Mr Alistair Carmichael
MP for Orkney and Shetland · Liberal Democrat · United Kingdom
“I do not know whether this is something I still need to declare, Mr Speaker, but I visited the Falkland Islands in 2003 as a guest of the Falkland Islands Government. They have never invited me back.”
“I remind the House of my entry in the Register of Members’ Financial Interests and also that my wife is a practising veterinary surgeon. What is happening was predictable because it was predicted. The Government were warned by the National Audit Office in June last year that they were unprepared for outbreaks of this sort.”
“The Minister is surely aware that there is no route to net zero that does not go through oil and gas hydrocarbons, and that not exploiting resources on the UK continental shelf leaves us reliant on imports, which also has carbon consequences that must be taken into account.”
“The transition to clean energy could be an opportunity to build a different model that would, to use the First Secretary of State’s own words, end “overly centralised decision making and over-privatisation”.”
“I welcome what the Prime Minister just said about strengthening farming. If he is serious about this, one of the first things he can do is ensure that our farmers do not have to compete with imported food that is produced to lower standards than we expect.”
“Q4. Like others, I have always respected the Prime Minister as somebody who was in politics because he wanted to give service to his country, and he has earned our gratitude for that. In my constituency, those who volunteer as coastguard rescue officers also do so from a wish to give service to their community.”
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“He goes on: “This episode may affect public trust when the Government sets targets and announced whether they have been met in the other policy domains.” Will the Leader of the House make time for the Prime Minister or the Home Secretary to come to the House and explain why, yet again, they have had their knuckles rapped for their use of statistics?”
“The House will recall that on 2 January the Prime Minister posted on X: “I said that this government would clear the backlog of asylum decisions by the end of 2023. That’s exactly what we’ve done.” In fact, it was pretty soon apparent that they had done nothing of the sort, with more than 4,500 legacy applications still awaiting a decision. Accordingly, I took the matter to the UK Statistics Authority to seek its guidance, and this morning I received this reply from its chair, Sir Robert Chote: “The average member of the public is likely to interpret a claim to have ‘cleared a backlog’—especially when presented without context on social media—as meaning that it has been eliminated entirely”.”
“Is the Minister aware that Zeyno Baran of the Hudson Institute has observed that the British chapter of Hizb ut-Tahrir is the “nerve centre” of the international movement? As is so often the case when dealing with terror organisations, the responsibility to protect our own citizens extends to citizens in other countries as well.”
“Let us not forget that a spiral emerges here: we see the growth in antisemitism and antisemitic hate crime, but that in turn produces a growth in Islamophobia. So we do not proscribe Hizb ut-Tahrir in the interest only of Jewish communities, but in the interest of Muslim communities as well. The tackling of extremism, of which that is just part, has to be at the heart of finding a long-term and sustainable way of approaching the issue. I encourage the Minister to speak again to his colleagues in the Home Office, in particular about the Prevent strategy. We know what we want it to achieve but, as we view it today, I have serious concerns about its ability to deliver what we need it to do.”
“Obviously, it is important to take this step as part of our domestic legislation at the moment, because not to do so would send the worst possible signal to those in the Jewish communities who have felt so embattled since the events of 7 October. I hope they will take some comfort from the fact that action of this sort has been taken against those who have preached, and done more than preach, antisemitism. However, there is a wider legislative context. As important as it is to proscribe organisations like Hizb ut-Tahrir, that is only part of a bigger plan. It seems that many of the other tools in that fight, such as the Prevent strategy, are not achieving the goals we need them to achieve. They are overdue for a proper root-and-branch review.”
“Whether to proscribe Hizb ut-Tahrir is not a new debate; it has been going on for a considerable time. I think it was back in 2011 that David Anderson, the Government reviewer of terror legislation, advised against proscription on the basis that the group was not advocating violence. Clearly, we are in a different situation today, but I mention that because I feel slightly conflicted about the speed with which we have moved. We should be slow to ban any organisation because, as a society, it is not something we should do lightly. However, once the evidence is there, as it clearly has been for some time and as it has been in relation to the IRGC, then, as the hon. Member for Barnsley Central (Dan Jarvis) said, that raises questions about whether our processes for making such decisions are adequate.”
