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

Lord Bhatia Excerpts

Wednesday 21st October 2020 Lords Chamber

[Lord Bhatia (Non-Afl) [V]]

My Lords, these regulations are connected to powers recently introduced by the Corporate Insolvency and Governance Act 2020 to aid certain co-operative entities that are in financial difficulty. They will enable them to obtain a moratorium and thus give them respite from their creditors, or to be able to propose restructuring plans, including compromise arrangements to facilitate the rescue of their businesses. The regulations have been welcomed by the Labour shadow Minister for social security, who stressed the importance of the PPF.

As we know, the country is facing a dire economic outlook, with severe shocks being inflicted on many employers and on many pension schemes. The department responsible for social security must ensure that the PPF is ready and capable when it comes to absorbing the potentially thousands more pension scheme members who will require security over the coming year. It is imperative that the fund is in a good position to continue to provide compensation to those who need it.

The country is currently living with the health issues caused by the coronavirus. Under the three-tier scheme, thousands of businesses are going bankrupt, causing unprecedented levels of redundancies. Families are suffering due to a lack of income and are becoming increasingly dependent on food banks and charities. It is therefore vital that their pensions are protected.

It is pleasing to know that the Opposition has not objected to these regulations, but at the same time they have rightly raised questions in order to get the right levels of protection for employees.