Mr John Whittingdale (Maldon): I, too, congratulate my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) not just on securing the debate from the Backbench Business Committee but on how he has led the campaign, which has been supported on both sides of the House, as demonstrated this afternoon. It is a pleasure to follow the hon. Member for Swansea West (Geraint Davies), who has also been tireless in pursuing the matter. It is notable that four parties are represented in the House this afternoon. Sometimes MPs put aside their party differences and come together when it is plain that there has been an injustice that needs to be put right. That is certainly the case with the issue we are debating this afternoon.
There is a danger in such a debate that one simply repeats the points that have been made. We have already heard some powerful speeches from both sides of the House, such as that from my constituency neighbour, my right hon. Friend the Member for Chelmsford (Mr Burns), who represents many of the Essex Visteon pensioners, as I do. As has been pointed out, it is particularly sad that it is necessary to have this debate a second time—I participated in the debate in Westminster Hall—because we all still have great respect and admiration for the Ford Motor Company. It has a proud history in this country and a strong reputation across the world, yet this is a terrible stain on that reputation.
It is perhaps because Ford has previously been seen as such a strong company that it was understandable that its employees, who had given many years of service, should believe the assurances they were given when they told that they were being transferred to the Visteon company and that their pensions could be transferred to a new Visteon pension fund. I will not repeat the quotations given by many hon. Members about how they were told that there would be no detriment and that their pensions were guaranteed under the same terms and conditions. Of course they believed that, yet today they find that the position is very different.
It is particularly sad when one meets and talks to employees who gave many years of service to Ford that now seems to be ignored and forgotten because for a few years—or even, in some cases, for a few months—they transferred to the Visteon company. In particular, I mention Mr Steve Sharpe, my constituent from Heybridge, who spent 27 years working for the Ford Motor Company and three months working for Visteon, yet has lost 50% of his pension. On any grounds, that is clearly wrong and should be recognised as such by the Ford Motor Company. What makes it worse is that—we have heard reference to this—it appears that Ford knew perfectly well that the Visteon company could not succeed, and indeed took actions after its establishment which made absolutely certain that it was not viable in the long term.
Also, we know that the Visteon pension fund was underfunded right from the start. In the discussions that we have had as part of the all-party group, we have talked to the Pensions Regulator, for instance. It is perhaps a matter of regret that the Pensions Regulator was not in place at the time that this happened. It is perhaps worth speculating that had we had the Pensions Regulator, this situation would not have been allowed to arise. I am grateful to see on the Front Bench the Minister of State, Department for Work and Pensions, the hon. Member for Thornbury and Yate (Steve Webb), who responded to the previous debate so is familiar with this injustice.
At that time we talked about the way in which the cap on the Pension Protection Fund affected some former employees of Visteon. That is something that the Government have sought to address, but it is still impacting severely on some pensioners of the Visteon company. Perhaps the Minister might touch on that in his response.
As we know, there is a legal case pending, and I of course hear the instruction from the Chair. We do not want to prejudice in any way the legal proceedings that are under way. It should not be necessary because ultimately it is not a question of whether or not Ford acted within or outside the law. It is, as Members in all parts of the House have said, a question of corporate social responsibility. It is a question of the reputational damage that this is doing to Ford across this country and beyond, and it is a question of morality and decency.
Sir Bob Russell (Colchester) (LD): The Minister will have noticed the unity of Essex MPs. Does my hon. Friend agree that the legal skirt behind which Ford is trying to hide is shrinking all the time and the petticoat of morality is now around its ankles?
Mr Whittingdale: The hon. Gentleman puts it in his unique style. I think I agree with the message he is giving.
As I say, we will wait to see what happens in the courts, but I hope we do not have to, and that the Ford Motor Company will hear the message being sent from this Chamber this afternoon. My hon. Friend the Member for Rochford and Southend East (James Duddridge) talked about the possibility of a Select Committee hearing. Whether or not we could force the Ford Motor Company to come to this country to a Select Committee is not entirely clear. I have had some experience of forcing people to come before Select Committees, and there is a problem if they are on the other side of the Atlantic. Again, that should not be necessary.
What should be apparent from hearing all the Members who have spoken this afternoon is the overwhelming moral case of the people who gave years of service to the Ford Motor Company and were told that they would be looked after in the future, yet now have suffered real loss due to the fact that they were transferred to the new company, which in a sense was almost bound to fail.
It is just a couple of weeks before Christmas. If the Ford Motor Company wanted to give a Christmas present, it should honour its moral obligations to the Visteon pensioners.
