Pension Schemes Bill [Lords]

Debate between Pete Wishart and Stephen Doughty

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Monday 16th November 2020 Commons Chamber

[Pete Wishart]

I am grateful to the Minister for reminding the House of the work that has been done. I am fully aware of what was discussed in that Green Paper, and I am aware of the responses. I want to come on to some of the longer-term issues, because those were not really addressed in how this was looked at, but that was a decent attempt by the previous Minister to get to the heart of this and pull it together. I encourage the current Minister not to give up and to look again at our amendments—I am going to try to convince him of this; we will see how we get on—because they are modest amendments that would help people who are caught in this nightmare. They are not a total solution, but our new clauses would considerably help those who have been caught up in all this.

New clause 5 would simply permit employers in a pension scheme closed to future accrual to apply for a deferred debt arrangement provided that they meet all the other tests. It would support those who are still trading prior to section 75 being triggered to use the easements before the closure of the scheme to be included. New clause 4 would allow the flexibility to waive a debt in certain circumstances to allow an employer to exit from a pension scheme where the debt is below a de minimis threshold, which the new clause would set at 0.5% of the fund value.

Those are sensible and modest proposals that would not cost the world to enact and would leave the integrity of these pension schemes intact. We know that the Minister is likely to oppose them, but I hope that he has a think about it, and perhaps there are things that he can do in subsequent legislation based on what is proposed. I know that he recognises the difficulty in all this, but he will offer no further easements beyond those already provided for in legislation. He also says that the

“current employer debt system is intended to be equitable to all employers”––[Official Report, Pension Schemes Public Bill Committee, 5 November 2020; c. 122.]

and insists that schemes must be fully funded, but setting a de minimis write-off at 0.5% will have a negligible impact on any of these arrangements.

There are other multi-employer schemes where there may be issues. It is staggering that there have been so few issues with these multi-employer schemes outside the plumbers’ pension, but I say to the Minister that this is more of a ticking time-bomb than a sleeping lion. There are consequences to come. Government failure to get this resolved when they had the opportunity with plumbers’ pensions will come back to haunt them at some point in the future. Introducing easements and partial solutions is all very well, but if the central issue remains unaddressed, there will be consequences for everyone involved in these schemes.

I will never forget the meeting when I was first made aware of this issue. I was utterly horrified that this level of debt was stalking plumbers like some sort of malicious apparition. I said to them then that I would do everything possible to ensure that this was addressed. Five years later, we have not been able to do that. It is now all down to the Minister. He can do something to lessen this burden on honest, hard-working men and women, or we can come back here in a few years with this misery still in place and this injustice still not put right. I still hope that he will consider the amendments that we have tabled this evening.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I rise to address a number of issues. First, let me say that I fully support the amendments tabled by my hon. Friends—amendment 16 and others—on climate change. With respect to some of the comments that were made earlier, we need much more radical thinking on this if we are to see the types of fundamental shifts that we need in our economy, not just in this country but globally—recognising, of course, that pensions are invested globally—to achieve the kind of action that is needed to deal with the scale of the climate emergency. That will affect the generations to come, just as, if we do not get pensions right, the generations to come will not have the resources they thought they would receive.

I want to focus my remarks on new clause 1 and amendment 14, which show the importance of improved guidance and consumer protections, and the clauses in the Bill that relate to the valuations of pensions schemes. These issues all matter and the protections—many introduced on a cross-party basis—are so crucial because of the scandals and scams that many right hon. and hon. Members from across the House have referred to. A range of measures are needed to clear up the weaknesses in our pensions systems and pensions regulation, which have led to huge injustices.

I want to talk briefly about two injustices that have affected people in my constituency over many years: the Allied Steel and Wire pensioners and the Roadchef employees. I thank my hon. Friend the Member for Neath (Christina Rees), and my hon. Friends the Members for Birmingham, Erdington (Jack Dromey), for Oxford East (Anneliese Dodds) and for Stalybridge and Hyde (Jonathan Reynolds) on the Front Bench, for their work to support action on these issues, in particular the meeting that we had recently with Allied Steel and Wire pensioners from my constituency. I also thank the Minister, who has been in conversations about this case with my hon. Friend the Member for Birmingham, Erdington. I am grateful to him for agreeing to meet us to discuss it further. I hope we can find the time for that in the weeks to come, because it needs to be looked at. It is a historic injustice that has affected many, many people who have waited many years for it to be resolved. The Secretary of State said on Second Reading that we need to tackle all those who try to plunder the pension pots of hard-working employees, which was very much what happened in both cases.

