That this House has considered pension transfers and the British Steel pension scheme.
For many of us, pensions are a distant, complex and opaque topic. Everyone hopes that their pension will provide financial security for their family’s future. It is often the single biggest pot of money that anyone will have, but that makes pension pots ideal targets for mis-selling. Unfortunately, in recent years pensions mis-selling has got worse. Since further pension freedoms were brought in four years ago, it is easier to transfer out of defined-benefit pension schemes. More than 200,000 people have done that, but as transfers have increased, so have the problems. The compensation paid out for poor transfer advice increased to £40 million last year.
I called for this debate because of a specific mis-selling crisis that affected hundreds and potentially thousands of people across south Wales in particular. Two years ago, the British Steel pension scheme began to restructure its fund after a difficult period for the industry. Scheme members had a hard deadline to make a critical decision: they could go into a new scheme, be defaulted into a lifeboat fund or transfer out. They had to decide against a backdrop of serious uncertainty about the scheme and the industry. The scheme’s administrators were under enormous pressure, with 4,000 calls a day. Vital information about pension advisers from the Financial Conduct Authority was often highly technical. All that helped to create a perfect storm.
I congratulate my hon. Friend on securing the debate and commend the work that he is doing in this area. He has mentioned the Financial Conduct Authority. Does he agree that one issue here is regulation and that too often those who suffer a loss are pushed in the direction of a civil remedy when actually we need stronger enforcement and tougher criminal sanctions?
I, too, congratulate the hon. Gentleman on initiating the debate. I do not have any people with steel pensions in my constituency, but I am here to support the hon. Gentleman and to do so on the record. He mentioned that 4,000-plus people a week were trying to get details and advice on how to move forward. Is not the onus on the FCA and, ultimately, the Government to ensure that the necessary advice is there and available? The volume of contacts being made clearly indicates that the system is unable to respond in the way it should.
The advice is there. The difficulty is that for many people it is too technical and complicated; working through it is really very hard.
Transfers were talked up, and pension sharks soon began circling around the key steelworking sites across south Wales and the rest of the UK. They were often facilitated by unregulated introducers, through word of mouth. For example, constituents of mine were approached by a rogue financial adviser at their caravan while they were on a family holiday. Wider possibilities were common currency: a place in the sun, a conservatory and a deposit for a son’s or daughter’s new home were all said to be within reach.
The pension changes meant that it was easier to transfer from a stable fund into investments that were far riskier, on the promise of better returns. Unfortunately, it meant that a safe bet could turn into a bad bet, and a high fee was often part of the deal too. It was the case that 7,800 steelworkers transferred out altogether, of whom 872 had transfers arranged by firms that were eventually ordered—ordered—to stop advising by the FCA. One steelworker lost £200,000. Many others lost tens of thousands of pounds. Many suffered incredible stress and anxiety. I heard yesterday that £1.8 million has been paid out in compensation to steelworkers so far. I emphasise the words “so far”. Because that might not grasp the full scale of the issue, the FCA has now reviewed the files of 2% of the nearly 8,000 steelworkers who transferred out. It found that 58% of the advice was not suitable, which means that the tally of those who lost out could run to several thousands. To deal with that possibility, the FCA now needs to set out a clear programme of how it will identify the steelworkers affected, how it will let them know and what practical support it will provide to help to get them through this process.
I pay tribute to my hon. Friend for securing this debate and leading on this issue, as he has now for several years. On how the FCA now informs steelworkers, does he agree that part of the problem is that lots of steelworkers will simply not know that this has happened and will not understand that they have received bad advice? Given that these are complicated issues, as he has mentioned, that means that they will often just ignore the issue in the hope that it will somehow resolve itself. This could be yet another pension scandal waiting to happen, purely because people do not wish to face up to the realities of what is happening.
My hon. Friend makes a really good point. The FCA is a large organisation based in London. I believe it does not have sufficient resources to help consumers on the ground in places such as Port Talbot or Shotton, or across the country, where pensioners need support at their homes.
