Torsten Bell

I am pleased that my hon. Friend the Member for North Durham (Luke Akehurst) has secured the debate on this important matter and thank him for the thoughtful way in which he described the impact on his constituents. He spoke on behalf of many others as well, and in particular those members of the Nissan pension scheme. I join him in praising the persistent campaigners on this issue. He mentioned one organisation in particular—I have met its members, who have been campaigning for many years and have not shown any let-up in their energy during that time. A period of high inflation and the return of many defined-benefit schemes to surplus has rightfully put up in lights of the situation of members whose pre-1997 benefits are not protected by statutory indexation. That wider debate has rightly featured heavily during the passage of the Pension Schemes Bill. It was also discussed by the Work and Pensions Committee prior to the election. As my hon. Friend said, it was considered in some length here when we debated new clause 22, when we heard many powerful speeches, including from my hon. Friend the Member for Llanelli (Dame Nia Griffith). The right hon. Member for Hereford and South Herefordshire (Jesse Norman), as he said, has been raising the issue for many years, and I have also discussed it with the right hon. Member for New Forest East (Sir Julian Lewis). I have met many scheme members and their representatives. Recently my hon. Friend the Member for Llanelli and I met three members in Swansea to discuss exactly this issue in a lot of detail. I was grateful for their time and to her for organising that discussion. I have listened, and I recognise the difficulties faced by some scheme members who can now see their income, their living standards and the quality of their retirement eroded by inflation, as my hon. Friend the Member for North Durham said. It is particularly understandable that members are disappointed when schemes do not award discretionary increases when they are in a strong funding position—that is obviously the change that has happened over the last few years. As my hon. Friend will know, defined-benefit pension schemes have very different approaches to awarding pre-1997 indexation. The truth is—obviously, we will not be discussing these schemes at length today—most do provide for increases under their scheme rules; others do not allow it or require it at all; and a significant number allow discretionary increases only where there is agreement between both trustees and the sponsoring employer. Those are the cases that we are mainly focusing on in this debate. The result is that, in some cases, when employers are unwilling to support discretionary increases —even when the scheme is in a strong funding position—trustees can effectively be prevented from acting.