Nick de Bois (Enfield North) (Con): I, too, pay tribute to my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) for securing this debate and the spirit in which it is being held. We have all been at pains to stress our understanding and support for Ford as a major employer in this country, and I echo those sentiments. It has a proud history and plays a very significant role in our industrial base. Notwithstanding that, I do not believe that this House has ever been prevented from doing or saying the right thing when it matters, and I think we do so in that spirit today.
I do not wish to repeat the points that have already been made, but that does not mean I do not agree with them. I will highlight one or two specific areas, but before doing so I would like to say that I, like many Members here, am conscious of Visteon’s national reach, because it has reached into many constituencies. I compliment all of them on the conduct of their campaign, which at all times has been impassioned and powerful, but also courteous and respectful. I pay particular tribute to my neighbours and constituents in Enfield, whom I admire for their tenacity, of which I have had first-hand experience. I am delighted to be here to speak for them on the matter.
Ford, we are told, even on its website today, is a family of global vehicles and global employees. I think that they probably believe that, but today we have seen the evidence that that is not quite true.
Geraint Davies: I need to leave the Chamber for 10 minutes to give an interview to discuss whether or not Ford is a happy family across the pond, and how important it is for us to act to make it so for the future so that everybody has their fair share. I apologise to the hon. Gentleman and to you, Madam Deputy Speaker, for having to leave, but I want to air that on the media.
Nick de Bois: I am grateful to the hon. Gentleman for his intervention and understand that he has to attend to pressing priorities, and rightly so.
I would like to highlight two points. We have talked about the possible lack of understanding at Ford in the US about the consequences of the decisions that were taken here in the UK. I have considerable experience—some might say that I have the scars on my back—of working in America, having worked with American businesses and set up my own business there. It is an extremely different culture, particularly when it comes to employee relations. I can speak only about my area, and of course the company was not a substantive corporation like Ford, but I know that the work force protection schemes in America are nothing like those in this country, and many say that we have some of the least onerous schemes, compared with the rest of Europe. In America, an employer can hire and fire almost at will without recompense. There are a limited set of protections for redundancy or sacking with or without cause, but it is a very different culture. We may speak the same language, but we are not necessarily united by it in our practices.
It may well be that people in the boardrooms in America do not understand the implications or the potential harm to their reputation of pressing ahead and distancing themselves from the issues facing the pensioners of Visteon. I urge them to listen carefully and to imagine themselves not in the boardrooms of America looking over here, but over here looking at it through the eyes of their UK allies and partners. They might then understand what has driven us to the Chamber today and what has driven the unrelenting cause of Visteon pensioners.
Stephen Metcalfe: Does my hon. Friend agree that had the situation occurred in the United States and 3,500 employees who had worked for such an iconic corporation were banging on Ford’s front door in Dearborn because they had had their pensions reduced so dramatically, the issue might have been solved long ago? It is out of sight and out of mind over here.
Nick de Bois: I am afraid that I have to agree with my hon. Friend. I cannot give an example off the top off my head, but it is certainly true that companies are often preoccupied with what is happening on their own side of the pond, whichever side that is, and even for a global corporation it is still challenging to understand the dynamics that drive the worker-employee relationship and the customer relationship. He makes the point extremely well.
We have heard evidence today that Visteon was, to all intents and purposes, a captive supplier—of that there is little doubt. Given the choice of being a captive supplier or a partner, of course companies in these business environments seek to be a partner. As a supplier, they have to strive for a long-term relationship to guarantee the future of their business and employees. It is interesting that Ford’s supply chain strategy, which was started some considerable time ago, was to develop an aligned business framework with suppliers that recognised the need to work closely with them in a way that is, according to its website,
“designed to create a sustainable business model to increase mutual profitability”
and encourage a long-term partnership. That implies a deep and close understanding of the business dynamics at play in Visteon, including the financial accounts; it cannot mean anything else.
I was surprised to read that Ford spokesmen still stick to this line:
“While Ford recognises the severity of the situation for former Visteon UK employees, Visteon became an independent company in 2000 and was responsible for its own business decisions.”
That does not sit comfortably with the reality of working with a captive supplier or partner, or someone who aspires to be an aligned business framework supplier. That suggests that there are grounds for genuine doubts as to whether the demise of Visteon was part of a strategy, first, to reduce a burden of cost on Ford’s balance sheet, and subsequently, to change its supplier base. I carefully say that that is the question it is perfectly legitimate to ask in the light of its strategy statements about how closely it works with its suppliers.