“I place on the record my support, and that of my party, for today’s measure. The right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) gave a lot of important international context, particularly in relation to recent events in the Red sea and in Yemen. I will spare the House a repetition of what he said. I simply place on the record the fact that I very much endorse his analysis of what is going on there, not least because it brings into sharp relief the role of the IRGC. As others have said, it seems as if the focus of our attention must now turn in the direction of the IRGC. If it is any consolation to the Minister, I think it has emerged from today’s debate that a consensus to proscribe the IRGC would be easily constructed.”
“Indeed, the Select Committee on Work and Pensions has recently taken an interest in it, because of the experience of pensioners who are beneficiaries of schemes such as BP’s, and Shell’s scheme is another. Although there are differences in the terms of the trust deed for the Shell scheme, the outcome in terms of the beneficiaries is that they are actually in lockstep with each other.”
“Some had a particular commitment to prosecution and to public service, but they also had an understanding that as members of the civil service with a final salary scheme, a defined-benefit scheme, they would trade that off against the higher salary that they could have got when they were working. It is worth noting in passing in relation to the BP pension scheme, about which I will speak later, that when BP closed its scheme to new entrants, it compensated for that with a 20% increase in salary for those who were still in employment. When we anticipate a change, we always recognise that there is a greater importance of maintaining benefits for those who are in a later stage of their career. This is currently coming to my attention and to the attention of many right hon. and hon. Members.”
“The relevance of that is that when we anticipate changes in the way in which pensions are to be provided, we have to make allowance for the fact that people will have made decisions in their life about how they are going to provide for themselves at a later stage in their life. Thirty years ago, I was a part of the established civil service. I was a prosecutor, a procurator fiscal depute, working at the Crown Office in Edinburgh. I worked with many talented lawyers who were able to do remarkable things as prosecutors, and most of them would have been able to command much higher salaries had they worked in private practice. They did not do so for a variety of reasons.”
“The Institute and Faculty of Actuaries, in a briefing provided ahead of today, says: “This is a particularly broad and complex topic”— a warning that I think we should all be willing to take. I am not much given to dealing with broad and complex topics, especially where hard sums are involved. I always take a fairly simple view of these things, and when it comes to pensions, some things are worth bearing in mind and never losing sight of. The first of those—I will come back to this point in a minute—is that a pension is in effect a matter of contract between an employer and an employee. It is, in other words, simply salary paid at a later stage in the employee’s life.”
“I beg to move, That this House has considered the regulation of defined benefit pension schemes. After the heat of the debate on High Speed 2 that has just ended, I hope that we might be able to generate a little more light. The subject of defined-benefit pension schemes and their regulation does not always lead to that sort of excitement, important though it undoubtedly is. I suppose that in speaking about defined-benefit pension schemes I should declare an interest. Defined-benefit pension schemes, many of which are of course final salary schemes, were what people like me were part of when we were first elected to serve here. Then, in about 2011 or 2012, I think, we moved to a career average earnings scheme.”
“It absolutely does. Representing a constituency that had the Sullom Voe oil terminal managed by BP for many years, I suspect that the reasons why the hon. Gentleman has Shell pensioners in his constituency and I have BP pensioners in mine are very similar.”
“As those pension funds come to a point of greater maturity, the concern that we hear from BP, Shell and other pensioners is that decisions are being taken not in relation to their best interests, which is the primary fiduciary duty of the trustees, but because of other concerns. There is a significant number of significant issues for the Government to look at in relation to pension regulation, not least of which is the balance between the companies that have created these pension funds in the first place and the independence of the trustees.”