The concerns that my hon. Friend has raised are valid in north Wales among steelworkers who used to work at the Shotton plant, many of whom live in my constituency. A cursory look at the FCA website reveals that there are 17 firms that the FCA is currently examining. I did not know that until I looked at the site in preparation for this debate. How are steelworkers supposed to know who those 17 firms are?
My right hon. Friend gets to the nub of the situation. Who does one trust when one has a pot of gold and people want access to it? He poses a really important question. The FCA has got to help our steelworker pensioners and their families.
It can be argued that this was a unique situation, but many of the underlying problems that allowed it to happen are still there. Rogue financial advisers do not face sufficiently tough consequences from the regulators. The FCA’s register has been improved, but consumer information sometimes remains unclear. The support for people who might have been mis-sold pensions is insufficient.
I recognise that some steps have been taken to improve co-ordination between regulators. That is welcome, but much more needs to be done. At the moment, the pension sharks have generally received administrative sanctions only, but I think they need to face serious penalties. Will the Minister scrutinise the effectiveness of the FCA’s enforcement regime? Steelworkers say the FCA needs to impose heavy financial penalties on bad financial advisers. I think it needs to employ its powers much more often, as it seems this has not been done sufficiently.
I congratulate my hon. Friend on securing this debate and pay tribute to him for his work for our constituents in this important area. At our recent meeting with the FCA, the issue of mandatory insurance wording came up. Those unscrupulous financial advisers are not taking out proper insurance—when they go bust, there is no source of compensation for the steelworkers who have been ripped off. Does my hon. Friend agree that the Minister needs to take urgent action to improve the regulatory framework, not least in the area of mandatory insurance wording?
My hon. Friend makes an important point. Given reports that the FCA is investigating so-called introducers in connection with a major scam, the Government should now ensure that they, too, are regulated. The Treasury has to take action to ensure that financial advisers always have—this comes to my hon. Friend’s point—sufficient insurance to pay out, should they go into administration.
Will the Minister ensure that the FCA updates the Treasury on how it is supporting the potentially several thousand steelworkers who might have received poor transfer advice in this instance? The Treasury needs to co-ordinate with the Department for Work and Pensions and other key bodies in order to help victims of mis-selling to access the support they need. Although BSPS members have been supported by a strong team in Port Talbot, including a financial adviser and a lawyer, there needs to be a single initiative, aimed specifically at people who may have been mis-sold in cases such as BSPS.
I am very grateful to my good friend for giving way and congratulate him on securing the debate and on the powerful case that he is making. In the consultation on the changes, concerns were raised that the burden could fall too heavily on scheme members, and we worry that that is the case. Our mining and steel communities built this nation. Does my hon. Friend agree that they should be looked after in retirement?
My hon. Friend is a champion for miners’ pensions, on which she has done some great work, and I think she is absolutely right.
I press the Minister on the Treasury’s response to recommendations that others have made about the crisis. The Rookes review suggested that the FCA needs to look at how it handles advisers who have had regulatory issues in the past. Phoenixing, as it is called, has allowed some advisers to reinvent themselves to sell anew. There must be greater scrutiny to stop rogues re-emerging in the marketplace. The review also suggested that the FCA work with the Treasury and the DWP to use digital channels to help to communicate important information to pensioners and to help them.
Finally, the review suggested that the Pensions Regulator work with BSPS, trustees and trade unions—Community and Unite have been particularly good in south Wales—to select a panel of reliable financial advisers that members can use. Those advisers must be able to deal with the scale of the problem with BSPS and with the insurance needed. Can the Minister explain how the Department is progressing those recommendations and when we can expect the changes to be fully implemented?
In his valedictory speech, Mark Neale, the outgoing chief executive of the Financial Services Compensation Scheme, strongly advocated increasing the compensation limit in cases of poor transfer advice. They were powerful remarks, so let us listen to him. I ask the Treasury to actively support that proposal and to investigate how many people are currently suffering uncompensated financial losses because of poor advice.