The moral case has been explored today, and I obviously add my weight to that, but let me add some perspective on the financial matters facing Ford Motor Company globally. Yes, it faced some challenging times. Certainly, the whole industry faced some challenging times, not least in the previous three to five years that we know about all too well. However, its record now is more than satisfactory. While its European business is still undergoing some financial restructuring, the last quarter saw a $1.27 billion profit. In fact, its operating basis was $1.82 billion for the quarter, but the notes to its accounts say that that was reduced to $1.27 billion because it was restructuring in Europe, including large pension lump sum payoffs. If my constituents and the other Visteon pensioners were part of those payoffs, this would be a far happier time for them and for Members in this House who represent them.
I urge Ford in the US not only to challenge itself on the moral case but to look itself in the eye and say that this is a relatively small price for an exceptionally profitable company whose results have been delivered by employees who not only worked for it but then worked in its supply chain. Then it can live up to the values that it has until recently had cause to be proud of.
Rebecca Harris (Castle Point) (Con): I, too, congratulate my parliamentary neighbour, my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe), on his outstanding work in chairing the all-party group on Visteon and on securing this important debate.
It is very sad that, in the year the Ford family is celebrating the 100th anniversary of its first moving assembly line, we are having a debate about how poorly it has treated former proud members of its family and about how best we can support them and—I think we are all united in this—persuade Ford to recognise its moral obligation following its treatment of Visteon workers.
Ford has a good reputation for looking after its staff, and those constituents of mine who still work for Ford speak very highly of the way they are treated by the company. They have a great attachment to the brand and genuinely feel part of it. I think that makes the situation rather more heartbreaking for Visteon workers, who used to wear the familiar Ford logo with pride, but now feel compelled, after the treatment they have received, to campaign with a blue oval “Fraud” logo on their hats instead.
When I first became aware of the closure of Visteon, I, like many others, may have initially mistaken it for yet another sign of the depressing state of the economy back in 2009. It was not until I met a substantial number of residents who had previously been Visteon employees that it became very apparent to me that its collapse and the subsequent pensions issue for former employees was down to something more sinister, some of the details of which have already been well covered.
At that first meeting in my office, I was struck by what a sensible and level-headed bunch of men they were. They were definitely not the kind of men, in my opinion, who would recklessly take any advice from or let themselves be conned by a flashy sales pitch that other people might have said sounded too good to be true. Put simply, they are men who had worked hard all their lives to provide for themselves and their families, and for what they hoped would be a decent standard of living in retirement. In political-speak, we would say they are people who have worked hard and done the right thing, and that is why we are all in unison in supporting them in their fight with Ford.
I hope they will not be offended if I say that they are not all of an age whereby someone could glibly suggest that they go and get another skilled career in order to rebuild their shortfall. As we have heard, some of the Visteon pensioners have already passed away and missed the opportunity to be recompensed, and therein lies the rub.
These are people who gave many years of loyal service to Ford prior to the establishment of Visteon. They trusted the advice given by Ford at the time—that their pensions would be safely protected in the new arrangements; otherwise, they would never have moved over to Visteon. I add my own admiration to that voiced by colleagues for the effective and downright dogged way in which they have run their brilliant campaign, including demonstrating outside the Ford dealership in Rayleigh Weir in my constituency every Saturday, come rain, snow, blistering sun or, on occasion, flood. I commend them for their determination.
Let me get back to the basics of the matter. Visteon was spun off by Ford in order to reduce its operating costs. It was never functionally independent because it relied on Ford for about 90% of its business. Ford was even in a position to dictate the price at which it could buy back its product. In fact, I understand that it agreed a pricing pathway with Visteon management at the establishment of the company, but that agreement was never stuck to. The staff who transferred from Ford to Visteon were never even given separate contracts with the new company. Of course, with the benefit of hindsight one might now say that a successful multinational such as Ford was hardly likely to create and spin off a company that would be respectably profitable in the future. Perhaps that was the only warning sign we had.
Given what we have heard over the past three years, the situation seems to have gone further than that. The House has heard the view that Ford set up Visteon to fail, and loaded the pension fund with a deficit that was never going to be sustainable. What is even more unforgiveable for the former Ford employees is that it would appear that Ford—the primary customer of Visteon products—had actively anticipated and planned for the shutdown of UK Visteon operations since way back in 2006.