“The hon. Gentleman strikes at the reasons why I brought forward this debate. We might benefit from a wider and longer ventilation of the issues at some later stage, but we have 30 minutes today, so let us use it. I had the opportunity to discuss the issues yesterday with the Minister, and he is alive to the concerns. When it comes to regulating pensions, and indeed other similar financial provisions, the law of unintended consequences is never far away. The Government are right to be cautious, but they have to be alive to the fact that this is an emerging crisis. What happens to the beneficiaries of the BP and Shell pension schemes today could happen to just about any pensioner the future.”
“And how would you feel when the man responsible for this assault is claiming to be a champion of mental health and to care about people?” That is the human cost of the decisions that BP has taken and continues to take. BP and Shell are just the canary in the coalmine; what happens to them can happen to others. That is why this is a matter to which the Government must now pay the most urgent attention.”
“One came from a pensioner who said: “In the 1990s, BP introduced an option for staff to put 15% of their salary into accruing pension at a faster rate which I did because my wife had no pension of her own. It was not an easy decision as we had just started a family and money was very tight.” The other one that really jumped off the page for me was from a pensioner who had 20 years’ service with BP working in IT. They said: “I am dying from cancer and emphysema, suddenly I am informed by bp that my widow and family will no longer be protected from inflation in the way I had always believed. Now please tell me how you would react if your loved ones came under attack in this way.”
“It is worth reflecting on the fact that BP has announced that its new chief executive will be Murray Auchincloss, who, as chief financial officer, was the author of many of these decisions. Mr Auchincloss will enjoy a salary of £1.4 million plus a variety of other benefits in kind. I have not had the time to work out exactly what those other benefits will be, but when BP sacked his predecessor, it clawed back £32 million, never mind what it paid him. It is fair to say that Mr Auchincloss, and probably Mr Looney too, will have to go some way before they are eligible for universal credit. The final word in this debate should go to the BP pensioners themselves. Some truly heart-rending contributions have been quoted to me.”
“If it pays something during a person’s working life, it should be prepared to accept the logic that it should pay that at the end of a person’s working life and into retirement. The funding ratio of the BP pension fund at the moment stands at 132%. If it were to meet the extra 4% this year, the funding ratio would still stand at 129%. There is no reason, from the position of the fund, why that should be regarded as an unsustainable payment, but of course it would make an enormous difference to the beneficiaries—the pensioners themselves. BP has generally had a well-funded and well-managed pension fund. From 1990 to 2020, it made virtually no extra payments to the pension fund at all.”
“It has referred me to the funds made available for payment from its Helios fund, which is effectively a lump sum payment of £2,500 for people in receipt of a household income of less than £30,000. Again, we are breaking the link between the former employer, the salary and the pension recipient. Pensions are not charitable hand-outs; this is money that people have earned in the course of their working life. BP seeks every step of the way to play one group off against the other. It plays the defined-benefit recipients off against the defined-contribution recipients. It says, “We are a multinational company and we have liabilities to pensioners in other parts of the world.” It absolutely does, of course, but it pays people different salaries in different parts of the world.”
“I hold very much to that view, which is why I think this House is right to highlight what BP has done. As I said, it could happen to others. Fast forward to 18 months ago when BP first withheld consent for a pension increase according to the retail prices index: inflation then was at 7.5%, but it agreed to a 5% increase only six months ago when inflation was at 13.4%. The net effect of that was a 11% decrease in the pension value received by the beneficiaries. The oil industry obviously has a reputation for high salaries, but it is worth bearing in mind that the average pension paid out by the BP pension fund is only £18,000. BP’s defence is quite revealing.”
“It continues: “In times of high inflation, this would be a valuable underpinning to the purchasing power of your pension.” This material was given to BP pensioners then. Underneath those words, the benefits of scheme membership are listed: “The security of a large well funded arrangement…A pension linked to your earnings at, or close to retirement, part of which can be taken as a lump sum…Guaranteed increases to protect the value of your pension over the years of your retirement”. It was on the basis of undertakings such as those given by BP to its employees that many of them made the decisions they did for their future provision. That is why, when I questioned the Minister on this in the Chamber last month, I said that BP was effectively dealing from the bottom of the pack.”