We need justice for steelworkers who are ripped off. If the FCA will not do that, local police forces in south Wales need to pursue what appear to be complicated cases of fraud. The crimes are committed locally; the losses are clear and often substantial; and those responsible are identifiable. I call on the police forces across south Wales to open files and thoroughly investigate whether those cases amount to fraud. Criminal investigations have to start. If they do not, I call on the forces to state publicly why not.
It is a pleasure to serve under your chairmanship, Mr Howarth. I pay tribute once again to my hon. Friend the Member for Blaenau Gwent (Nick Smith) for securing the debate and for all the work that he does. He and I have worked on the transfer of steelworker pensions out of BSPS since 2017, which was when all Tata Steel workers were forced to decide whether to move into the BSPS 2 or transfer out into another pension scheme. Given that trust between employees and employer at that point was fragile to say the least, it is not too surprising—completely understandable, in fact—that about 8,000 of the steelworkers decided against joining the BSPS 2. Little did they know that the vultures were circling.
The behaviour of the unscrupulous financial advisers who ripped off these men and their families was completely inexcusable. The sheer size of the pension transfer exercise, the high level of publicity that the transfer received, and the workers’ deep-seated mistrust of the employer at that time, the trustees and Tata made for fertile territory for the parasites. The trade unions, steel MPs and the BSPS trustees all called on the Government to introduce a system of deemed consent regarding the transfer of BSPS 2. I was one of those MPs; I sent a letter to the then Pensions Minister, the right hon. Member for South West Hertfordshire (Mr Gauke). However, we were ignored and those hard-working, honest men were targeted, despite the fact that in only a very small number of cases was transferring out their best option.
These unscrupulous advisers are not stupid; they have behaved in a manner that is cunning, morally bankrupt and in many cases criminal. These events have had a dreadful effect on steelworkers in my constituency and their families. One man transferred £560,000 out on the strength of a 40-minute phone call with an “adviser”, who convinced him that it was what everyone was doing —40 years of service reduced to 40 minutes on the telephone. He believes that he was charged £11,000 to transfer out and for a 40-minute consultation. A man’s entire life plan was ruined by one phone call. Another was advised by one of the local advisers to transfer £348,858 out. He is now paying in excess of £3,500 a year in various costs and charges, as well as exposing himself to the risk of shortfall and dying after his pension pot runs out. That adviser played on the fear that BSPS was going to go into administration. They did not present my constituent with the facts or evidence, but approached the situation from the starting point that he wanted to transfer out, and facilitated that transfer without checking that it was in his best interest to do so.
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Blaenau Gwent (Nick Smith) on securing this important debate. I should also declare that I have a steel plant in my own constituency, although it is not as badly affected as those in Port Talbot.
About 40,000 members of the British Steel pension scheme, the Tata Steel retirement fund, had the choice to trade their guaranteed pensions for a cash lump sum and transfer to a riskier plan as the scheme was restructured. To date, there have been about 8,000 transfers worth about £2.8 billion. Last year, as transfers from the British Steel scheme ramped up, the Financial Conduct Authority intervened to halt the activities of advice firms because of concerns that dubious advisers, incentivised by commissions and high fees, were descending on steel towns, especially Port Talbot in Wales, and enticing BSPS members to transfer their pensions.
It is extremely alarming that we now know the role advisers played in persuading steel workers to move their savings into riskier schemes. To call them cowboys would be an insult to cowboys. Financial advisers persuaded hundreds of steelworkers to give up their guaranteed pensions before the FCA halted their activity, concerned that it was mis-selling. The Work and Pensions Committee report into the BSPS described how:
“Many BSPS members were shamelessly bamboozled into signing up to ongoing adviser fees and unsuitable funds characterised by high investment risk, high management charges and punitive exit fees.”
