Prime Minister May pledges the government will protect workers' pensions from greedy executives
The government will stop workers’ pensions being put at risk from “executives who try to line their own pockets”, the prime minister has said.
In the Observer, Theresa May said a government white paper would set out “tough new rules” for company bosses. It comes as construction firm Carillion’s collapse could leave a pension scheme deficit of £900m, potentially affecting 27,500 workers.
She also defended using the private sector to complete public projects. In her comment piece, Mrs May stressed that it would be Carillion shareholders, not taxpayers, “who pay the price for the company’s collapse”.
She said the government would not be writing the company’s directors a blank cheque, but would be “stepping in and supporting those affected”.
It was earlier reported that Carillion’s defined benefit pension schemes has a deficit of £580m, although this figure could be as high as £900m.
Defined benefit schemes (DB) are based on either a worker’s final salary, or their career average earnings.
In March the Department for Business is expected to release a White Paper detailing new legislation on protecting DB schemes.
The management of pension schemes, and its perceived lack of protection and security, has caused public outcry in recent years.
Last year former owner of BHS Sir Philip Green came to an agreement with the pensions regulator to pay back £363m into the pension scheme for the company.
Following the collapse of BHS it was found that there was a £571m deficit in the pension scheme.
‘Private sector’s valuable role’
Despite the recent collapse of one of the government’s biggest private contractors, Mrs May defended the government’s use of public-private partnerships.
She said the “private sector plays a valuable role helping the public sector”.
The collapse of Carillion, which employed 43,000 staff globally, has left many questioning what will happen to several high-profile public services and infrastructure projects.
The construction firm was in charge of completing the new £335m Royal Liverpool Hospital, and the £350m Midland Metropolitan Hospital in Sandwell.
Both completion dates were delayed by the company.
She added Cabinet Office minister David Lidington had “acted swiftly” to co-ordinate the government’s response to Carillion’s collapse, which has put a number of high-profile public services and infrastructure projects at risk.