“Over the years, however, BP has made significant undertakings to its employees and pensioners, a number of which I have had the benefit of considering. As far back as 1996, there was a Pension s News for BP’s pensioners, which stated: “It is important to remember that the BP Scheme guarantees pension increases equivalent to the annual increase in the Retail Prices Index (RPI) up to 5% and the Trustees, with the agreement of the Company have stated that they intend to follow a policy of increasing pensions in line with RPI wherever possible even when this exceeds 5%, so long as the BP Pension Fund has sufficient resources to permit this.” I will come back to the resources question.”
“If the pension fund is owned and administered by an insurance company, for argument’s sake, where will that relationship be and how will that impact on the outcome for the beneficiaries? I raised that question in discussion with BP yesterday. Incidentally, BP has eventually come to talk to me about this, but it is still not talking to its pensioners. If BP is to avoid the reputational damage that could come from this, it would be well advised to spend time talking to its pensioners and employees in a meaningful and serious way, which it has failed to do thus far. The BP pension fund was established 95 years ago. It has 58,000 members and 42,000 pensioners in payment, 30,000 of whom are more than 70 years old. BP closed access to the defined-benefit scheme in 2010 and closed it to new accruals by existing members in 2021.”
“For example, the majority of members should be demonstrably independent rather than, in our case, the majority being company employees. They also need to be expert. Some of them have only been hired by BP two years ago and they are now trustees of the Pension Fund. They know very little about pensions, whereas they replaced people with 12 years’ experience. Expertise is a very big deal.” It is pretty clear that these problems and pressures will become more acute. It is widely believed by BP’s beneficiaries that it wants to reduce the level of outgoings from the pension fund so that it will be a more attractive prospect for being hived off, perhaps to an insurance company or others. Such things are legally possible, but it comes back to the relationship between the employer or former employer and the employee or pensioner.”
“He said: “We checked the pension fund company’s annual returns to Companies House the other day and found that for the first time ever, they had added some words saying the duty of the directors, among the normal things you would expect, was also to maximise BP’s long-term shareholder value.” As a trustee, that is a quite remarkable addition to the trust’s purposes, because the fiduciary duty is the duty of utmost good faith to the beneficiaries. If there is a conflict between the beneficiaries and the company, the trustees’ duty is to protect the interests of the beneficiaries. Nick Coleman went on: “We are saying that the solution here is to somehow reinforce the requirement that trustee boards are demonstrably and fully independent.”
“That is why it is so important that when we talk about this issue, we hold right at the top of our minds that this is a matter of contract between the employer and the employee. If they were still working and receiving this money instead of receiving it as a pension, we would not tolerate it. If it is not a good enough way of dealing with somebody’s salary, it is not a good enough way of dealing with somebody’s pension. When Nick Coleman from the BP Pensioner Group, who provided me with an invaluable briefing in the last few weeks, gave evidence to the Work and Pensions Committee, he touched on the point about the relationship between the trustees and the company, and the independence of the trustees. He produced something that, frankly, shocked me and shocked Committee members as well.”
“I almost entirely agree with my hon. Friend. The way in which the BP pension fund works is that the trustees have virtually no discretion up to 5%, and then from 5% to 9% there is a discretionary level. In the last year, the BP trustees recommended 9% but the company refused to pay it. I can see that there might be good reasons why a company does not want to be tied to that discretionary level, but there must be a reason for refusing to pay it. As far as I can see, the BP and Shell response has been, “No, we don’t need to give you a reason.” They play off defined benefit against defined contribution; they play off against pensioners in other parts of the world because they are transnational corporations; and they come up with other points.”
“I agree with most of what the Minister is saying, but there is something more that comes into play here, which is the question of light-touch regulation. Light-touch regulation only works if it is possible to proceed on the basis of good-faith acting by both parties, particularly the companies. Where there is evidence of the lack of good-faith acting, as we have with BP and Shell, is it not necessary to adjust the system to ensure that at the end of the day the beneficiaries are not suffering as a consequence?”
