BHS — House of Commons, 2016-10-20
Topic: Macroeconomics
Ian Blackford (Scottish National Party, Centre-left): It is a privilege to speak in the debate. I thank the Committees for the report and the right hon. Member for Birkenhead (Frank Field) for securing this important debate The issue of quantitative easing has come up, and I have to say that the powers of analysis of the hon. Member for Gloucester (Richard Graham) have somewhat deserted him today. He cannot get away from the fact that having had a quantitative easing programme of £435 billion, there is no underlying investment in the real economy. The only conclusion we can logically draw is that business does not have confidence in the economy, and that is why the interrelationship between fiscal and monetary policy is important. We need to get back to a balanced scenario in which interest rates reflect a normal economy. That is what the Government have to take responsibility for and that is what the hon. Gentleman seems to ignore The UK Government need to see the work of the Select Committees and the outcome of the debate as a lesson, and to acknowledge that we need to take action now that protects us all from outcomes that we have seen with BHS. The BHS pension scheme, representing 20,000 past and present workers, is in deficit by perhaps more than £500 million, meaning that scheme members face reduced entitlements. That is what should be at the heart of this matter. The reduced pensions of the workers and all those who lost their job should be what concerns us today. Why should pensioners be put at risk and fail to be protected from what is now fully acknowledged as corporate greed? As legislators, we all have to look at ourselves and ask what we could have done differently to have ensured that this situation did not arise in the first place This issue highlights the fundamental need to address the regulation of the pensions industry. Approximately 11 million people rely on a final salary pension scheme run by a private sector company. Schemes have come under increasing pressure as funding has become stretched, with about 5,000 private sector defined-benefit schemes now in deficit to the tune of more than £900 billion, according to Hymans Robertson. Despite the view that the hon. Member for Gloucester takes, we cannot escape the impact of quantitative easing and the lack of a balanced response from the Government. It defies logic not to have that As I highlighted on Second Reading of the Savings (Government Contributions) Bill, the previous Secretary of State for Work and Pensions, the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), said in this House: "there is a very real systemic issue with DB pension schemes that we need to look at, and my Department will be discussing it further in the months ahead."—[Official Report, 11 July 2016; Vol. 613, c. 10.] Since that statement, despite questions from the SNP, there has been silence from the UK Government. Where is the response to the fundamental challenges facing pensions today and what some might argue is a crisis for defined-benefit schemes? When will the Government face up to the challenges and threats to many who are beneficiaries of those schemes? When will the Government respond in detail to what the former Work and Pensions Secretary said was "systemic risk"? That was no throwaway line; a senior Cabinet Minister was admitting what we know to be the case. Does the Minister agree with that assessment given to this House and will she address the point this afternoon? What are the Government doing to deal with their own analysis of systemic risk? Sadly, I suspect the answer is still nothing Nothing is being done. The Government have been caught like a rabbit in the headlights—caught doing nothing in the face of systemic risk that threatens the interests of pensioners up and down the country. In the light of the Government sitting on their hands, I welcome the recently announced Select Committee inquiry to examine the adequacy of the Pension Regulator’s powers. That must be welcomed, but why should we be reliant on the Work and Pensions Committee? Why are the Government not doing their job and addressing this issue Scottish National party MPs will work to strengthen the powers of the regulator to ensure that the Philip Greens of the world are dealt with effectively when they seek to avoid their pension responsibilities. It is, however, a duty of government to protect citizens from undue pensions risk and the systemic risk to which the Secretary of State referred. Ultimately, defined-benefit pension schemes need to be placed on a sustainable footing and employees must be protected. I look forward to seeing whether the Minister responds to this when she makes her speech, but perhaps I should not hold my breath. More likely, she will have a Government briefing of handwringing, and then she will wait for the debate to end and scurry for cover. After all, we do not expect real answers from this Government Brexit means that pension disasters such as BHS and Tata Steel will be much more likely challenges for UK companies. Only when companies are able to afford to keep their promises to employees can pension funds be regarded as safe. Even large and successful companies can fail. The Pension Protection Fund offers help in such cases, but Cass Business School forecasts that up to 1,000 pension schemes could end up in the PPF over the next few years. There are more BHS disasters to come if that is correct. There will be a combined deficit of £45 billion, which would be overwhelming Let us try to take this out of politics. The SNP has long called for the establishment of an independent pensions commission to ensure that employees’ savings are protected and a more progressive approach to fairer savings is considered as we move to a period in which defined-benefit schemes are becoming a thing of the past. Why will the Government not do that? Why do we not establish a pensions commission that can consider all these issues in a holistic manner Let us come back to BHS—[Hon. Members: "Yes."] Well, of course Government Members do not want to talk about the Government’s responsibilities, because they have run away from them. They can scoff and laugh, but 20,000 pensioners at BHS are going to suffer and thousands of people have lost their job while the Government looked on from the sidelines. That is the reality of this Tory Government Let us come back to BHS, perhaps this time without the laughter from the Government Members. I hope the BHS workers are watching the response of Government Back Benchers. How disgraceful; how contemptuous of people in this country!