Pension Schemes
Allan Dorans Excerpts(5 days, 13 hours ago)
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Allan Dorans (Ayr, Carrick and Cumnock) (SNP)
I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) and the Chair of the Work and Pensions Committee, the right hon. Member for East Ham (Sir Stephen Timms), for their work in bringing this important matter to the House.
The right hon. Member for Orkney and Shetland mentioned pension schemes including those of Shell and BP, but I want to focus on the Hewlett Packard Enterprise pension scheme, and a decision that directly affects more than 1,500 people living in my constituency and in neighbouring constituencies. I speak on behalf of my constituent Patricia Kennedy, as well as 9,625 members of the Hewlett Packard Enterprise UK pension scheme, which includes more than 4,000 members of the Hewlett Packard Pension Association. These are people with an average of 20 years’ loyal service, the bulk of it pre-1997. They were promised a good pension. They expected a “fair deal” from a world-leading corporation that they helped to build, but now find themselves left with a “raw deal”. In general, their pensions now have less than 70% of the expected buying power.
In 1977, Digital Equipment Corporation of Massachusetts opened a factory in Ayr. The company, known locally as Digital, was a major boost to the local economy, and, indeed, apart from the Government, was one of the largest employers in Scotland, with a major production facility on the outskirts of Ayr. At the time, the Digital pension scheme was regarded as one of the best in the United Kingdom. Annual increases were discretionary, but pensions more than kept pace with the best available.
In 1998 Digital Equipment merged with Compaq, and in 2001 that organisation, in turn, merged with Hewlett Packard. In 2017 Hewlett Packard split, and Hewlett Packard Enterprise took over responsibility for the Digital pension scheme. Employees of Digital, Compaq and Hewlett Packard joined and paid into the pension scheme in the reasonable expectation that future pension benefits, which would have provided them with a reasonable pension on retirement, would continue to increase in line with the cost of living. Sadly, however, that has not happened. Since Hewlett Packard Enterprise took over the pension scheme there have been only three discretionary increases, of 1% in 2004, 1% in 2008, and 3% in 2022.
Hewlett Packard Enterprise, while presenting itself to its customers and investors as the most ethical company in the world, is taking advantage of the weakness in the UK pension legislation relating to pre-1997 service. That has resulted in a “raw deal” average pension of £9,700, which, even when topped up with the maximum state pension, results in “low income living” as defined by the Government. Regardless of its legality, this practice is heartless, immoral and unethical, and it is absolutely unacceptable from a major global corporation.
By contrast, Hewlett Packard Enterprise has had an global annual net revenue—a profit—of between $50 billion and $120 billion since 2002, totalling around $1.5 trillion. In 2023, Hewlett Packard’s chief executive was paid $1.3 million, a bonus of almost $2 million and $15.7 million in stock options. Shareholders got $1 billion in dividends that year.
If other, far less profitable companies can pay increases to their pensioners, surely Hewlett Packard can as well. We might ask why it does not. The answer is simply that it does not have to. In fact, it does not even have to explain how it comes to the decision that it makes each year. The decision-making process, what factors are considered and how pensioners’ needs are represented all lack transparency, and there is nothing that compels the company to change that. It has made its point for years, and there is a deadlock.
I am a realist. Although I call on the UK Government to put pressure on a US-headquartered corporation, that is unlikely to break the deadlock. However, there is a way forward. On Wednesday 18 October 2023, David Carson, a representative of the Hewlett Packard Pension Association, gave oral evidence to the Work and Pensions Committee on the defined benefits pension schemes inquiry, as was mentioned by the Chair of the Committee. The Hewlett Packard Pension Association also made three written submissions, which feature in the Committee’s final report. The Committee mentioned these oral and written submissions in paragraph 83 of the report, and paragraph 9 of the conclusions. It commented:
“Some pension scheme members are dependent on discretionary increases to ensure their pension payments keep up with the cost of living. Where these have not been awarded the effect has been, over time, to erode their standard of living. This can be particularly the case for those with rights built up before April 1997, when there was no general requirement to index-link pensions in payment.”
The Pensions Regulator should undertake research to find out: how many schemes have provision for discretionary increases on pre-1997 benefits included in their rules; whether the discretion is for the trustees, sponsoring employers or both; the number of years in which schemes have paid discretionary increases on pre-1997 rights; and the number of years in which they have not done so, as well as the reasons for that. As a matter of urgency, I strongly encourage the Pensions Minister, the Government and the Pensions Regulator to complete the research, which I believe will make it undeniably clear that an ethical code of conduct is required to ensure collaboration between companies and trustees on developing policy and strategy for pre-1997 discretionary increases.
Clarification is also needed from the Government on section 221A of the Pensions Act 2004. That section was inserted by paragraph (2) of schedule 10 to the Pension Schemes Act 2021, which states:
“The trustees or managers must determine, and from time to time review and if necessary revise, a strategy for ensuring that pensions and other benefits under the scheme can be provided over the longer term.”
