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Mr. Smith: I hear my hon. Friend's pleas, as I have those of other hon. Members. As I have said, I feel for the workers who are affected. Equally, I am sure that my hon. Friend will accept that it would be wrong for me to raise false hopesbut I will engage constructively with sensible suggestions.
Adam Price (East Carmarthen and Dinefwr): As the Government looked into the idea of a pensions insurance system four times and, by the Secretary of State's own admission, in rejecting it on those occasions they got the decision wrong, do they not have a moral responsibility to those at ASW, Blyth and Blyth and other companies? I urge the Secretary of State to look at the experience of the US Pension Benefit Guaranty Corporation, which we are led to believe is the template for his proposal. When it was established in 1974, it brought more than 200 companies retrospectively under its provisions. Surely natural justice dictates that rights promised be rights that are also delivered for the workers who have inspired the Government to change their policy.
Mr. Smith: As I said, the legislation has yet to come forward. The insurance fund is yet to be established. Therefore I cannot give the undertaking that the hon. Gentleman is seeking, but I listen carefully to the points that he makes, and will reflect on them.
Mr. Terry Rooney (Bradford, North): My right hon. Friend will have cheered millions of people with his announcement, but can he look into the role of the managing trustees and how quickly they bring about the winding-up of insolvency schemes? The money that they take out of schemes is a scandal. Can he consider the way in which European directive 80/987 was put into legislation, because many of today's problems would not exist if the previous Government had met their responsibilities under that directive?
Mr. Peter Viggers (Gosport): We have all been shocked by the losses that have been incurred by some individuals and it is right that the Government should deal with the issue, but does the Secretary of State agree that all he has done today is attempt to set out a portfolio for sharing the grief more widely and perhaps more fairly, and to introduce some more regulation? He has done nothing to diminish the size of the crisis over which the Government have presided.
Mr. Smith: I do not accept that, because I believe that our proposals on the protection fund, on wind-up, on TUPE and the other simplification measures will increase security. I believe that that will rebuild confidence in the system and offer the protection that people desperately want. As I have told hon. Members, the thorough analysis is aimed at reducing costs where those can be reduced, so that the overall impact on business will be to reduce costs. At worst, there will be a neutral impact.
Kali Mountford (Colne Valley): I congratulate my right hon. Friend on his statement, but can he tell the House more about his plans for the pension regulator? If funds are to be properly managed and not to be misappropriated, thereby avoiding insolvencies, do we not need to know more about the range and depth of the regulator's powers? If my right hon. Friend has not yet considered including pension liberation schemes under the purview of the regulator, can he consider doing so, so that people are not ripped off by those scandalous schemes?
Mr. Smith: I thank my hon. Friend for her welcome. We envisage a much more proactive pensions regulator. The existing regulatory body was given a job under the legislation and has done it well, but with the benefit of experience, it is clear that it has had to be rather too much of a process-driven, check-box regulator. It has not been able to get proactively involved in cases of maladministration, fraud and incompetence. We want the regulator to be much more active, as my hon. Friend advocates. I will consider the points that she makes about pension liberation.
Dr. Vincent Cable (Twickenham): I warmly welcome the proposals on solvent wind-ups. How would that work where the solvent profitable company is a foreign corporation and the British workers are in a separate legal entity? That has been the case with rogue American companies such Parsons Engineering, EMC Corporation in south-west London, and the former Lufthansa subsidiary GlobeGround, which have effectively stolen a substantial part of their employees' pensions, and also charged them the cost of the wind-up. Employees would have no comeback. In those cases and
Mr. Smith: The best laid plans need to be proofed against abuse by those who ingeniously engineer things fraudulently to avoid their responsibilities. We will lookwe will have teams of high-powered lawyers to lookat how we can best safeguard against precisely the situation that the hon. Gentleman describes. I make it clear that foreign-owned companies will not be allowed to escape their obligations in that way, and we will put measures in place to ensure that those responsibilities are met.
David Winnick (Walsall, North): Is the position not well illustrated by the case, which I raised at Question Time on Monday, of my constituent who at 57 has lost all his pension rights, as have other employees at the company that has closed in Wolverhampton? Is that not a disgraceful position? Do not people such as my constituent face a totally uncertain future? Will my right hon. Friend therefore think again about whether the position of those who have already lost out, too, should be seriously considered, as many Labour Members have pressed him to do? I trust that he will do precisely that.
Mr. Smith: I share the concerns of my hon. Friend and other hon. Members who have raised pressing and distressing constituency cases, and I have to give him the same answer. I will listen to and meet hon. Members and look at sensible and constructive suggestions, but I am not raising false hopes.
Mr. David Cameron (Witney): Will the review of the wind-up of insolvent companies look at the casesthis comes out of a constituency casein which companies manage to declare the business insolvent but still profit from the sale of the land by separating the ownership of the two? Does the Secretary of State agree that in such cases the members of the pension fund understandably feel very let down?
Mr. Chris Pond (Gravesham): I warmly welcome my right hon. Friend's statement, particularly the extension of TUPE protection to pension rights. He will be aware that many people feel anxious that they may lose their pension entitlements not only when their firm goes under but when it is taken over. May I ask for an assurance that one element of his proposalsthe reduction in compulsory indexationwill not be retrospective, and that that will not affect existing pensioners or the rights already built up in pension funds?
Mr. Smith: I thank my hon. Friend for his welcome for the TUPE proposals. I share his enthusiasm for ensuring that protection is extended to people who are presently very worried about their position. The 6 per cent. match is a fair and reasonable way of settling an issue that our constituents have long been worried about. As I said in my statement, the changes on
Mr. Speaker: Order. I am conscious that we are going into Opposition time, but there are only a few hon. Members standing. There should be only one question and if questions are brief, I will call all Members who are standing.
Mr. Henry Bellingham (North-West Norfolk): I am grateful to the Secretary of State for giving very short answers. He will be aware that many small firms will welcome at least part of this package, because they obviously want more portable, more flexible pensions for their employees. But how can he guarantee that the new pension protection fund will not turn out to be yet one more burden on businesses, and how will he protect very small businesses?
Mr. Smith: The premiums charged for the protection fund will be risk-related and therefore proportionate to the size and potential liabilities of the business. Our employers taskforce, the membership of which is listed in the document published today, is made up of a very experienced and good team of people, including representatives from small business. I have already asked them specifically to look at how we can better facilitate pension provision by small businesses.