“While we are on energy prices, I am acutely aware that, as we speak, pensioners in my constituency are having to brave serious snow conditions and, because we have the highest level of fuel poverty anywhere in the country, they will feel literally and metaphorically out in the cold. Does my hon. Friend agree that Ofgem has a role to play in the creation of a social tariff, or even a geographically-based tariff?”
“9. Whether the committee has had recent discussions with the Electoral Commission on the potential impact of increased electoral party spending limits on the democratic process.”
“The Daily Mirror reported at the weekend that the Conservative party is already spending more on the Prime Minister’s Facebook page and adverts than Donald Trump is spending on his, so the motivation for doubling the party spending limits is pretty clear already. If this cannot be stopped, can the commission at least do more to increase transparency, so that people can see this shoddy attempt to buy democracy for what it is?”
“We do know a few facts here, and one of the facts we know is that the scheme has been in the making for 18 months. In that 18 months, the money that has been spent on it would have employed 6,000 caseworkers in the Home Office. Might that not have been a better way of proceeding?”
“The Secretary of State is absolutely right to point the finger at the Houthis, but we should not ignore the role of Iran in this enterprise. What are he and the Government doing with our international partners to ensure that the merchant marine have the confidence to keep using the Red sea, which is critical to the smooth operating of world trade?”
“The Minister has heard from me previously about the difficulties faced by the executors of my constituent, who was a victim of this scandal and has subsequently died. Ultimately, the difficulty with my constituent’s case was that she had been putting in her own money to make up shortfalls and the executors did not know how much they should settle for, because the Post Office itself had no idea what the proper sum ought to be. In such circumstances, what can the Government do to ensure every victim of this scandal gets the full compensation to which they are entitled?”
“The Minister will be aware of the frustration that is felt by many farmers and crofters in Scotland that the £33 million that was given to the Scottish Government for a specific purpose as part of the Bew review has been deferred hitherto. What will she do in future to ensure that where money is given for the express purpose of supporting Scottish agriculture, it is in fact used for that purpose?”
“Will the United Kingdom Government urge the Government of Israel to ratify the Rome statute and thus become a state party to the International Criminal Court?”
“16. Whether he has had recent discussions with the Pensions Regulator on the adequacy of the administration of defined-benefit pension schemes.”
“Members of the BP pension scheme, a defined-benefit scheme, have seen the value of their pensions fall by 11% in real terms as a consequence of their senior management’s refusal to upgrade them in line with the cost of living, although the pension fund itself has a £5 billion surplus. Does the Minister agree that if the rules allow companies such as BP to deal from the bottom of the deck when it comes to their own pensioners, these are rules that need to be changed?”
“The Minister will be aware, I hope, that Timothy Owen KC, who is part of Jimmy Lai’s defence team, is currently in Hong Kong but, because of the failure to give him a visa to deal with Jimmy Lai’s case, is not able to appear for Jimmy Lai. Will she make representations to the local authorities as a matter of urgency saying that surely the right to appoint counsel of one’s own choosing is a fundamental in any fair legal system, and that we would expect that opportunity to be given to Mr Lai?”
“8. If he will make an assessment with Cabinet colleagues of the potential impact of the UK emissions trading scheme on domestic ferry services.”
“I am grateful to the Minister for that answer. He may be aware that there are many in the shipping industry who are concerned that including lifeline ferry services, such as those that serve my constituency, in the emissions trading scheme could hinder rather than help the process of decarbonisation. The EU has already recognised that by giving its lifeline ferry services a derogation until 2030. Will the shipping Minister—I know it is not this Minister’s responsibility—engage with operators in Scotland and elsewhere to ensure that we are not hit by the law of unintended consequences?”
