Ford and Visteon UK Ltd

Simon Burns Excerpts

Thursday 12th December 2013 Commons Chamber

[Mr Simon Burns (Chelmsford) (Con)]

I thank the Backbench Business Committee for granting this important debate. I also pay tribute to my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) for the tremendous work that he has done as chair of the all-party parliamentary group in support of Visteon pensioners since his election to the House, and the way in which he has led his merry band of warriors in keeping this issue at the forefront of people’s minds. We are not prepared to allow it to fade away with time and be forgotten. I think that the strength of feeling and the outrage over what is basically an issue of decency and morality have been obvious in the two speeches that we have heard so far today.

I, too, do not wish to use my speech to knock an international company that provides valuable jobs, expertise and innovation in this country. However, I am baffled by the fact that that it is seemingly being led by its north American approach to business—which is infinitely hard-nosed—and is not prepared to recognise what it is doing to a group of people who, although totally innocent, are being made to suffer ruined retirements, despite the assurances that they were given back in 2000 that their pensions would be looked after and would be on a par with the pensions of those who worked for Ford.

I am surprised at Ford’s intransigence in not recognising its moral duty to act decently. I know that business can be very cynical—Bob Dylan used to say that money shouts—but one would have hoped that there was still a sense of decency, and that this company would be prepared to consider the position of a small group of people who, although they have fought magnificently, will always be the Davids in this David and Goliath battle.

Like my hon. Friend, I find it sad that nothing has moved forward since the last debate, in which I was unfortunately unable to participate because I still wore the shackles of ministerial office. It seems that if we are not careful and if Ford is not prepared to regain its sense of decency, the matter may have to be resolved in the courts, which I do not think is in anyone’s interests, especially given the time scale.

It appears from all the evidence that even if, back at the turn of the century, Ford was following what other companies were doing and removing its suppliers from its direct control by creating new companies, the hands of Visteon, a company created to be independent from Ford, were tied from the outset. I understand that Ford had a virtual monopoly over the parts coming out of Visteon, and was thus in a position to drive down prices unilaterally. There was no proper, vibrant, functioning market, and that is not in any independent company’s natural interest. I also understand that Visteon had to buy its materials from the Ford foundry in Leamington, although they could have been obtained elsewhere at a more competitive and lower price. Once again, Ford seems to have kept Visteon’s hand behind its back and thwarted any opportunity that it might have had to develop as a vibrant, successful company.

I find it incredible that when Ford was keen to create Visteon and cast it aside, in effect, from Ford itself, those who worked for Ford and were going to be employees of the new Visteon were advised that the Ford European works council agreement guarantees that

“Visteon employees transferring their past service benefits to the Visteon Fund will receive the same benefits as at Ford, both now and in the future for all their pensionable service.”

Beyond that, employees were encouraged to join the Visteon scheme and transfer their pensions with statements such as:

“Your accrued pension rights will be protected.”

To me, and probably to all those people who were about to become Visteon employees, those were cast-iron, concrete statements of fact that gave them protection.

We also have to remember that this is not some plan to change pension arrangements in the future. I accept that many private companies over the last decade—as well as Government, and including Members of this House—have been changing their pension arrangements because it has been found that the existing arrangements are too expensive in the current economic climate. They are moving to salary-average schemes, but that is always for the future. They do not start tinkering with the commitments, the payments, the arrangements and the deals that have been done in the past. These changes are for the future. That is not what has happened to the Visteon pensioners, however. Their pensions—that they took out in good faith, and that they believed were safe and secure for all their pensionable life—have now, because of what happened to Visteon in 2009, been noticeably, and in some cases severely, cut by this cynical operation to create a new company independent of Ford.

[Huw Irranca-Davies]

The right hon. Gentleman is making a powerful point, particularly on this issue of the assurances that were given to Visteon pensioners. He, like me, will have received the Visteon action group briefing so he is clearly familiar with this quote:

“Your accrued pension rights will be protected.”