The campaigners and members of the Pensions Action Group, which include many former Allied Steel and Wire employees, have explained clearly—I am sure it has been spoken of many times in this House—how they lost the pensions they put into and expected to receive in retirement. This has affected workers from across the country: not only former workers at the Allied Steel and Wire plant in my constituency, but in locations such as Sheerness in Kent and in other businesses, such as the shelving giant Dexion, which were also hit. Those workers were helped and supported by the financial assistance scheme set up by the Labour Government in the early 2000s. That was followed by the establishment of the Pension Protection Fund, which still exists today to step in to ensure workers’ accrued defined benefit pensions are safeguarded when employers collapse. A fundamental issue, however, is that under the terms of the protection scheme, pension income based on service prior to 1997 is not eligible to be increased in line with inflation, unlike post-1997 service. The pension income of 140,000 workers who built their pension pre-1997 has not been protected from rising consumer prices.

I want to name the individuals who have campaigned resolutely on this issue for many years: John Benson, Phil Jones and many others. Alongside other Members, I have been with them to Downing Street and elsewhere to take their case. Essentially, they have devoted their lives to making steel, making this country great and supporting our infrastructure projects, yet they have been denied dignity in their retirement. Tragically, many are sadly passing away without having received what they were entitled to. They point out, quite rightly, that the type of restrictive legislation that has existed around their circumstances does not apply to, for example, the pensions of Members of Parliament who were elected prior to 1997, many of whom have moved on to the other place. We need to think about justice and equity in all these matters, particularly as we enjoy very generous pension settlements.

Many financial assistance scheme members currently receive only 90% of their restricted pension. That was what was achieved by the scheme and the agreement under the previous Labour Government. Unfortunately, because of the lack of indexation many are seeing their actual income drop below the 50% redress required under Hampshire v. PPF in September 2018. I recently spoke to a number of them and asked them to explain how the situation had affected them and their families. We have heard today of many other such instances, which not only have financial implications but cause emotional and family strain. I want to quote some of their own words, because they bear strong witness to the reality. One worker, who left school in 1961, aged 15, and started working at the steel company, told me, “For some years, the company paid into the pension scheme. I myself in those early years did not contribute, but then the ASW pension scheme was formed.” The workforce were called to the canteen on a number of occasions for meetings with the company’s directors and told of the plan regarding the new pension scheme, which they were told had the backing of the UK Government. The workforce were given all sorts of assurances that “it would secure a comfortable retirement for themselves and their families, and everyone to my knowledge agreed this was the right thing to do.”

We then fast-forward to 2002 when shift teams were called to the conference room and told by one of the receivers that the company would close and they would lose their jobs. One colleague had tears rolling down their face. The receiver told them, “The pensions we had saved and worked for were safe as they were not touching those funds”. One worker said, “I went home after my shift had finished and told my wife I had lost my job but the pension was safe, only to find out days later that there was a shortfall and that we could lose in the region of 85% of the pension. It put me on the verge of a nervous breakdown, and at one point I thought I would go over the edge. After all those years working in heavy industry with noise, dust, fumes and unsociable hours, I have nothing to look forward to.”

Unfortunately, I could recount case after case from Allied Steel and Wire pensioners. It is only a matter of natural justice that, as well as ensuring that such scandals never happen again, as measures in the Bill seek to do —and as much reform since that time has attempted to do, to ensure guidance and protections—we must remember those who did not and will not benefit from these changes. I look forward to discussing that case with the Minister.