“I am not always Scottish and Southern Electricity Networks’ biggest fan, but it really put in a shift along with council workers, the coastguard and other emergency services. It did a remarkable job in getting people connected back to electricity and making sure that those in the more hard-to-reach parts of Shetland were properly cared for. Such events are occasional but not unknown. As we all suffer more and more catastrophic weather events in future, we have to assume that there will be a growing pattern of disruption for which the new system, when it is introduced to us, has to be fit for purpose; at the moment, with the lack of battery powered back-up, there simply is not that. Having a telephone line that we can plug in to the socket at the wall is very often the only means of communication left to people in such circumstances.”
“It predominantly causes concern in rural communities because, in the switchover from analogue to digital communications, we have been the ones who have constantly been left behind—although I know that there are also urban communities that will be affected. In Shetland and Orkney, our particular concern is around the resilience of the digital system—the fibre-optic system to which we will be transferred. For people in London, Edinburgh and Glasgow, power cuts are significant events because they are so rare. For us they are just part of everyday living, especially in the winter months. Occasionally we suffer catastrophic weather episodes such as we had last December, when parts of Shetland were left without electricity for six days.”
“It is apparent from the communications that I have with the industry and my constituents that the private companies are focusing on what matters to them rather than the needs and wishes of their customers and the communities we are elected to serve. The Government, after having made the decision that the switchover should be led by the industry, now have to step up to the plate, take charge and make sure that it is done properly. We have until the end of 2025 to get this right, but in terms of Government policy and given that there will be a general election in that period, we know that that sort of timescale can pass in the blink of an eye. This matters to people throughout the United Kingdom.”
“I beg to move, That this House has considered the withdrawal of copper wire telecommunications networks. It is a pleasure to serve with you in the Chair, Mr Mundell. Sometime ago the Government decided that the copper wire network—the analogue service—would be switched off in about December 2025. I can understand the reasoning behind the decision that the switchover would be industry led. We can see the sense in that, given how the telecommunications market operates these days. We have come some way from the days when everything was held under the General Post Office, which was the responsibility of a Government Minister. Although I understand the logic, I am afraid I have to bring a fairly simple and blunt message to the Minister this morning: it simply is not working.”
“(This rather desperate advice was pretty hopeless, but more hopeless given road condition)…I need to emphasise that during this week an analogue phone with self-powered phone line was THE critical means of external contact with the outside world other than listening to the news on a battery-powered transistor radio.””
“I absolutely do. By way of illustration, I received an email from a constituent in Walls, in the west side of Shetland, describing what life was like for him, his family and his neighbours during the six-day power outage last year. He said: “Power was down…Internet was down…Heating was down (Our house has a gas cooker thank goodness)...The roads were impassable to cars for most of that period. 4x4 pick-ups could get through latterly into the week…The local shop was closed because it needed power to price items…Advice from the emergency services was that in the event of an emergency we were to wave down a passing police car.”
“You need to move into the town or come and live with us.” In that way, choices expected to be available to people in other communities are taken away from ours, which becomes denuded of people who want to remain there. Finally, I get a steady trickle of complaints about one particular issue. I cannot yet say that this is a business practice, though it appears it may be, and we need to get to the truth: people tell me that they have had their analogue line switched to a digital line by BT, without being told what was happening and without proper consent being obtained. The undertakings we get from BT are in relation to vulnerable people and all people over 75. As I said, I cannot yet say that this practice is widespread, but I do see a trickle of these complaints coming in; my caseworkers deal with them and it causes me concern.”
“There are particular concerns about availability for older people in these communities who rely on telecare services—for instance, pendants that they can press when they are in difficulty. My father, who is now living on his own at 92, has a little box that sits in the corner of the room, and just when it is least expected—at about 6 o’clock at night—a rather bossy voice booms around the room, saying, “Have you taken your pills yet?” These are examples of the ways in which we are able to help people who want to remain in their own home to do so, in communities like the one I represent. Without the availability of these services, we know what will happen. The families who live closer or elsewhere in the country will quietly, one by one, say, “Come on, you can’t continue to live here.”