MP accuses overseas companies of robbing local pensioners

2.47.38pm BST (GMT +0100) Fri 26th May 2006

When the Secretary of State made a statement in parliament yesterday on the government's long term pension policy, MP Vincent Cable challenged him to investigate serious abuses of occupational pension schemes by American companies who are contriving temporary financial cases in their British subsidiaries, temporarily bringing in pension trustees from the US headquarters in order to expunge their responsibilities to UK pensioners. He cited the cases of EMC and Parsons (in Brentford) which both have local residents who have lost all or most of their pensions in this way.

Hansard extract

Dr. Vincent Cable (Twickenham) (LD): Will the Secretary of State investigate an alarming practice involving occupational pensions? Overseas companies, such as Parsons Engineering and EMC Engineering in the United States, are effectively defrauding their British pensioners by contriving an arrangement whereby they temporarily liquidate a British subsidiary, expunge their pension liabilities, offload them on to the

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British taxpayer and resume normal business, including the winning of large Government contracts.

Mr. Hutton: I should be happy to look into that if the hon. Gentleman would like to come and see me.

Vincent Cable said: "there is enormous frustration amongst local employees of these highly profitable companies that their employers have pulled a fast one and cheated them of their pensions using clever but immoral legal dodges. I have asked the Treasury to find out why these companies are being given big UK government contracts and I am asking the pensions secretary of state to intervene directly. He has invited me to meet him and I am hopeful that this kind of practice will be stopped".