Many Members across the House have signed early-day motion 802 on the Roadchef scandal, which has been going on for nearly 30 years and has involved 4,000 low-paid workers who saw millions illegally transferred from their funds and then £10 million taken in taxes. I express my sadness at the recent death of my constituent Tim Warwick, who was the company secretary who exposed the Roadchef shares scandal perpetrated by the former chief executive. I pay tribute to the former Member of Parliament for Monmouth, Huw Edwards, and the GMB trade union—I declare an interest as a member of the GMB—who have campaigned on this issue for many years. Sadly—and as we saw with the Allied Steel and Wire pension scandal—Tim Warwick and others died waiting for clarity from HMRC about what tax they or the trust should be liable for, despite Parliament’s clear intention that such employee benefit schemes should be tax free. Will the Minister therefore give us an update—either in his wind-up, or perhaps he could write to me—on the latest position of the DWP and HMRC on this matter, which has been of great concern to Members across the House? That is one of the injustices that led us to the point of needing to make the types of changes outlined in the Bill and the many amendments to it.

Many of the amendments and proposals put forward are about increasing the transparency, safety and security of our pensions, which we all want to see, as well as tackling scams and injustices in the pensions system. I add my support to the amendments tabled by my colleagues on the Front Bench and by my right hon. Friend the Member for East Ham (Stephen Timms), the Chair of the Work and Pensions Committee. In that spirit of tackling injustice, we need to recognise the damage done by robbing people of their life savings and of their and their family’s future. They paid in, they expected to get something out, and they have not. I mentioned two examples, but there are still far too many injustices for many pensioners. I hope that, in a spirit of cross-party working, the Minister and others will continue to try to find justice for all those affected, and particularly those affected by the ASW and Roadchef scandals.

European Union (Withdrawal) Bill

Debate between Pete Wishart and Stephen Doughty

Report stage: First Day: House of Commons
Tuesday 16th January 2018 Commons Chamber

[Stephen Doughty]

I think the Government should accept the series of amendments we have tabled. I am communicating the concerns of the Welsh Government and the Welsh people—indeed, of many who want to respect and maintain the devolution settlement as it is. The hon. Gentleman is asking this question now, but these amendments were put down months ago and these issues have been raised.

[Pete Wishart (Perth and North Perthshire) (SNP)]

This is exclusively the responsibility of the UK Government. They introduced the repeal Bill, designed clause 11 and acknowledged that there are issues for both the Welsh Assembly and the Scottish Parliament, so it is up to them to fix it. Does the hon. Gentleman agree that this attempt to share blame with Scotland and Wales, as if somehow we are semi-responsible for this impasse, is totally disingenuous?

[Stephen Doughty]

The hon. Gentleman makes an important point.

European Union (Withdrawal) Bill

Debate between Pete Wishart and Stephen Doughty

Committee: 4th sitting: House of Commons
Monday 4th December 2017 Commons Chamber

[Pete Wishart]

I am grateful for the hon. Gentleman’s intervention, as always, but I do not recognise his view of the way things are progressing. If he will forgive me, I will make some progress and we will look at some of these issues once again. I am not going to satisfy him on these matters and his intervention has certainly not reassured me about the general progress that we have to make.

Let us get back to more of a consensual tone, because I note from the hon. Gentleman’s irritation that I may have been a tad too political in some of my remarks. I look around and I see my colleagues from the Scottish Affairs Committee on the Conservative Benches. I am genuinely grateful for the contribution that they have made. We have designed a way forward in our recommendations and observations that might help to resolve this issue. Resolution is what is required, and I think we all agree that we can find it. Although our recommendations do not directly match what is in the amendments, they are roughly in the same territory.

I think that we all agree that a framework should be agreed and not imposed. Looking around, I think that we are all agreed on that one. That is good. I think that we agree that the UK Government should not legislate on areas of competence devolved to the Scottish Government. Perhaps there is not so much agreement on that one. It genuinely disappoints me that Conservative Members still believe that it is right for the UK Government to legislate in areas of devolved competence. I am looking at the ministerial team, hoping that they will reassure me that that is not what they are seeking to do. No, I am not getting that either. We will leave that there. We were doing well and making a bit of progress, but perhaps that is a step too far. That is the difficulty that we are starting to encounter.

