women of the Wiggin pensioners, who we justly celebrate and whose injustice we seek to fight.

[The Parliamentary Under-Secretary of State for Work and Pensions (Torsten Bell)]

I am pleased that my hon. Friend the Member for North Durham (Luke Akehurst) has secured the debate on this important matter and thank him for the thoughtful way in which he described the impact on his constituents. He spoke on behalf of many others as well, and in particular those members of the Nissan pension scheme. I join him in praising the persistent campaigners on this issue. He mentioned one organisation in particular—I have met its members, who have been campaigning for many years and have not shown any let-up in their energy during that time.

A period of high inflation and the return of many defined-benefit schemes to surplus has rightfully put up in lights of the situation of members whose pre-1997 benefits are not protected by statutory indexation. That wider debate has rightly featured heavily during the passage of the Pension Schemes Bill. It was also discussed by the Work and Pensions Committee prior to the election. As my hon. Friend said, it was considered in some length here when we debated new clause 22, when we heard many powerful speeches, including from my hon. Friend the Member for Llanelli (Dame Nia Griffith). The right hon. Member for Hereford and South Herefordshire (Jesse Norman), as he said, has been raising the issue for many years, and I have also discussed it with the right hon. Member for New Forest East (Sir Julian Lewis).

I have met many scheme members and their representatives. Recently my hon. Friend the Member for Llanelli and I met three members in Swansea to discuss exactly this issue in a lot of detail. I was grateful for their time and to her for organising that discussion.

I have listened, and I recognise the difficulties faced by some scheme members who can now see their income, their living standards and the quality of their retirement eroded by inflation, as my hon. Friend the Member for North Durham said. It is particularly understandable that members are disappointed when schemes do not award discretionary increases when they are in a strong funding position—that is obviously the change that has happened over the last few years.

As my hon. Friend will know, defined-benefit pension schemes have very different approaches to awarding pre-1997 indexation. The truth is—obviously, we will not be discussing these schemes at length today—most do provide for increases under their scheme rules; others do not allow it or require it at all; and a significant number allow discretionary increases only where there is agreement between both trustees and the sponsoring employer. Those are the cases that we are mainly focusing on in this debate. The result is that, in some cases, when employers are unwilling to support discretionary increases —even when the scheme is in a strong funding position—trustees can effectively be prevented from acting.

[Jesse Norman]

I will not detain the Minister long. If a group of trustees never pays a discretionary bonus, even though the scheme is in surplus, it starts to look like it is a policy of theirs to discriminate against a subset of their beneficiaries, and I think that is illegal. I would be grateful for his guidance on that.

[Torsten Bell]

I think there is a slightly harder case, which is examples where schemes had an established practice of paying discretionary increases—my hon. Friend the Member for North Durham mentioned Nissan cases from before the turn of this century, where that was the practice—and that was seen as the norm, and then, for different phases, such as when schemes slipped into deficit, as many did, they stopped and then did not restart when the surplus arrived. That is the case raised here. In many ways, those are the harder cases to understand, and I will come to how we think about such cases as we go forward.

[Jesse Norman]

I can understand why the Minister thinks those cases are harder; in some respects, they are less hard, because in those cases changes have been made reflecting circumstances. In the cases that I am talking about, there is a policy to discriminate against a settled group of beneficiaries. That is the bit that I think is potentially illegal.