| Previous Section | Index | Home Page |
11.11 pm
Mr. Peter L. Pike (Burnley): Pensions are important to many of our constituents. Before I became a Member of Parliament, I was a director of the Philips pension fund for a short time. Four pension schemes in my constituency have got into difficulties and the members of the scheme--some of them pensioners and some of them deferred pensioners--will not get what they expected. I shall refer to Belling in a moment, but the others were not the result of fraud--they were the result of changes in the industry and the finance not being sufficient to meet all the requirements of the pension funds.
Earlier, the Minister could not tell me whether what we are being asked to approve tonight will stop another Maxwell or Belling fiasco from taking place--indeed, my hon. Friend the Member for Birkenhead (Mr. Field) assured me that his answer would be no. To some degree, the Pensions Act 1995 followed the Maxwell incident--although the Belling incident involved a smaller amount of money and fewer people, it was important to them.
I have looked at the pension funds that have got into difficulties in my constituency and found that there is a difference between those who are participating as working members and still contributing to the fund and waiting for
a pension, and those who have an actual pension at the present time. If the pension fund goes into liquidation and is wound up, there is a clear clash of interest as moneys are gathered in to meet the requirements. My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) said that we need to ensure that pensioners have representation in addition to the other contributing workers in the fund--especially in the larger schemes that have more than 1,000 members.
Mr. Roger Gale (North Thanet):
I should be grateful if my hon. Friend the Under-Secretary would consider the case of my constituent Ken Hilditch and others like him. Perhaps in my hon. Friend's reply he might address the question whether the regulations before us tonight, which I do not seek to oppose, will help my constituent and others like him.
Ken Hilditch is a Hoverspeed pensioner. Hoverspeed was founded by British Rail, Seaspeed and Brostrums, trading as HoverLloyd, in 1981. In 1982, Hoverspeed set up a pension fund, backdated to 1981, that guaranteed cost-of-living increases to their pensioners. Indeed, the contracts of employment for Hoverspeed included a pension scheme that was inflation-linked, provided, as it said in the small print, that the increases were not excessive. At that time, "not excessive" was construed to mean not more than 10 per cent.
In 1987, the Hoverspeed company was acquired by Sea Containers and in 1989 Sea Containers decided to give itself a two-and-a-half-year contributions holiday from the pension fund, which saved the company some £750,000. In 1991, when the pension contributions should have recommenced, the company decided to give itself a further nine-month holiday, which saved a further £250,000. In other words, the company, at the expense of the pensioners, saved itself £1 million, or enough, I am told, to continue inflation linking. In 1993, the company offered the pensioners no increase whatever, but in 1994, as a result of representations made by myself and others, the pension increase was reinstated and backdated to cover 1993. The £1 million was never repaid.
When Sea Containers took over Hoverspeed, it undertook the transfer of undertakings and took on the assets of the pension fund and, of course, the liabilities of the pension fund. The company has now said that it will not, at any time, implement a cost-of-living increase above 5 per cent. Under this Government, I hope and believe that inflation will never rise above 5 per cent., but were there ever to be a change of Government, inflation would also change and pensioners under the Hoverspeed scheme could find themselves short-changed.
At no time during the proceedings were the trustees of the fund properly consulted. I share the view expressed by my hon. Friend the Member for Brighton, Kemptown
(Sir A. Bowden) that those involved in taking the decision to have a contribution holiday clearly had an active vested interest in the company, not least in their own job and promotion prospects, and were not likely to act necessarily in promotion of the best interests of the existing pensioners, of whom Ken Hilditch is only one of many.
Mr. Frank Field (Birkenhead):
I was not going to speak in this debate, but I wish to support the hon. Member for Brighton, Kemptown (Sir A. Bowden) on the basis of the contribution by the hon. Member for Bristol, North-West (Mr. Stern). When I opened my post to find a letter from the hon. Gentleman asking me to sign his early-day motion--or, rather, a letter in support of the early-day motion--I was foolish enough, like 150 other hon. Members, to sign. I thought that we should sign it because the hon. Member for Bristol, North-West meant business. I now learn that, when push came to shove, the Whip moved up the Gangway quickly and the hon. Gentleman gave in easily.
Mr. Stern:
The hon. Gentleman accuses me of giving in to a Whip. He first suggested, and then withdrew the suggestion, that I had written to him, which I had not, and he then suggested that I put forward an idea for an early-day motion that I never put forward in the first place.
Mr. Field:
I merely suggested that the hon. Gentleman stood up proudly tonight--giving us a good example of self-hanging--and drew the attention of the House to the fact that he helped to devise the early-day motion. I thought that we were supposed to devise early-day motions to put on the Order Paper, but we learned something different tonight.
People wrote to Members of Parliament asking us to support the early-day motion that the hon. Gentleman helped others to compose. Presumably we sign early-day motions because we want to influence policy. It was crunch time tonight: the hon. Member for Kemptown made a clear case for sectional interests to be represented on pension funds. The answer from the Treasury Bench is, "You don't have to worry: people will talk about these things and it will be fine."
Pensioner interests will not be represented effectively on pension funds. The point raised by my hon. Friend the Member for Burnley (Mr. Pike) could not be answered, and I am sure that the hon. Member for North Thanet (Mr. Gale) will not receive satisfaction from the Treasury Bench that his constituent's interests will be represented. Those points underscore the claim of the hon. Member for Kemptown.
Mr. Paddy Tipping (Sherwood):
The Minister presented another scenario: pensioners could take pension funds to court because of a lack of fiduciary duty. That is a non-starter.
Mr. Field:
It certainly is, given the costs. The case has been made that, according to democratic traditions in this
We know that all trustees have an overriding commitment to the welfare of a fund and its members. We know also that, although one tries to meet that objective, one's background affects what one says and how one applies one's intellect to a particular decision. As most of the members of many funds are retired, it seems absurd that we are not trying to use our influence to ensure that they are fully represented. For those reasons, I hope that the House will reject the statutory instruments on which we shall vote later.
| Next Section
| Index | Home Page |