I am pretty sure that Ministers do not share my characterisation of the process, so I will be interested to hear what they say. I am interested in how they will describe the repatriation of devolved competences straight to the United Kingdom, instead of to the devolved Assemblies and Parliaments where they should be; how we will come together to agree the common frameworks, working together in a spirit of consensus—all the warm, cuddly things that the hon. Member for Harwich and North Essex suggested he wants—instead of having them imposed; and then some sort of process of redistribution through Orders in Council and all that sort of stuff. It is disappointing that we cannot hear that.

Amendments 164 and 42 would ensure that the UK Government had to consult and secure the agreement of the devolved Administrations in this context, so they roughly match what I have said. Indeed, they roughly match what the Secretary of State for Scotland has said. This is a really good quote from when he came before the Scottish Affairs Committee:

“A UK framework is not a framework that the UK Government imposes; it is a framework that is agreed across the United Kingdom.”

That is the approach that we need to hear more of, and we need to see how that works out. I very much support the cross-party amendments that were tabled on behalf of the Scottish and Welsh Governments, which are mainly in the name of the hon. Member for Edinburgh South (Ian Murray). I appreciated his comments today.

I am sorry to say to Labour Front Benchers that we cannot support new clause 64. I know that it is the lead new clause, but we will abstain because it suggests that the frameworks should be designed by the UK Government; not that they should come together with all the devolved Assemblies and Parliaments. Unfortunately, we cannot side with Labour on that. I hope that it withdraws that new clause. I am looking at the hon. Member for Greenwich and Woolwich (Matthew Pennycook). Please withdraw it because it is not helpful. We need all the parties in this House to work together. The presumption that the UK Government will be responsible for initiating the frameworks is not acceptable to us.

I do not even think that that is acceptable to—I am looking at Welsh colleagues—the Welsh Assembly, which the Labour party runs. I am looking at the hon. Member for Cardiff South and Penarth (Stephen Doughty). He will have to tell me whether the Welsh Government are absolutely happy about the UK Government designing frameworks.

[Stephen Doughty]

indicated assent.

[Pete Wishart]

He is saying that it is, so I will accept that.

[Pete Wishart]

I am grateful to the hon. Gentleman, because I said that. I said that the amendments do not directly match our recommendations, but that they are in roughly the same territory. I think that he will agree with me about that. He is right that they do not match.

[Stephen Doughty]

Will the hon. Gentleman give way?

[Pete Wishart]

Yes, of course—as long as I am hearing from the Welsh Government.

[Stephen Doughty]

The hon. Gentleman gives me more power than I currently have. I refer him to the detail of new clause 64. Subsection (3) states:

“Ministers of the Crown shall only create”

these frameworks with the advice and consent of the devolved Administrations. We put that forward with the aim of securing their agreement. It relates to the wider discussion and to the other amendments about the Joint Ministerial Committee. I do not think that we should be doing things on a UK-wide basis without their consent. Unfortunately, that is exactly what the Government are doing.

[Pete Wishart]

I am grateful to the hon. Gentleman for clarifying that. I just refer him to exactly what is in new clause 64:

“Ministers of the Crown shall only create UK-wide frameworks”.

The presumption is that Ministers of the Crown will create them.

House of Lords Reform and Size of the House of Commons

Debate between Pete Wishart and Stephen Doughty

Wednesday 19th October 2016 Commons Chamber

[Pete Wishart]

I shall suggest certain things that we could consider to replace it. The House of Lords is unreformable and there is nothing we could do with it. It has got out of control. It is like a huge undemocratic leviathan cloaked in ermine that would continue to feed on patronage and cronyism. It has very few redeemable features.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

I, too, find myself entirely in agreement with the hon. Gentleman. Is not the real issue for constituents and our democracy not just the absurdity of the House of Lords, but the boundary review that sees the number of seats in this place being reduced, the use of an out-of-date register leading to people being disfranchised, a political system that does not represent our nations or regions properly in our constitution, and a Government who have taken away the powers of civil society to criticise them? There is a package of things damaging our democracy.

[Pete Wishart]

I thoroughly agree with the hon. Gentleman, and I am grateful for his support. I will come on to the reduction in the number of Members of Parliament in this House, because it is important. I thought it was important to link the issues of us growing an unelected House while shrinking the number of representatives of the people. It is right that those issues are linked, because they are going on concurrently. The hon. Gentleman makes a very good point.