British Steel Pension Scheme: Transfers — [Mr George Howarth in the Chair]

Part of the debate – in Westminster Hall at 10:03 am on 10th April 2019.

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Photo of Jack Dromey Jack Dromey Shadow Minister (Work and Pensions) (Pensions) 10:03 am, 10th April 2019

My hon. Friend makes a powerful point. In the debate over the last 12 or 18 months, we have called that the progressive default option. There is no question but that it has enormous merits and it would be helpful if the Minister were to comment on it in his response.

The experience with Carillion pointed to more general problems that started with the Government’s lamentable non-intervention. Despite the fact that the company was getting into greater and greater difficulty, and despite repeated profit warnings, they continued to let contracts to Carillion. The regulators were aware of the risks at a relatively early stage, but they did not use the full extent of their powers to avoid unnecessary burdens on business. I kid you not. I quote from what was said at the time.

The board, which failed in its duties to workers and pension scheme members, continued to pay out large salaries, bonuses and dividends, but did not pay into the pension deficit. The trustees did not alert regulators to the extent of the problems early enough. Asset managers continued voting through large pay packages despite profit warnings, and the auditors did not spot the signs of trouble early enough. There is a raft of problems associated with the scandals that have befallen too many workers in our economy. The lessons from Carillion in terms of the need for action more generally are powerful indeed.

At the next stage it is vital that the regulators act to make sure that such events never happen again. They need to become more people-focused, ensuring that workers’ pensions are protected at all costs. Rogues in the industry must be sought out and punished, ensuring that they never work in the industry again, and the law needs to be strengthened. To that end, there have been constructive discussions with the Government on presenting a Bill as soon as possible to introduce the stronger powers contained in the DB White Paper to go after rogues. Perhaps the Minister will comment on where that legislation is. It is important for two other reasons, including the introduction of the pensions dashboard—for example, the compulsion on providers to provide the necessary information to the dashboard—and the collective defined contribution pension scheme that has been agreed between Royal Mail and the Communication Workers Union.

There are welcome measures on pensions that can and should be taken where there is a degree of consensus, even if we argue that the Government should go significantly further. The sooner they are introduced into legislation, the better.

In conclusion, this is little comfort to the workers of British Steel or those in Carillion, but the tragedy that befell them was at the centre of the drive for changing and strengthening the law last year. It is at least something of a legacy, even if it is cold comfort to them. At the heart of it were MPs such as my hon. Friends the Members for Blaenau Gwent and for Aberavon, who played a major role in highlighting the scandal and demanding that action be taken.

At the next stages, I stress again that it is important that lessons are learnt by all those I have referred to and that the law is strengthened. I will finish by referring to something that my hon. Friend the Member for Blaenau Gwent said, and he was absolutely right. Is it necessary to change the law in the ways that I have argued for? Yes, without hesitation, but there are powers that exist now in criminal law, and those powers should be used. I know the workers of Port Talbot would say that those evil men and women who cheated them on their pensions need to be investigated, tracked down and put in the dock. An unmistakable message must be sent: if you rob workers of their pension scheme, you are an utter disgrace, will end up in the dock, and, in extreme cases, in prison.