It was also stated that “not only” would their pension be “secure” but it would be in their best interests to “transfer” their pension and their pension benefits were “guaranteed”. People were not being greedy or stupid; they were acting in the best interests of their families and themselves on the best available advice, and it is morally repugnant for a company to walk away from those assurances now, when they were either delivered by that company or were vetted by that company before being delivered.

[Mr Burns]

I am extremely grateful to the hon. Gentleman for making that point because he is absolutely right. There were no weasel words. There were no cop-out clauses or any excuses that could be made that people had misunderstood what had been said to them or the commitments that had been given to them. They were, in so far as anything in life can be, cast-iron guarantees that those people, who in most cases had worked so loyally for so long for Ford, would have their pensions guaranteed. Having met a number of them, including constituents of mine, I have no doubt that they feel as though they have been kicked in the stomach because of what has happened to them and that they are having to suffer through no fault of their own.

That is why I say that Ford—and in particular Ford in the United States of America, which I believe is leading Ford in the UK on this issue—should sit down and quietly consider their conscience again. [Interruption.] The hon. Member for Colchester (Sir Bob Russell) says, “If they’ve got one,” and I can understand why he says that because it does seem that they are without conscience. Of course companies have a responsibility to their existing work force and their shareholders to make a profit, but this is even more important: “You don’t make a profit if you don’t have a loyal, hard-working and decent work force.” If the company is prepared to see some of its work force treated like that, despite the cast-iron guarantees that it gave them, we have to wonder what kind of conscience it has.

I hope that the company will think again as a result of this debate and of the lobbying by Members on both sides of the House, by the trade unions, by the action group and by others, and that it will not consider drawing the matter out even longer, because, sadly, some of those pensioners will die during that time. I hope that the company will do the decent thing, the morally right thing, and restore those pensions to the people who should never have had them taken away from them in the first place.

--- Later in debate ---

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

May I add my congratulations to the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) on securing this debate? We have heard unanimity across the House on the issues at stake.

I have been struck by the strong sense in the contributions to this debate that Ford has a moral responsibility to take seriously the issues that have emerged since Visteon’s collapse. That point has been put across eloquently by Members from across the House. That moral responsibility comes from the fact that Ford workers, who had given many years of service, believed that their pensions were safe. Some of those workers are with us today. Members from across the House have made the point that Ford is a blue-chip brand with a long track record in the UK. For those reasons, this case has continued to arouse strong feelings on both sides of the House.

I ask hon. Members across the House to reflect on how one ensures that companies engage in and understand their responsibilities beyond the bottom line. Another way to describe a moral responsibility is to say that companies, corporations and those that employ people in our country have obligations beyond just the maximum profit they can make. That is certainly what the workers at Ford always felt, and they were assured—and felt assured—that in transferring their pensions to Visteon, their accrued rights would be protected.

It is important to add and iterate—I suspect the Minister will want to reflect on this—that at play here is the wider issue of what happens when occupational pension schemes get into trouble and it is discovered that they are sponsoring an employer that is going under. The previous Government, reacting to the Visteon case and to other well-known examples, created the Pensions Regulator and the Pension Protection Fund. I suspect the Minister will want to say something about the interaction between those institutions—not just the pensions landscape as it sits now, but as it relates to Visteon pensioners. Indeed, he recently proposed an amendment to the Pensions Bill so that the cap on payments under Pension Protection Fund regulations can be raised. I understand that there are Visteon pensioners who will benefit from that—those who might have retired before Visteon collapsed, but who have long years of service with Ford and then Visteon—but it is not a solution for all those pensioners.

A significant question that has been raised by Members across the House concerns what the Government can do and need to do to ensure and underpin occupational pension arrangements. The Pension Protection Fund and Pensions Regulator are central to that, and if I remember rightly, the hon. Member for South Basildon and East Thurrock said that the Government can do more on the cap and the need for proper independent advice on transfers.

Pensions are a complicated business, and during pension transfers from one company to another, employees inevitably depend on the advice they are given from what they understand to be expert sources.

[Mr Simon Burns]

I have listened carefully to the hon. Gentleman, and I should be grateful to know what his message is to Ford about this unacceptable situation.