The Visteon Pension Action Group has documents compiled by Ford management—which went to great lengths to keep them away from Visteon employees—that give details of plans for projects to allow other companies to seamlessly pick up the supply chain when the UK plants closed. The high-level project was apparently known as “Kennedy”, and was directly controlled by Ford Motor Company personnel who were responsible for agreeing new supplier sources and the cost and quality of new products, and for releasing those products into the Ford production system. Visteon UK, as the incumbent supplier, was responsible for identifying potential new suppliers and developing them to meet Ford criteria for cost, quality and supply logistics. I gather that such lower-level projects were known as Protea, Cummins D3 and Arrow. They do not mean an awful lot to me, but they do to the pensioners in the action group.
It should be noted that, depending on product complexity, normal resourcing action takes between 12 and 24 months to allow time for the manufacture of new tooling, initial production runs, quality and testing checks, and supply filling. It therefore seems quite clear that Ford Motor Company was directly involved in such resourcing actions. When Visteon UK stopped supplying Ford very abruptly on going into administration on 31 March 2009, Ford vehicle operations did not stop for one second due to any lack of parts. Stockpiling of Visteon parts had taken place and the new supplier parts were available immediately. As we have heard, it is of course completely reasonable for companies to put in place contingencies in case a supplier folds, but that eventuality was completely within the power and design of Ford Motor Company.
It seems to me that Ford was therefore involved in the deconstruction of Visteon at least three years before the company went into administration. Ford knew that the pension fund deal it had put in place, and which it had encouraged its workers to take—allowing them to trust it in moving on to that deal—would mean that thousands of employees would be left out of pocket. That is why I believe that Ford has a moral obligation to come to the table with MPs and the Visteon Pension Action Group to agree a fair and just deal for Visteon employees.
The cause of the action group has been greatly frustrated by the fact that tougher rules on pension regulation came in several years after the Visteon pension scheme was established. I welcome the Government’s announcement earlier this year that the cap on compensation payments from the Pension Protection Fund will rise to 3% for pensioners with a record of more than 20 years’ service.
It is my sincerest hope that executives watching this debate in the boardroom in the States take note of what has been said today, and of the damage that the whole situation is doing to their otherwise good reputation among their own employees and to their brand in general. Finally, I once more congratulate the members of the Visteon Pension Action Group on their campaign so far, and I assure them of my and my colleagues’ continued support in this Chamber for their fight, because they all deserve justice.
James Duddridge (Rochford and Southend East) (Con): It is a great privilege to follow such an enviable group of MPs, particularly those from Essex. We started with eminent words from Basildon and then moved down the estuary to those from Castle Point, and we will end—I hope on a high point—in Rochford and Southend East. Several points have been made, and I will take care not to reiterate them, even to add emphasis.
Not in the last debate on Visteon but in the one before that, my hon. Friend the Member for Broxbourne (Mr Walker) referred to Ford as
“a four-letter company, behaving in a four-letter way”.—[Official Report, 4 December 2012; Vol. 554, c. 182WH.]
Hon. Members will recognise that we normally speak in very temperate language, so people should bear in mind how strongly we all feel about this issue. Very rarely is there a debate in which such strong words are used as we have heard today from both sides of the House. It has been not so much a debate as a siren call for action. Points have been made from either side, but they have all pressed Ford in the same direction.
I must disagree with my hon. Friend the Member for Enfield North (Nick de Bois), who felt that the issue was a stylistic change between American and British business practices and some type of misunderstanding. If it had involved Baltimore rather than Basildon, or Seattle rather than Swansea, the same lack of duty of care and the same lack of moral responsibility towards employees would not have been tolerated.
I know that my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) has travelled to the US and had informal discussions with several Congressmen. I hope that in the near future that can be formalised by making a request that the US Congress look at the issue alongside us, which will increase the pressure on Ford Motor Company.
Jackie Doyle-Price: I do not know whether my hon. Friend has seen the film “Made in Dagenham”, but it clearly brings out the very close relationship between Ford and the unions, and how the workers trusted it to give them the best deal. In that respect, have not the workers been greatly let down? They expected a deal to be made that was good for them and they had put their trust in the company, but they were sitting ducks to be misled.
James Duddridge: My hon. Friend makes a very good point. Not only have I watched the film, but one of my constituents, Lesley Butcher, starred in it in a voiceover role. She is also an excellent parish councillor in Rochford, but that is her claim to fame. That goes to show what a close community we are. The community trusted Ford and was badly let down.