It is clear that there was widespread mis-selling to members of the BSPS. The FCA found from a sample of those members that nearly half had been given unsuitable advice or advice that was unclear.
In its findings, the review into those pensions transfers recommended that pension scheme trustees should compile a list of recommended advisers for pensions transfers. Indeed, it seems strange that that is not already the case. I know that unions such as Community and Unite have done their best, but it is a complicated set of circumstances in which people have been shamelessly robbed of their pension funds. It is right that scheme members should not be left out in the wilderness when it comes to advice on what to do with their retirement savings. There must be more clarity for scheme members, so that they are not lured in by dodgy and self-interested firms, as illustrated by the hon. Member for Aberavon (Stephen Kinnock).
10:03 am
Jack Dromey (Birmingham, Erdington) (Lab)
It is a pleasure to serve under your chairmanship, Mr Howarth. First, I congratulate my hon. Friend the Member for Blaenau Gwent (Nick Smith) on securing the debate. I praise my hon. Friend the Member for Aberavon (Stephen Kinnock), who has played a major role in the drive for justice for those who were cheated on their pensions, the work of the APPG and the co-operation of colleagues from the SNP. I also welcome to her first Westminster Hall debate the newly elected Member for Newport West, my hon. Friend the Member for Newport West (Ruth Jones), who will, I know, be a strong champion of the people of Newport West.
A good pension is about security and dignity in retirement. The people of Britain deserve nothing but security and dignity in retirement. People work hard, build our country and, when they come towards retirement, plan ahead for the holiday they had always dreamed of, or to help their kids to be able to buy their own home. There can be nothing more painful than to be cheated out of what they have worked for all their lives.
I sometimes say I have been around since Churchill was a boy. I remember the era back in the 1970s and 1980s, when half the population of Britain was in good final salary DB schemes. We have made some progress—for example, the battle on auto-enrolment that we fought and won when Labour was in power, and which I welcome being carried forward by this Government—but to be frank, there has been a depressing direction of travel for good final salary schemes. There have been too many scandals, but none more scandalous than that of British Steel, and that is emblematic of the problem we face with the regulation of DB pension schemes in the UK.
As my hon. Friend the Member for Blaenau Gwent stated, when a deal was struck to keep Tata afloat, members belonging to the £15 billion British Steel pension fund were given the option to shift their assured benefits to the Pension Protection Fund, to join a new retirement scheme backed by Tata, or to transfer to personal pension funds. That led to what was called a “feeding frenzy” at the site in Port Talbot, as dodgy introducers preyed on workers who were more than likely confused about the position of their pension, and who may not have had the financial support or education needed to make such an important decision. Some advice was available, but often it was simply not good enough, or it was technical and unintelligible. Those rogues, those introducers, should be utterly ashamed of themselves. They bought meals for workers in local pubs, and convinced them to transfer their pensions into totally unsuitable schemes. Some people could have lost up to six figures from their pension total.
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The financial and emotional toll that this crisis has taken on my constituents and many others has been heavy. They worked hard for decades to earn their pensions, and they expected a secure pot to provide for them and their families. That was put at risk because of the wrongdoing of a few bad actors and a weak response from the regulators. Steelworkers and their families have been let down. The Government and the FCA must improve their act and support those people better. The rogues who ripped off steelworkers and their families must be held to account. If the regulators cannot do that, the police need to step in. We need to make sure that good people see their hard-earned money better protected in future.
Who were those unscrupulous financial advisers? The main culprits have been Active Wealth (UK) Ltd and a man named Darren Reynolds, who account for all but a couple of the 77 cases that have so far been taken up with the Financial Services Compensation Scheme. The FSCS has so far paid out £1.8 million to 61 of the 77 claimants, 16 of whom exceeded the £50,000 compensation limit—a limit that has since risen to £85,000. For those who have not been granted compensation, it is purely because they have not suffered a loss, not because they were not badly advised. I think I am right in saying that every single claimant was judged to have been badly advised.
