Industry belongs to pension scheme members, says Field

PENSION scheme members should be made to feel they own British industry, Frank Field, the Labour MP who chairs the House of Commons Social Security Committee, said yesterday.

Speaking at the National Association of Pension Funds investment conference in Eastbourne, Mr Field said: 'There's a uniquely important task of making people think that British industry, in a very real sense, is theirs.' At the moment, he said, 'people feel they own their pension scheme about as much as they feel they own British Rail or British Coal. It's near zero.'

Mr Field pointed to the improvement in the upkeep of council house property sold to its tenants. He said the effective ownership of pension funds would be one of the big issues in the next election, and its importance was recognised by a majority of the social security committee.

Although keen to see private pension provision spread further, Mr Field was critical of the so-called final salary schemes that have traditionally been the bedrock of the pensions industry. He said final salary schemes, which promise a pension based on salary at the time of retirement, was 'one of the great confidence tricks'.

The reason why some pensioners received such good benefits was that the industry had treated early leavers so poorly, he said. 'The industry has been very tough on people who have failed to complete the course. I shall not shed buckets of tears for final salary schemes whose demise is occurring anyway.'

Britain was unlikely to see large employers setting up new final salary schemes, Mr Field said. He also called for companies to cease the run-down of pension surpluses as soon as possible. He said the related tax issue should be set aside.

Sir Lewis Robertson, the company doctor, yesterday told delegates that he was increasingly persuaded of the merits of two-tier boards and would like to see the issue debated more widely.

Sir Lewis, who is chairman of Stakis, the hotels group, said he feared that the Cadbury code on corporate governance imposed too much responsibility on non- executive directors. He said: 'I believe the whole thrust of Cadbury is straining at the limits of what can be done by and contained within a single-tier board of the UK type.'

He said he had moved to the concept because of experience and the rationale of the corporate governance debate. He saw a two-tier board as an opportunity to introduce 'a supervisory board as a council of elders, responsible certainly for the important issues of audit, remuneration and succession which Cadbury highlights, but also as a detached, impartial, informed, committed body, well placed to take the longer view and to oversee the horizons of policy and of development in all aspects'.