BHS

Lord Stoneham of Droxford Excerpts

Monday 6th June 2016 Lords Chamber

[Baroness Neville-Rolfe]

I am grateful for the noble Baroness’s thoughtful comments. I, too, used to be a pensions trustee and my experience was that you lived in constant fright of doing the wrong thing and that you really did try very hard to be on top of management and to make sure your responsibilities were fulfilled—otherwise the riot act was, rightly, read to you by pension schemes’ legal advisers. You also tried to look ahead, and any suggestion of M&A was always a good opportunity to try to make sure that the pension fund always got topped up. I know that the Pensions Regulator has spent a lot of time trying to train the remaining defined benefit pension schemes to do things well.

We need to see the results of the insolvency and the Pensions Regulator investigation to see where we get to. Obviously, these kinds of arrangements are kept under review. I take the point, also made by the noble Lord, Lord Mendelsohn, that circumstances are a bit different now. Trustees have strong powers, and if you were to look at the whole situation, you would need to look at that as well. These defined benefit schemes are of course, in a way, a good thing, because the employer provides pensions for the workers so that they do not have to have state pensions. These schemes, which have now largely disappeared, can be extremely favourable for those who have them, giving them security, making them loyal to the employer and so on. It is a difficult area and I am in danger of straying into the territory of the Pensions Minister.

[Lord Stoneham of Droxford (LD)]

My Lords, I agree very much with the noble Lords, Lord Lawson and Lord Myners, when they say that the smell of this case is not good. We do not have the full facts yet, but the smell is very bad indeed. The Statement talks about seeking redress from the employer, but this presumably is a dead end, because the current employer is insolvent, and it is the group that originally owned BHS which should be vulnerable. Can the Minister assure us that the powers exist to seek redress in that direction?

The second point is about the regulator. What in the world enabled the regulator to allow these pensions liabilities to be transferred in this way, on the basis of the facts that we have seen? Who will be responsible for holding it to account and for finding out whether the legislation and the regulator’s powers are adequate to stop this sort of thing happening again?