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13 Jan 2010 : Column 307WH—continued
Angela Eagle: My hon. Friend has made his point in his characteristically laser-like manner. I am sure that IBM will be looking at what he said. However, the company meets the balance of cost in the defined benefits scheme and there is nothing to suggest that it takes it below a requirement or minimum that pension law would require. I put that on the record. Flexibility in respect of that does not take it into territory that puts it on the wrong side of regulation or the law, as the regulator has pointed out.
Ms Katy Clark: My constituents do not believe that it would be possible to make changes of this nature in other parts of Europe. Has my hon. Friend looked into that? Does British pensions law give the same protections as in other parts of Europe? If not, is she willing to look at that?
Angela Eagle: It is difficult. I am always willing to try to learn from the systems and approaches to industrial relations, pensions law, welfare or any other area in other countries. The more we all do that, the more we have to learn from each other. However, in the pensions area it is quite distinct: Britain is unusual because such a large proportion of its work force have accrued rights in defined benefits schemes, compared with other European countries. That usually leads people down some peculiar and not very accurate paths, generalising about European issues and then trying to bring the discussion back to a different circumstance, with additional pensions, in this country. I am not saying no, but it is often not easy to compare, and people are not comparing like for like when they do that.
Sir Peter Viggers (Gosport) (Con): One thing this Government have done is greatly to increase the responsibilities of trustees, one of which is to ensure fairness between the different members of the pension scheme. Will the Minister join me in encouraging the trustees to think carefully about their responsibilities in this field?
Angela Eagle: Again, I am more than happy to endorse the observations that the hon. Gentleman has made about the duties, fiduciary and other, of trustees, who have a great responsibility in respect of defined benefit pensions law that can sometimes be quite complex. I note the current plans of the trustees in this pension scheme to check some of these issues by going to the courts. Obviously, they have to do their duty as expected and laid down in law to protect the best interests of the people who benefit from their pension scheme-their members-and they must consider how fairness goes across the system. We have legacy defined benefit schemes here that other employees are involved in, which were particularly generous but have become less generous as time has gone on. How one would balance fairness across those schemes is a moot point in terms of access to rights.
The Government can guarantee, as they have done in law, accrued rights: those rights that have already been paid for and have been gathered up by individual employees with the contributions that they have made over the years. It is a lot harder to get ourselves into a circumstance where companies cannot redesign in any way pension schemes that have been set up for many years. As Pensions Minister, I have to ensure that the law tries to
make the right balance between defending those rights that have already accrued, which is an absolute certainty in law passed by Parliament, but also getting to a circumstance where the law is flexible enough to allow flexibilities both for employees and employers, because we are not talking about the provision of pensions in defined benefit final salary schemes, which are not compulsory in this country. The provision of a defined benefit scheme is voluntary and it is for employers to decide whether they wish to offer them. I am acutely aware, when looking at any potential policy changes that I might wish to bring to Parliament to discuss, that I have to think about what effect those would have on the willingness of employers out there to continue to provide defined benefit schemes.
Stephen Pound: Further to the point raised by the hon. Member for Gosport (Sir Peter Viggers) about the trustees, my constituents, Nick Hodgson and Helen Sparling, tell me that after the 2006 changes the subsequent changes that IBM made were not agreed by the trustees. Is my hon. Friend prepared at least to look into that, as it seems to be a fertile area for further examination? If these current changes were not approved by the trustees, what is their role in this matter?
Angela Eagle: If my hon. Friend has any information of that kind he should certainly put it before the regulator. The regulator has been written to by several hon. Members of this House and members of the IBM scheme and has had a look, but has, so far, found nothing illegal or which would fall foul of current regulations about the way that IBM have technically dealt with the scheme. If my hon. Friend has further evidence of that sort, I suggest that he sends it to the regulator.
I want to deal with the Government's legislating, perhaps, to stop sudden changes, which the hon. Member for Romsey mentioned. I do not believe that sudden changes in pension funds are ever particularly desirable. We have legislation in place requiring employers to consult for at least 60 days before they bring changes into being, but we have to keep a balance in the law and not put employers off offering defined benefit schemes at all by making the way that the regulations work too inflexible.
There are still 2.6 million people in the private sector accruing rights in defined benefit schemes. I am acutely aware that we have to put in place a structure of law that enables us to try to assist both employers who wish to offer such schemes and employees who benefit greatly from them, and that they continue to do so. Again, there is a balance to be struck, but there is a requirement to consult and I understand that IBM has done that.
I understand-perhaps hon. Members who know more will correct me if I am wrong-that IBM has extended the time by which it was going to introduce these changes from April 2010 to April 2011. That is what a local trade union representative told me when I had a word with him.
It is important that the IBM board looks at our debate today and that it takes due notice of the surprise, worry and anger that have been expressed. I have a great deal of sympathy with those feelings, which have been well reflected in the debate, and I hope that IBM will take note of them.
5.19 pm
Sitting adjourned without Question put (Standing Order No. 10(11)).
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