The motion has been signed by my right hon. Friend the Member for Chelmsford (Mr Burns). People who do not know his background might think that his speech verged on being anti-American. Given his strong passion for that country, I do not think it can be seen as anti-American. He will certainly be distraught that the project that allowed the supply chain to continue had the name Project Kennedy. My hon. Friend the Member for Castle Point (Rebecca Harris) made the very good point that this was clearly not an independent company. Project Kennedy allowed the continuity of the supply chain. Effectively, the directors and managers of Ford were shadow directors of Visteon. They were manipulating what went on in that separate company.
I hesitate to share with the House my ambitions as a young child.
James Duddridge: I am urged to do so, so I will. I wanted to be a Conservative Member of Parliament and I have achieved that. I wanted to have a purple pool table, and I hope that my wife reads Hansard tomorrow so that she knows what to get me as a Christmas present. I have always wanted a Ford Capri Mk II. It saddens me that, even if I had the space and the money, I would not be prepared to buy a Ford now. I am not irresponsible enough to call on my constituents, many of whom work at Ford, to boycott Ford in its entirety. However, I am sure that there are many people like me who are proud of Ford’s heritage, like Ford cars and like the Mustang that is coming out, but who would not think of buying a Ford car because of Visteon.
Every Saturday, I go to mini-football with my son and I sit alongside somebody who works at Ford. I have discussed the Visteon issue with him. I am fearful that an organisation that has made such a mistake with Visteon may very well make it again. Are the pension funds of Ford safe at the moment? If I were a Ford employee, I would be very fearful of that.
I do not know what Ford executives consider to be normal behaviour within a family, but this is no way to behave. If we follow the analogy, such behaviour would lead to divorce, family breakdown and great woes. Ford has let us down consistently. There is a small window of opportunity between now and the court case for it to do the right thing morally by our constituents, six of whom have made direct representations to me. If it does the right thing kicking and screaming, only when forced to by the courts, it deserves to take no credit whatever. It needs to act now, before the court case.
Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab): May I add my congratulations to the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe) on securing this debate? We have heard unanimity across the House on the issues at stake.
I have been struck by the strong sense in the contributions to this debate that Ford has a moral responsibility to take seriously the issues that have emerged since Visteon’s collapse. That point has been put across eloquently by Members from across the House. That moral responsibility comes from the fact that Ford workers, who had given many years of service, believed that their pensions were safe. Some of those workers are with us today. Members from across the House have made the point that Ford is a blue-chip brand with a long track record in the UK. For those reasons, this case has continued to arouse strong feelings on both sides of the House.
I ask hon. Members across the House to reflect on how one ensures that companies engage in and understand their responsibilities beyond the bottom line. Another way to describe a moral responsibility is to say that companies, corporations and those that employ people in our country have obligations beyond just the maximum profit they can make. That is certainly what the workers at Ford always felt, and they were assured—and felt assured—that in transferring their pensions to Visteon, their accrued rights would be protected.
It is important to add and iterate—I suspect the Minister will want to reflect on this—that at play here is the wider issue of what happens when occupational pension schemes get into trouble and it is discovered that they are sponsoring an employer that is going under. The previous Government, reacting to the Visteon case and to other well-known examples, created the Pensions Regulator and the Pension Protection Fund. I suspect the Minister will want to say something about the interaction between those institutions—not just the pensions landscape as it sits now, but as it relates to Visteon pensioners. Indeed, he recently proposed an amendment to the Pensions Bill so that the cap on payments under Pension Protection Fund regulations can be raised. I understand that there are Visteon pensioners who will benefit from that—those who might have retired before Visteon collapsed, but who have long years of service with Ford and then Visteon—but it is not a solution for all those pensioners.
A significant question that has been raised by Members across the House concerns what the Government can do and need to do to ensure and underpin occupational pension arrangements. The Pension Protection Fund and Pensions Regulator are central to that, and if I remember rightly, the hon. Member for South Basildon and East Thurrock said that the Government can do more on the cap and the need for proper independent advice on transfers.
Pensions are a complicated business, and during pension transfers from one company to another, employees inevitably depend on the advice they are given from what they understand to be expert sources.
Mr Simon Burns: I have listened carefully to the hon. Gentleman, and I should be grateful to know what his message is to Ford about this unacceptable situation.
Gregg McClymont: My message would be the message that has come from across the House, including from the right hon. Gentleman, which is that we must engage seriously with the issue at hand and Ford must face up to its responsibilities in this matter. As has been said—again, by Members from across the House—Ford is a company with a strong imprint in the UK and has been here a long time. Unless the public are confident that Ford will play by the rules and treat people fairly, the potential damage to Ford’s brand is obvious. “Brand” can sound rather advertisement-like, but the position is very simple.
