Pension Schemes Bill

Al Pinkerton Excerpts

Wednesday 3rd December 2025 Commons Chamber

[Torsten Bell]

My hon. Friend has been a powerful campaigner on this issue in the run-up to the Budget, and he brings me on to my next point. We are not just listening; we are acting. We have tabled new clauses 31 to 33 and Government amendment 87 to introduce prospective indexation of Pension Protection Fund and financial assistance scheme payments that relate to pensions built up before 6 April 1997. And directly to his question, these will be consumer prices index linked, capped at 2.5% and apply to members whose former schemes provided for such increases. I thank the Pension Protection Fund for its support on this measure and its implementation, which rests with the PPF.

[Dr Al Pinkerton (Surrey Heath) (LD)]

I have been contacted by many Surrey Heath constituents who often worked for very large American companies such as Atos. These companies are refusing to offer the pre-1997 uplift, and from what I understand, the pensions fall outside both the PPF and the FAS. Can the Minister offer any reassurance to those pensioners today and explain how they can continue to survive on such diminishing returns from the pensions they paid into?

[Torsten Bell]

The hon. Gentleman asks an important question, and I shall come to exactly that issue when I finish discussing the changes within the PPF, because as he rightly notes there are wider indexation questions for solvent pension schemes.

On the PPF itself, this issue has been long running and many campaigners have long campaigned on it. Our changes aim to bring the matter to a conclusion. It is a step change that will make a meaningful difference to over 250,000 members. Over five years, the average PPF compensation will be boosted by £400 a year. Of course, I recognise that this does not go as far as some affected members would have wanted, but this change is real progress and rightly balances the interests of eligible members, levy payers, taxpayers and the Pension Protection Fund’s ability to manage future risk. I hope all hon. Members will support this step forward, and on that basis, that those with related amendments will feel content not to press them today.

New clauses 22 and 24 and amendment 19 concern that issue of discretionary increases or pre-1997 indexation in solvent defined-benefit pension schemes more generally. I put on record that we all recognise the impact of the high inflation in recent years on the value of some pensioners’ retirement income in exactly the way that has just been set out.

I want to be straightforward with the House that we do not support retrospectively changing scheme rules. Neither did previous Conservative or Liberal Democrat Governments, given that contribution levels were set on the basis of the scheme rules at the time they applied. As I have said before, and as I discussed recently with my hon. Friends the Members for Llanelli (Dame Nia Griffith) and for Ayr, Carrick and Cumnock (Elaine Stewart), wider changes in the Pension Schemes Bill relating to surplus release will put trustees in the lead in a way that will help on this issue.

--- Later in debate ---

[Dame Nia Griffith]

Indeed. I thank my hon. Friend for mentioning Patricia Kennedy, who has been incredibly hard-working and has really tried to put the facts and figures together.

Let me give the House an example now that I had intended to quote later. The number of companies that have reneged on giving out index-linked pensions is extraordinary. Listen to this list, citing the number of years for which companies have not indexed pensions: Goldman Sachs—10 years; KPMG—15 years; Lloyd’s Register—nine years; Johnson & Johnson—11 years; NCR (Scotland)—11 years; Chevron—13 years, 3M—16 years; Pfizer—16 years; AIG—18 years; American Express—20 years, Atos/Sema—20 years; STMicroelectronics—21 years; Hewlett Packard Enterprise—22 years; and Wood Group—23 years. Given that, we can imagine the loss in value of those pensions now.

[Dr Pinkerton]

The hon. Lady mentioned Atos. I have several constituents who worked for that company who find themselves in precisely the situation she describes. I thank her for the speech she is making and, on behalf of my constituents, I hope that those on the Front Bench are listening to her suggestions.

[Dame Nia Griffith]

As I said, it is an important principle on the PPF; if we are doing it for those pensioners for the companies that have gone bust, we really should be doing it for the successful companies, too.