It has been clear for some time that Active Wealth was just the tip of the iceberg. Several other advisers have been acting inappropriately; one did a lot of work in concert with a financial adviser who did not have the required permissions. The transfers were going through in about one hour, and some steelworkers never even met with an adviser. In another part of the country, in west Wales, an adviser had the required permissions, but by the end of 2017 had had their permissions to do pensions transfers revoked. Scores of steelworkers were days away from the transfer cut-off when that adviser circled in. Other advisers saw the writing on the wall and went into voluntary liquidation a few months ago. Those two advisers took their clients with them, literally next door.
Other sales tactics were entirely risible. In one case, steelworkers were turning up at an adviser’s office over the weekend because he had told them that on Monday the pension company would be stopping distribution in the UK. He was literally telling them to hurry up and buy; he spent 30 minutes talking to each steelworker about their pension. It is notable that those financial advisers are finding it easier to simply lock up shop, close their business down and walk away than to face up to what they have done. That, in effect, then limits the redress that steelworkers can receive to £50,000—now up to £85,000—under the Financial Services Compensation Scheme, and from £150,000 under the Financial Ombudsman Service. In effect, we have a deep structural problem in the system, with financial advisers able simply to lock up shop and walk away, rather than give redress to the people they have ripped off. That is a fundamental question for the regulator.
These men were let down not just by rogue financial advisers, but by the authorities: the regulator, namely the Financial Conduct Authority, and the Government. The FCA was far too slow to see the obvious risks and act to protect steelworkers from these vultures. It knew from its investigation in 2017 that more than half of the transfer advice being given was not up to its own standards, but even that, apparently, did not raise any alarm bells or red flags. Most shockingly, certain financial advisers who were under investigation still appeared on the FCA website. The fact that that information was unavailable to the steelworkers feels utterly unjust.
The focus now is to raise awareness among steelworkers who have not spoken up but are due compensation, and to ask them to come forward and seek advice. Something that we have all observed is the role of shame in that. Many steelworkers are deeply embarrassed and ashamed that they have been ripped off. They have found it extremely difficult to share that difficult information with their families and spouses—one of the reasons that more men have not come forward.
I recognise that this is an emotionally sensitive matter for those involved, who may be reluctant to overturn the rock and look at what they might find underneath. However, it is right that we do everything that we can to get justice for these men. Investment companies and self-invested personal pension providers must no longer be able to look the other way and adopt a “see no evil, ask no questions, tell no lies” approach as long as the money continues to roll in. That approach is morally bankrupt.
Since the end of 2017, I have been working with my hon. Friends the Members for Blaenau Gwent and for Gower (Tonia Antoniazzi), lawyers and independent financial advisers in order to bang the drum and get these steelworkers the justice that they deserve. In November, 18 steelworkers came to Westminster to meet the regulators and the FSCS. We were pleased that the FSCS was able to revisit some of those adviser charges. We have also had very welcome promises from the FCA to run seminars in Port Talbot. Tata has also shown a willingness to facilitate meetings with the men—all in the cause of raising awareness. That means that we can at least be optimistic that getting these men some of the justice that they deserve may be possible.
Looking forward, our main focus must be, first, to continue to raise awareness among the steelworkers who may be affected. All firms that gave advice to transfer should verifiably send out a letter written by the FCA, strongly advising them to get the advice looked at and reminding them that they may be entitled to a form of financial top-up if they come forward. We will keep pressing the FSCS and FCA to offer the level of compensation package that the men who have come forward deserve and are due. We will also focus relentlessly on ensuring that unscrupulous advisers are exposed for what they are, and that every bit of insurance that they owe is claimed.