Nick de Bois: The hon. Gentleman talks about the brand and the customers, but it looks to me as if Ford has treated a supplier abominably. Perhaps there is a message that could go out to suppliers that is an unhealthy one.
Gregg McClymont: We have to be careful, given the ongoing legal case, but the comments from both sides of the House on these issues have resonated with everyone in the House today, including with those in the Public Gallery. Both sides of the House are clear that Ford must engage with its responsibilities. The wider issue is that if companies have a responsibility, beyond the bottom line, to their employees and the countries in which they operate, the direction of travel for Ford in this case must be clear.
What more can the Government do to satisfy the demands of Ford Visteon pensioners? I would be delighted to hear the Minister outline what the changes to the PPF cap mean and talk about the wider issue of ensuring that such pension transfers do not end up being to the great detriment of employees.
James Duddridge: On what more the Government can do, in my speech I explained that—doing my bit in my small way—I would not be buying a Ford Capri Mk II. The Government have a bit more purchasing power than the Duddridge household. How does the hon. Gentleman feel about the Government reconsidering purchasing Ford vehicles until this matter is resolved?
Gregg McClymont: That is a question for the Minister, who is just about to respond to the debate.
The Minister of State, Department for Work and Pensions (Steve Webb): I join in congratulating my hon. Friend the Member for South Basildon and East Thurrock (Stephen Metcalfe) on his work as chair of the all-party group and his perseverance over a number years in raising this issue, along with the officers and members of the all-party group, which is well represented today. Such unanimity across the House, across political parties and across parts of the United Kingdom is rare and is all the more telling for that. The House has spoken today with a single voice. Those who follow our proceedings, both in person and by other means, will have heard clearly the single view of the House of Commons.
As you will be aware, Madam Deputy Speaker, at the beginning of our proceedings your fellow Deputy Speaker relayed Mr Speaker’s guidance. We respect that guidance, of course. I am particularly conscious of the need to avoid saying anything that would in any way undermine or prejudice the case being brought by Unite the union and by individual former Visteon workers. We want to see justice done through due process. I hope the House will understand that my remarks are slightly more guarded for that reason.
We discussed this matter almost exactly a year ago in a debate in Westminster Hall that raised many of the same issues. In the course of that debate, I said that I was particularly conscious of the Visteon workers ending up in the Pension Protection Fund and, as hon. Members have said, finding that the pension they receive is not much more than half the pension they were expecting. With my hon. Friend the Member for South Basildon and East Thurrock, I met members of the Visteon Pension Action Group in summer 2012, and it was their individual case studies that made me acutely aware of the impact of the PPF cap on their entitlements under the scheme. As I explained at the time, the thinking behind the cap was to ensure that what I loosely call the “fat cats” of the scheme, the people right at the top, could not manipulate matters and still receive a full pension. That was why the previous Government introduced the cap. It was my judgment at the time, and it remains so, that the cap was having an unfair and adverse impact on people who had relatively large pension entitlements not because they had earned phenomenal amounts of money, but because they had given very long service.
During the debate, my hon. Friend the Member for South Basildon and East Thurrock referred to his constituent Mr Varney, who had about 38 years of combined service with Visteon and Ford, and my hon. Friend the Member for Maldon (Mr Whittingdale) referred to his constituent Mr Sharpe, who had served for 27 years. These are the sorts of workers potentially caught by the cap, depending—obviously—on their wage. I said in last year’s debate that we were looking at whether we could do something about that, and I am pleased to confirm today that we have acted upon that promise. The Pensions Bill, which is now in another place, provides that for those who have been members of a scheme for more than 20 years, the cap should be increased by 3% for each additional year they are above the cap. Obviously I cannot comment on individual cases but, in principle, someone who has served for 38 years would have 18 lots of 3% so a cap 54% higher than the standard cap. If they were still capped at that point, as it were, their pension would be 54% higher than it is currently.
Sadly, these things take time—the Bill has not passed the other place and when it has we will have to produce detailed secondary legislation—but I can assure the House that we intend these higher rates of payment to be in place in the lifetime of this Parliament and to apply from that date onwards. They will not be retrospectively applied, but they will apply to schemes already in the PPF, such as the Visteon scheme. I am aware that probably only 60 or 70 Visteon employees will be affected by this measure, but I hope that for them, who have suffered the biggest proportionate loss, this will be of some benefit.