That could be central to breaking the deadlock. If discretionary increases are viewed in the same way as other benefits in a pension scheme, it follows that companies and trustees must work together to devise a strategy for ensuring that pensions and other benefits under a scheme can be provided over the longer term.
We also need the research to be done by the DWP and the Pensions Regulator, a code of ethical conduct to be developed, and clarification from the Government that the intent of the Pension Schemes Act 2021 is that companies and trustees must work together to devise a strategy for ensuring that pensions and other benefits under a scheme, which include discretionary increases, can be provided over the longer term. I appreciate that the Minister may not be able to provide clarification on these matters today, but I would be grateful for a written response in due course.
Finally, although this debate focuses on private pensions, no debate on pensions would be complete without mentioning the greatest ever pension injustice—the 3.8 million WASPI women, including 6,800 in my constituency, who were not informed by successive Governments of changes to the age at which the state pension would be payable. The Government have ignored the plight of these women for nine years.
The Government hoped that the WASPI women would go away, but they have not, although 40,000 are unfortunately dying each year without getting any form of compensation. Some 240,000 have already tragically passed away, including my constituents Margaret Meikle and Morag Syne. The Government must urgently support and progress the private Member’s Bill tabled by my constituency neighbour, my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown). The Bill had its First Reading earlier this year, and it would require the Secretary of State to publish proposals for a compensation scheme for women born between 6 April 1950 and 5 April 1960 inclusive who have been adversely affected by the increase to the state pension age.
Women’s State Pension Age
Allan Dorans Excerpts(1 month, 1 week ago)
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Mel Stride
The right hon. Gentleman refers to one part of the report’s findings, where the ombudsman found maladministration but did not find injustice. The point that I have made to others in the House is that we need to look at this report properly. It is a report of 100 pages, to which my Department provided 1,000 pages of evidence, and which we received on Thursday. The only thing I can do responsibly is come to the House and make it clear that we will act without undue delay and interact with Parliament in an appropriate manner, exactly as we did with the ombudsman.
Allan Dorans (Ayr, Carrick and Cumnock) (SNP)
Incredibly sadly, Margaret Meikle and Morag Syne are just two of a significant number of women in my constituency and elsewhere who have died while enduring years of prevarication and inaction by successive Governments in relation to the maladministration of their pensions. It is estimated that 40,000 women have died each year who may have been eligible for compensation. Nationally, 270,000 women have died without ever receiving an apology, justice or compensation. Will the Secretary of State commit to giving due consideration to compensating not only eligible women still living, but the relatives of those who have died while awaiting justice, when this comes back to the House?
Mel Stride
I listened to the hon. Gentleman extremely carefully, and I think we owe it to all those to whom he referred and those who may be in a similar situation to take this matter extremely seriously. We will look at it very carefully, and we will come to appropriate conclusions while ensuring that we interact with Parliament in an appropriate way, very much as we did in our interactions with the ombudsman.
Universal Credit and Working Tax Credits
Allan Dorans Excerpts(2 years, 7 months ago)
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Allan Dorans (Ayr, Carrick and Cumnock) (SNP)
The points that I was going to make have already been made eloquently by other Members on these Benches, so I will make my remarks very brief.
I draw attention to the adverse effect on people who are disproportionately affected by this, particularly the WASPI women, who have already been robbed of their pensions. I also suggest that this is an opportune time for the Secretary of State to consider introducing a universal basic income.
The hon. Member for Don Valley (Nick Fletcher) asked how retaining the £20 could be paid for. I would say to him that we could get rid of Trident and HS2, neither of which Scotland wants or benefits from. It is disgusting that the six Scottish Conservative MPs are absent from the debate today. That shows a total disregard for the views of their constituents. The only way to ensure justice for the people of Scotland is for it to be independent and to have full control over the levers of the economy. This is the opportunity for Scotland to be independent.
Oral Answers to Questions
Allan Dorans Excerpts(2 years, 11 months ago)
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Hannah Bardell (Livingston) (SNP)
Allan Dorans (Ayr, Carrick and Cumnock) (SNP)
The Parliamentary Under-Secretary of State for Work and Pensions (Will Quince)
Since the start of the pandemic, the Government’s priority has been to protect lives and people’s livelihoods. In March, the Government announced that we were extending the temporary £20-a-week increase in universal credit for a further six months. It is right that the Government should now shift our focus to supporting people back into work, and we have a comprehensive plan for jobs to help us to achieve this.
Allan Dorans
The Trussell Trust reports that hunger in the United Kingdom is not about access to food, but about low incomes from the social security safety net, revealing that 95% of people referred to food banks in early 2020 were living in destitution, with just £248 a month on average to survive on after housing costs. Does the Minister recognise that removing the £20 uplift to universal credit later this year will only push more families into hardship and deprivation across the United Kingdom?
