Theresa May has has said she will prevent employers from profiting while their workers’ pensions are put at risk, after it emerged that the collapse of construction firm Carillion could leaves its pension scheme in deficit by as much as £900m.
Writing in The Observer, the Prime Minister announced a white paper to set out “tough new rules” for company bosses, new legislation to protect so-called defined benefit schemes and sanctions for directors who “raid” company pension pots.
Yet she stopped short of condemning the use of the private sector to complete public projects, arguing the system could deliver better public services.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
SUBSCRIBE & SAVE
Sign up for The Week's Free Newsletters
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Join more than 350,000 subscribers and keep yourself informed with a selection of The Week’s most interesting, enlightening and entertaining stories - plus daily puzzles.
Latest Videos FromThe Week
Carillion went into liquidation last Monday, swamped by debt and pension liabilities of at least £2.2bn. Its more than a dozen pension schemes, which collectively have 27,500 members, will transfer to the Pension Protection Fund, “leaving many members who are below retirement age facing a cut in their pensions”, says Reuters.
However, tough talk and the promise of new measures to protect pensions were denounced as too little too late by opposition MPs.
The shadow attorney general, Baroness Chakrabarti, told the BBC’s Sunday Politics: “It’s all very well for Mrs May to now say she's going to sting these executives but there's got to be a bit of ministerial responsibility in all of this as well.”
“What we need is oversight.” she added. “Of course we want a thriving private sector, but some vital services need to be run by public servants and with ministers held to account.”
The management of pension schemes, and the perceived lack of protection and security, “has caused a public outcry in recent years”, says the BBC, citing the £571m deficit left after the collapse of BHS.
