Oral Answers to Questions

Debate between Louise Ellman and Esther McVey

Monday 5th February 2018 Commons Chamber

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

1. What steps she is taking to ensure support for former Carillion employees whose pensions will not be covered by the Pension Protection Fund.

[The Secretary of State for Work and Pensions (Ms Esther McVey)]

Where all sponsoring employers of a defined-benefit pension scheme have declared insolvency, they will enter a Pension Protection Fund assessment period. The Pension Protection Fund will actively work with the scheme administrator to assess whether it is able to buy out the pensions at a higher level than the PPF benefits. Where a scheme cannot do this, PPF will provide compensation. Defined-contribution schemes do not need PPF help, because they do not promise a level of pension—the member keeps the pot they have built up.

[Mrs Ellman]

The Government have presided over a regulatory scheme where a deficit of about £1 billion has been allowed to build up in the pension fund at the same time as shareholders were receiving dividends. Can the Secretary of State guarantee that all former Carillion employees will receive in full their due pension?

[Ms McVey]

What the Government did successfully back in 2004 was set up the Pension Protection Fund, which is there to compensate people should their businesses become insolvent. This is what the fund will be doing: affording protection at 100% for those who have a pension. Those not yet on a pension will be getting 90%. The Government are ensuring that businesses are responsible to their employees and their pensions. We will be bringing in stronger corporate governance rules to make sure that boards, trustees, shareholders and stakeholders hold company executives to account.

Liverpool Passport Office

Debate between Louise Ellman and Esther McVey

Thursday 30th June 2011 Commons Chamber

[Mrs Ellman]

I thank my right hon. Friend for his contribution and certainly agree. During the course of my contribution, I will suggest what I think needs to be done to redress the situation.

It is possible that, given the circumstances in which the permanent employment status was awarded, continuing with it was contrary to an interpretation of current departmental rules, but that is a very different proposition from any notion that it was illegal. We are, indeed, discussing a unique situation, and it required an imaginative and flexible approach. In any case, advisers advise, Ministers and their staff are responsible for decisions and the advice itself is influenced by the question posed. Where is the instruction from the Civil Service Commission to dismiss the 14 staff? Does such written instruction exist? If so, will the Minister publish both question and answer?

Correspondence from the then Liverpool regional manager in June 2010 refers to advice that the Civil Service Commission could make an exception to permit these employees to be made permanent staff. Annexe E of the internal review quotes the human resources business partner as stating:

“The Civil Service Commissioners recruitment principles do allow for some exceptions—I believe there could be a small opportunity to attempt these”.

[Esther McVey (Wirral West) (Con)]

I congratulate the hon. Lady on bringing this important issue to the House. I should like to support the points she is making and add that given that this is a unique and extreme situation with many missing parts, perhaps the Minister could look at it again with fresh eyes.

[Mrs Ellman]

I thank the hon. Lady for her comments and agree with everything she says.

I want to return to the question of whether there was another way of dealing with the matter. I have quoted the views expressed by the Liverpool office regional manager in June 2010, and I would now like to refer to Paul Luffman’s letter—the letter that was never sent from the Department to the Civil Service Commission. In referring to what has happened and what should be done about it, it says:

“I would like to discuss this directly and in detail with the Civil Service Commissioners to see whether IPS is able to use one of the exceptions to fair and open recruitment, before resorting to withdrawal of the contracts. I understand that the civil service commissioners recruitment principles do allow for some exceptions to fair and open recruitment, and I believe there could be an opportunity to attempt to use these (albeit retrospectively) to rectify the situation.”