Oral Answers to Questions

Debate between Steve Webb and Stephen Metcalfe

Monday 1st September 2014 Commons Chamber

[Steve Webb]

My right hon. Friend has a strong track record on long-term care and making it affordable—he and our right hon. Friend the Minister of State, Department of Health, have introduced legislation on that. On the guidance guarantee, I have to be slightly wary of trying to jemmy in large numbers of different topics, but it is clear, as my right hon. Friend says, that retirees need to think about financial liabilities later in retirement. The guidance conversation offers an opportunity to start that process and to signpost people to places where they can find further information.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

8. What steps he is taking to limit the availability of benefits to migrants from other EU member states.

Ford and Visteon UK Ltd

Debate between Steve Webb and Stephen Metcalfe

Thursday 12th December 2013 Commons Chamber

[Steve Webb]

It is not the Government who pay for the PPF, but the rest of British industry. It is funded partly by the assets of the schemes in the fund and the investment returns on them and partly by a levy on schemes with defined benefit pension liabilities. I realise it does not change the issue my hon. Friend raises, but it is not the taxpayer who funds the PPF; it is other firms with ongoing defined benefit pension liabilities. The PPF does not form a judgment on the rights and wrongs of a firm’s conduct leading up to insolvency. That is a separate matter that might come up during the court proceedings.

During the debate, we heard that Visteon was spun off from Ford in 2000, before the present architecture—the Pensions Regulator and the PPF—was in place. My hon. Friend the Member for Thurrock (Jackie Doyle-Price) asked whether these sorts of things could happen again and whether a hypothetical future firm could structure its affairs with a view to minimising its pensions liabilities and passing them on to the PPF. I can reassure her that part of the remit of the Pensions Regulator is to protect the PPF and hence other levy payers. For example, firms considering a corporate restructuring that would have implications for the covenant of their pensions scheme can seek pre-clearance from the Pensions Regulator, and the latter has powers to act if a corporate transaction has been undertaken with specific intent to weaken pension protection. The situation, therefore, is considerably different from the one pertaining in 2000.

The hon. Member for Ogmore (Huw Irranca-Davies) and my hon. Friend the Member for Castle Point (Rebecca Harris) described the workers who accepted the transfer from Ford to Visteon. The hon. Gentleman said they were not greedy or stupid, which of course they were not, and my hon. Friend said they were sensible and level-headed. It was the natural thing to do at the time: someone’s employment is transferred from one employer to another, they are given assurances about their pension and it is suggested they transfer it across. There are different accounts of exactly how the conversation went, but it was an entirely rational thing for people to do. There is no suggestion that people who made that decision acted inappropriately; they acted in good faith on the assurances given.

[Stephen Metcalfe]

One issue that arose about the point of transfer was that some were reaching the end of their careers within Ford but were still left obliged to transfer before—in one case, only three months before—they retired, only to find out later that they had been disadvantaged. Could the Government look at providing for those in the process of reaching retirement a buffer zone, whereby people do not have to transfer out of the fund into which they have put most of their earnings over their working lives?

[Steve Webb]

It is worth bearing in mind that, in all these cases, we are generally dealing with a trust—a pension fund set up as a trust has trustees—and with private companies, scheme rules and so forth. It is difficult to see how the Government could write a law that interacted with all those different aspects in a rational way. I take my hon. Friend’s point, as I, too, have heard about folk who worked only a few months for Visteon, yet transferred across their life’s pension rights with Ford—with very adverse consequences. I appreciate that that happened. It is quite clear that no blame or criticism could possibly attach to the workers whose pensions were transferred across; they are clearly the innocent parties in all this.

Prior to this debate, I re-read the transcript of our debate of a year ago. I was struck by the tone, which was slightly different. I do not know whether this was co-ordinated because I was not involved in those conversations, but I was struck that a number of hon. Members said that they did not want to drag Ford down, as they recognised that Ford was a key employer for this country and that many people who worked for the company were proud to do. As I say, I was struck that hon. Members were not trying to denigrate Ford, but were concerned that, if the matter remained unresolved, Ford’s reputation would suffer. I think this striking tone will have been noticed.

It was made clear during the debate that although Visteon was spun off as a separate company, there were close links between Visteon and Ford. My hon. Friend the Member for Enfield North (Nick de Bois) mentioned the nature of the relationship, drawing on his business expertise, while some hon. Members pointed out that new contracts were not signed. Reference was made to the fact that the long service award that Visteon workers received accumulated their Ford service, and there was Ford branding and all of that. Leaving aside the legalities, it is absolutely clear that the two companies were very closely interlinked; there can be no doubt about that.

During our discussions, the potential for Select Committees to look into this issue was raised. What Select Committees choose to investigate is obviously not a matter for the Government, but I am happy to repeat the assurance I gave a year ago that if any Select Committee—perhaps the Culture, Media and Sport Committee could find an obscure angle to get going on this—decided to take up this issue, we would be happy to put at its disposal the expertise of the Pensions Regulator, the Pension Protection Fund and my own officials to advise or guide in any such investigation.

The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) asked what the Government could do. At this point, I refer back to the motion, which “calls on the Government” to do what they can and use what influence they can to bring matters to a “resolution”. The court process is happening, so the legalities will be resolved one way or another through that.

Prompted by today’s debate, I asked my officials to contact Ford UK, which they have done. We have agreed that I shall meet Ford UK early in the UK and I shall take up the concerns that have been voiced. Ford and I have agreed that the spirit of that meeting will be one of constructive dialogue. I thought the best way I could reflect the spirit of today’s debate and the many excellent speeches we have heard would be to relay in person to senior executives of Ford UK the tenor of our debate and the views of the House. Almost uniquely, we have spoken with one voice. I hope that that reassures hon. Members. In addition to what they have done by properly putting their concerns on the record again, I hope that, with our proceedings being heard beyond this House, further steps will be taken on behalf of these pensioners.

Oral Answers to Questions

Debate between Steve Webb and Stephen Metcalfe

Monday 5th November 2012 Commons Chamber

[Steve Webb]

The short answer to the hon. Gentleman’s question is no. However, one important point I would raise is that if someone only builds up a very small pension pot, they have a legal right to take it, in most circumstances, as a cash lump sum with a quarter tax-free. Even someone later in life can get an employer contribution tax relief—a lump sum taken with a tax-free contribution. That will be attractive, even in later life.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

20. What steps he is taking to tackle the causes of social breakdown.