Secondly, we must do all we can to achieve legislative change. We need to ensure that individuals are automatically enrolled in new schemes, not left to be picked off mercilessly by rogue financial advisers in an environment that is characterised by uncertainty. Thirdly, we need to ensure that regulators do their jobs. Why the advisers that I mentioned were allowed to remain on the FCA website while under investigation seriously needs looking into.
Finally, it is worth noting that this issue does not affect steelworkers alone, and that pension mis-selling pay-outs in 2018 hit a whopping £40 million—double the figure for 2017. This is a national issue across many sectors, and it is up to the FCA and the Government to stand up and stick by workers and pensioners who have been wrongly advised, and do all they can to improve regulation and legislation for future generations. I look forward to working with those in this room on all of those challenges, and I thank hon. Members for their attention.
The Scottish National party is keen to support steel communities across Scotland. First and foremost, workers must be put at the heart of solutions to put pension funds on a sustainable footing. The SNP Scottish Government took urgent action to ensure that steel plants were attractive to potential investors, to save workers from losing out. An investment of almost £200,000 was made by the Scottish Government to keep key workers on standby to safeguard full manufacturing capability, ensuring that plants could get back up and running as quickly as possible. The Dalzell works in my Motherwell and Wishaw constituency was the prime beneficiary of that policy, which also helped to safeguard Clydebridge works in the neighbouring constituency of Rutherglen and Hamilton West.
When the UK Government were dealing with the matter of the British Steel pension scheme, my hon. Friend the Member for Airdrie and Shotts (Neil Gray) expressed concern to the then Secretary of State for Business, Innovation and Skills that workplace pensions and incentives to save must not be undermined by any deal. In Parliament, my SNP colleagues and I have expressed solidarity with the workers at those plants, and I must thank the all-party parliamentary group on steel and metal related industries, which has done outstanding work in that regard as well. Hon. Members should rest assured that we will continue to press the UK Government to take meaningful action on issues that threaten the viability of industrial premises across the UK and their workers. This entire episode reaffirms the need for an independent pensions and savings commission to put the pensions landscape on a sustainable footing.
People have a right to know and understand their pension savings. At the moment, the UK Government’s extremely complicated pensions and savings landscape—made all the more confusing through the introduction of pension freedoms and vehicles such as lifetime ISAs—is making it more likely that consumers will make the wrong choices for their circumstances.
The BSPS members were in an extremely difficult and vulnerable situation that was exploited by greedy firms to the detriment of normal working people, who deserve the retirement that was promised to them. I can speak personally of the difficulties of realising that the pension being looked forward to will not materialise, because it happened in my husband’s case. We were not in anything like extreme circumstances, but it was still a shock to us that the future we had been promised and were looking forward to did not happen.
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 where defined benefit schemes are becoming a thing of the past. Now that the UK Government are battling with the chaos caused by the Brexit vote, the need for such an independent commission is more important than ever. This also highlights that the Government’s initiatives to improve consumer support and pensions are playing catch-up. More action must be taken urgently.
The Government have dragged their heels on the introduction of the pension dashboard, but there is absolutely no reason why this needs to be dragged out. It certainly should not be watered down. Consumers need a unified dashboard that includes their state and private pensions. The SNP was broadly supportive of the creation of a new single financial guidance and claims body that would merge independent financial and pensions advice bodies, and the Minister should update the House on the progress of the establishment of this body. Is it up and running? How can it be used to ensure that people in vulnerable circumstances, such as BSPS members, can be armed with the facts to be able to make the right choices for their retirement?
I again congratulate the hon. Members for Blaenau Gwent and for Aberavon on their outstanding work in this field. In the past, I have had dealings with the Financial Conduct Authority on pensions matters and with the financial ombudsman and have found them to be reactive, dilatory and unable and uncertain about how they can best help constituents who have been tricked and duped in terrible circumstances. The idea that men, and it is nearly always men, who worked in a hard and sometimes dangerous job should end up being duped by financial advisers—to their complete detriment—and unable to look their families in the eye and say, “I made a mistake, I am sorry, but nothing can be done”, is unacceptable to everyone in this place.