Will Quince
No one in this House wants to see anyone in this country reliant on a food bank, and the Secretary of State and I are working across Government to identify and tackle the root causes of food insecurity and poverty. In the meantime, we continue to spend over £100 billion a year on benefits for working-age people, and during the pandemic we have pumped an additional £7.4 billion into our welfare system to support those facing the most financial disruption. But I hope the hon. Gentleman will agree that it is right that we now shift our focus to supporting people back into work, because all evidence suggests that work is the best route out of poverty, and we have a comprehensive plan to do this via our £30 billion plan for jobs.
Income Tax (Charge)
Allan Dorans Excerpts(3 years, 2 months ago)
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Allan Dorans (Ayr, Carrick and Cumnock) (SNP) [V]
The Chancellor’s Budget is one of missed opportunities. In his speech yesterday, he made no mention of increases for public sector workers who have made such sacrifices and paid such heavy costs to protect us all in this time of crisis. The Chancellor also missed the opportunity to recognise and reward those on the frontline of the pandemic who have given so much. I am referring to the NHS staff and emergency or blue light services who have kept us safe.
I will illustrate the dangers and difficulties with just one example from the police service, but similar examples can be found across the NHS and all of the emergency services. At the peak of the pandemic, one in three police officers in England and Wales reported that they had been threatened by someone they believed had covid who said they would breathe or cough on them. Almost a quarter reported that a member of the public had attempted to do so. The very least that the Chancellor could have done, even as a token gesture on behalf of the public, was to recognise their dedication, professionalism and courage by matching the Scottish Government payment of £500 to NHS workers and extending it to include all emergency workers.
While I welcome the new measures of support for up to 600,000 self-employed people, the Chancellor missed the opportunity to include the 2.4 million people who have been and continue to be excluded from any Government support. I also welcome the provision of £40 million for the care and support of those affected by thalidomide, but the Chancellor missed the opportunity to support families affected by the less well known, but equally damaging drug Primodos, which over a number of decades has caused a range of devastating birth defects in thousands of children, leaving them with serious deformities and disabilities, including missing limbs, cleft palates, brain damage and damage to internal organs. At this point, I take a moment to pay tribute to Mrs Marie Lyon, who has worked tirelessly and led the campaign for justice for those tragically affected by Primodos for more than 40 years.
The Chancellor also missed the opportunity to significantly reduce poverty among older women and to right a significant Government injustice with the plight of the 3.8 million WASPI women—Women Against State Pension Inequality—including 6,800 in my constituency of Ayr, Carrick and Cumnock. They have seen a loss of up to six years of their state pension entitlement without proper notice or time to make alternative arrangements.
On behalf of those women, I ask the Chancellor to consider two issues that would at least help some of those affected by this state-inflicted injustice. The Chancellor should give WASPI women early access to pension credit and give those due to reach state pension age this year early access to their pensions. That would not by any means resolve the issue, but would go some way to redressing the cruel injustice suffered by these women.
In conclusion, the Chancellor has the option to review these missed opportunities and transform them into positive outcomes that recognise the contribution of the NHS and the emergency services during the pandemic and address the lack of support for significant sections of our communities, and I urge him to do so.
Oral Answers to Questions
Allan Dorans Excerpts(3 years, 5 months ago)
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Patricia Gibson (North Ayrshire and Arran) (SNP)
Allan Dorans (Ayr, Carrick and Cumnock) (SNP)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
The further funding for our plan for jobs—particularly the £2.9 billion for the restart programme that is focusing on those at risk of long-term unemployment —as well as ongoing support for our other schemes and work coaches shows our focus on helping people to get back into work. Through Barnett consequentials, £36 million of funding will be available for equivalent measures in Scotland next year. Other elements, such as the record increase in defence spending and the 10-point plan for a green industrial revolution, will help to create new jobs that will positively impact Scotland and the wider UK.
Dr Coffey
The hon. Lady will be aware that the temporary extension of the £20 universal credit uplift was made in line with the fiscal measures made earlier this year. With regard to the benefit uprating, I put that through as that is the normal process that we go through, but, as has been indicated, we will continue to look at this matter again in the new year.
Allan Dorans [V]
For the last eight months, around 2 million disabled people and others on legacy benefits have been discriminated against through being excluded from the £20 uplift granted to those receiving universal credit. The Chancellor’s failure to extend the £20 uplift to them is another humiliating insult to the most disadvantaged and vulnerable in our society, and only granting them an additional 37p a week from next April is nothing short of abhorrent. Does the Secretary of State think it is acceptable that people on legacy benefits are now facing a second year without sufficient financial support from this Government?
Dr Coffey
Last year we actually increased benefits by inflation, and we have made sure that that has happened again so that there are no cuts in that regard. I am keen to continue to do what we can to encourage people to move across to universal credit. There is only one group of claimants who are effectively barred from doing that, and that will change in January next year. I genuinely want to put across how important it is; by using things such as Help to Claim and getting support directly, people can often see that they will be considerably better off under universal credit.