James Duddridge: I fully support the payment protection being discussed, but if I follow the logic correctly, the Government are, in effect, paying for Ford’s failure to take moral responsibility. Will there come a point when the Government look to Ford to repay money they have paid out through the PPF?
Steve Webb: It is not the Government who pay for the PPF, but the rest of British industry. It is funded partly by the assets of the schemes in the fund and the investment returns on them and partly by a levy on schemes with defined benefit pension liabilities. I realise it does not change the issue my hon. Friend raises, but it is not the taxpayer who funds the PPF; it is other firms with ongoing defined benefit pension liabilities. The PPF does not form a judgment of the rights and wrongs of a firm’s conduct leading up to insolvency. That is a separate matter that might come up during the court proceedings.
During the debate, we heard that Visteon was spun off from Ford in 2000, before the present architecture—the Pensions Regulator and the PPF—was in place. My hon. Friend the Member for Thurrock (Jackie Doyle-Price) asked whether these sorts of things could happen again and whether a hypothetical future firm could structure its affairs with a view to minimising its pensions liabilities and passing them on to the PPF. I can reassure her that part of the remit of the Pensions Regulator is to protect the PPF and hence other levy payers. For example, firms considering a corporate restructuring that would have implications for the covenant of their pensions scheme can seek pre-clearance from the Pensions Regulator, and the latter has powers to act if a corporate transaction has been undertaken with specific intent to weaken pension protection. The situation, therefore, is considerably different from the one pertaining in 2000.
The hon. Member for Ogmore (Huw Irranca-Davies) and my hon. Friend the Member for Castle Point (Rebecca Harris) described the workers who accepted the transfer from Ford to Visteon. The hon. Gentleman said they were not greedy or stupid, which of course they were not, and my hon. Friend said they were sensible and level-headed. It was the natural thing to do at the time: someone’s employment is transferred from one employer to another, they are given assurances about their pension and it is suggested they transfer it across. There are different accounts of exactly how the conversation went, but it was an entirely rational thing for people to do. There is no suggestion that people who made that decision acted inappropriately; they acted in good faith on the assurances given.
Stephen Metcalfe: One issue that arose about the point of transfer was that some were reaching the end of their careers within Ford but were still left obliged to transfer before—in one case, only three months before—they retired, only to find out later that they had been disadvantaged. Could the Government look at providing for those in the process of reaching retirement a buffer zone, whereby people do not have to transfer out of the fund into which they have put most of their earnings over their working lives?
Steve Webb: It is worth bearing in mind that, in all these cases, we are generally dealing with a trust—a pension fund set up as a trust has trustees—and with private companies, scheme rules and so forth. It is difficult to see how the Government could write a law that interacted with all those different aspects in a rational way. I take my hon. Friend’s point, as I, too, have heard about folk who worked only a few months for Visteon, yet transferred across their life’s pension rights with Ford—with very adverse consequences.
I appreciate that that happened. It is quite clear that no blame or criticism could possibly attach to the workers whose pensions were transferred across; they are clearly the innocent parties in all this.
Prior to this debate, I re-read the transcript of our debate of a year ago. I was struck by the tone, which was slightly different. I do not know whether this was co-ordinated because I was not involved in those conversations, but I was struck that a number of hon. Members said that they did not want to drag Ford down, as they recognised that Ford was a key employer for this country and that many people who worked for the company were proud to do. As I say, I was struck that hon. Members were not trying to denigrate Ford, but were concerned that, if the matter remained unresolved, Ford’s reputation would suffer. I think this striking tone will have been noticed.
It was made clear during the course of the debate that although Visteon was spun off as a separate company, there were close links between Visteon and Ford. My hon. Friend the Member for Enfield North (Nick de Bois) mentioned the nature of the relationship, drawing on his business expertise, while some hon. Members pointed out that new contracts were not signed. Reference was made to the fact that the long service award that Visteon workers received accumulated their Ford service, and there was Ford branding and all of that. Leaving aside the legalities, it is absolutely clear that the two companies were very closely interlinked; there can be no doubt about that.
During our discussions, the potential for Select Committees to look into this issue was raised. What Select Committees choose to investigate is obviously not a matter for the Government, but I am happy to repeat the assurance I gave a year ago that if any Select Committee—perhaps the Culture, Media and Sport Committee could find an obscure angle to get going on this—decided to take up this issue, we would be happy to put at its disposal the expertise of the Pensions Regulator, the Pension Protection Fund and my own officials to advise or guide in any such investigation.
