Budget Resolutions

Nick Smith Excerpts

Thursday 23rd November 2017 Commons Chamber

[Nick Smith (Blaenau Gwent) (Lab)]

It is a pleasure to follow the hon. Member for North Cornwall (Scott Mann). I will be making just one argument today on behalf of steelworkers in south Wales and across the country, because this is a live issue that needs ministerial action. The pension freedom laws are proving to be a money-spinner for the Government, with the OBR forecasting that the Government will raise over a billion pounds in taxes on withdrawals in this financial year. However, right now in South Wales, a pension problem is developing in the steel industry—one that we cannot ignore in the race to raise funds.

Around 130,000 members of the Tata retirement fund are facing a December deadline for one of the most important decisions of their lives. Their British Steel pension funds, usually worth between £300,000 and £500,000, could soon be transferring to the Pension Protection Fund or the British Steel pension scheme 2, but for members yet to claim their pension, there is a third option. Since April, the fund trustees have received requests for about 11,000 quotes for pension transfers, and 1,700 have actually transferred their benefits. I have constituents not sure what to do with their hard-earned pension pot, and some have complained about unclear guidance and poor administration.

There are concerns that some advisers, knowing that workers can now withdraw their pension pot, are suggesting transferring money to higher-risk or badly performing schemes, all the while raking in hefty administration fees. The situation has been described in the Financial Times as a “feeding frenzy” for unscrupulous advisers. It would be heartbreaking if, facing the pressure to make a decision, workers were pressed into life-altering decisions that destroy their futures—futures in which they wanted to enjoy the fruits of their labour or need help with the costs of care.

I have written to the Financial Conduct Authority, which has already sent supervisors to the region to see what can be done to protect these workers, but I am also asking the Government what they can do to avoid potential disaster for many. I want to ask the Minister some questions.

[Chris Ruane (Vale of Clwyd) (Lab)]

He’s not listening.

[Nick Smith]

He isn’t, is he?

Have the Government assessed whether the independent financial adviser provision close to these steelworks has the capacity to deal with the demand? If it has not, can the Pensions Advisory Service help if there is a problem? Now that the FCA has visited Port Talbot, have the Government received evidence of financial sharks at the site, so that action can be taken? Given that these stories have broken so close to the deadline, do the Government think that the deadline is now appropriate and has any consideration been given to its possible delay? These pension law changes look set to provide a Treasury income stream for the years ahead, but there is a duty of care on us to make sure that this freedom of choice is backed up with guidance and support for these workers. Otherwise, I am afraid for the future of poorly advised steelworkers across the UK for the years ahead.