The Financial Conduct Authority has been probing concerns that pension changes that involve 130,000 members of the Tata retirement fund appear to have been affected. A study of the 8,000 people who transferred their pension demonstrated that 58% received advice that was simply not suitable, and the Pensions Regulator calculated that in 2017, the average loss was £94,000.
I will never forget the heartbreaking story that I was told by the chief executive of the Pensions Advisory Service during the passage of the Financial Guidance and Claims Bill that introduced the Single Financial Guidance Body. The Pensions Advisory Service set up an advice facility on site, and one of the first people to come in was a big burly steelworker and shift supervisor. He sat down and burst into tears. It turned out that he had been duped by one of those introducers, and it had cost him tens of thousands of pounds. The main reason for his grief, however, was not what he had suffered and would endure for the rest of his life, but the fact that the 20 guys on his shift had all followed his lead. He said to the Pensions Advisory Service, “I’ll never, ever be able to forgive myself, because the mistake that I made has had catastrophic consequences for the people I’ve worked with for 10, 20 or 30 years”.
The British Steel case was central to our work during the Financial Guidance and Claims Bill, and I pay tribute to the work of my hon. Friends the Members for Blaenau Gwent and for Aberavon, and many other Members, particularly from Wales, who played a noble role in strengthening the legislation to crack down on the outrageous. Real progress was made. Cold calling more generally was central to the debate on the Bill, and the ban on pension cold calling was a significant step in the right direction. However, we must now go further and introduce a ban on all cold calling—there were constructive discussions about that, and it would be helpful if the Minister would update us on the Government’s thinking—and we must also ban the work of introducers. From January this year there has been an end to pension cold calling, but more needs to be done.
More generally, the introduction of the Single Financial Guidance Body is a welcome step towards greater financial education and security. It brings together the three previous bodies, which all did good work, into a new, more effective body for the next stages. Crucially, it needs to be adequately resourced, not least because of the role that it will play in the oversight of the dashboard process, but it is welcome that it has been established.
Having said that, lessons need to be learned, and significant further progress must be made. On the learning of lessons, and the need for action, the right hon. Member for Birkenhead (Frank Field), the Chair of the Work and Pensions Committee, said of the Committee’s findings earlier this year:
“British steelworkers were roundly failed by the official regulators meant to protect their life savings. They were given precious little to guide them through murky waters filled with scammers looking to snatch their pensions—scammers who had little to fear from the FCA’s grossly inadequate action at the time”,
which I think it now acknowledges. The right hon. Gentleman continued:
“Now it seems they are being sold short again on what even the FCA calls ‘rightly’ deserved compensation. The FCA has ridden to their defence and urged the FSCS to be more generous, but the FSCS is clinging to rules the FCA says needn’t apply.”
That is a powerful indictment of what happened, and a call for further action to be taken. That is essential because—I say this with some sadness—British Steel is not the only outrageous case of pension mishandling. We have seen too many other scandals, most notably BHS and Philip Green, who ought to be utterly ashamed of the way he has conducted himself over the years, and what happened with the collapse of Carillion, which I will never forget.
In my constituency, we had a first-class apprentice training centre that was operated by Carillion and that had 60 apprentices going through it at any one time. When Carillion collapsed on the Monday, they were told, “Don’t worry. You’ll be okay.” On the Tuesday, they all got called in and sent home at lunch time—a number of them in tears. One young man, who had suffered from autism but whose life had been moving forward in the right direction, was sobbing uncontrollably and saying, “What am I going to tell my mum?”
On the pensions issue, Carillion has been centre stage in our discussions, including with the Government, about the further steps that need to be taken. Some of the proposals in the DB White Paper are welcome, such as stronger criminal sanctions for directors neglecting pension schemes—although I will come on to the fact that the possibility of criminal action is there in the here and now—stronger powers for TPR, and clearer standards on scheme funding.