The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) asked what the Government could do. At this point, I refer back to the motion, which “calls on the Government” to do what they can and use what influence they can to bring matters to a “resolution”. The court process is happening, so the legalities will be resolved one way or another through that.
Prompted by today’s debate, I asked my officials to contact Ford UK, which they have done. We have agreed that I shall meet Ford UK early in the UK and I shall take up the concerns that have been voiced. Ford and I have agreed that the spirit of that meeting will be one of constructive dialogue. I thought the best way I could reflect the spirit of today’s debate and the many excellent speeches we have heard would be to relay in person to senior executives of Ford UK the tenor of our debate and the views of the House. Almost uniquely, we have spoken with one voice. I hope that that reassures hon. Members. In addition to what they have done by properly putting their concerns on the record again, I hope that, with our proceedings being heard beyond this House, further steps will be taken on behalf of these pensioners.
James Duddridge: I totally agree that constructive dialogue will provide the right way forward. It is what everyone has been trying to achieve ever since the first debate on the issue. If that constructive dialogue does not produce the results we hope for, will the Minister consider seeking a meeting with his opposite number in the United States to see whether any political options across the pond could be explored to encourage everyone to do the right thing?
Steve Webb: At the back of my mind is a feeling that I would not want to meet my hon. Friend in a dark alley at night. I am not sure why I have that feeling. [Laughter.] My hon. Friend put his point forcefully. Given that representatives of Ford have agreed to meet me in a spirit of constructive dialogue, I shall leave it at that for now, but we shall clearly have to reflect on what further actions could be taken.
Finally, let me reassure members of the all-party parliamentary group that I shall be happy to report the outcome of my conversation with Ford UK to their office. Obviously I do not want to raise any false hopes—Ford’s position is well known, and I do not want to pretend that it has suddenly changed—but I am trying to engage constructively with the company, and I hope that the company will engage constructively with the House.
Stephen Metcalfe: Thank you for the opportunity to wrap up the debate, Madam Deputy Speaker. I think that the relationship between Visteon and Ford has been very well explored, as has the reason for the belief of members of the all-party parliamentary group that Ford has a moral responsibility to make good the losses that have been suffered by our constituents.
We have heard from a number of Members today. The hon. Member for Aberavon (Dr Francis) drew comparisons with the way in which other companies have dealt with this issue. My right hon. Friend the Member for Chelmsford (Mr Burns) described the differences between the ways in which business is conducted on the two sides of the Atlantic. We also heard from my hon. Friend—and I do call him a friend—the Member for Swansea West (Geraint Davies), who is the vice-chairman of the all-party parliamentary group, and whom I thank for his invaluable help. My hon. Friend the Member for Maldon (Mr Whittingdale) expressed the hope that the issue would not go to court, and that is probably the feeling of the whole House. I think that if the issue did go to court and Ford were victorious, it would be a hollow victory anyway, because the company would still not have met its moral obligations.
My hon. Friend the Member for Enfield North (Nick de Bois) presented a strong argument about the links between Ford and Visteon and the continuity in the supply chain, and my hon. Friend the Member for Castle Point (Rebecca Harris) referred to Project Kennedy, which was intended to ensure that the supply chain was continuous. My hon. Friend the Member for Rochford and Southend East (James Duddridge) described Ford as a four-letter word behaving in a four-letter way. I am grateful to all of them, I am grateful to the shadow Minister, and I am especially grateful to the Minister for the efforts that he has made over the last three years. I am particularly impressed to learn that he has been in contact with Ford UK, and that a meeting is planned. That is a positive step.
The final message that I want to send to all who have listened to the debate, inside and outside the House, is that this fight will not go away. We see an injustice that has been done to our constituents, and we will carry on fighting until justice has been done.
That this House notes that, when Visteon UK Ltd was spun off from the Ford Motor Company, employees transferred from Ford’s pension scheme into the Visteon UK pension fund on the clear understanding that their pension rights would be unaffected; further notes that, when Visteon UK subsequently went into administration, now over four years ago, former Ford employees suffered a substantial reduction in their pension rights; regrets that the resolution of any court action is still some way off; believes that Ford should recognise a duty of care to its former employees and should make good the pension losses suffered by those worst affected without the need for legal action; and calls on the Government to use the power and influence at its disposal to help ensure that Ford recognises its obligations and accepts voluntarily its duty of care to former Visteon UK pensioners.
