The Work and Pensions Committee’s probe into the closure of the defined benefit schemes of Anglian Water and United Utilities has been welcomed by Unite.
The UK's largest union said it was “angry” at that the firm’s “huge profits” have been skewed towards the shareholders, “thereby greatly eroding their employees’ retirement incomes”.
Last month Committee Chair Frank Field wrote to the utilities regulator, Ofwat, questioning both firm's proposed closures, when Anglian Water has a pension deficit of just £86m and United Utilities a surplus of £220m.
Unite acting national officer for energy and utilities, Peter McIntosh, said: “Frank Field is on the right track in demanding that Ofwat gives clear answers as to its stance on these defined benefit scheme, aka final salary, closures.
“It is clear that the financial rationale of these water companies is tilted far too heavily in favour of short-term gains for the shareholders and not enough emphasis on the price needs of the hard-pressed consumer; the requirement for substantial investment in the infrastructure; and the safeguarding of retirement incomes for dedicated workers.”
Field brought to light that in the five years to March 2017, after tax profits at Anglian Water and United Utilities both totalled at £1.6bn. In this same period both firms paid out £0.8bn and £1.2bn in dividends to shareholders, respectively.
McIntosh said that “a line in the sand” must be drawn before the pensions of thousands of workers are eroded.
Recently, 1,000 Unite members employed by United Utilities in the North-West of England took industrial action due to the closure of the scheme on 1 April 2018, which is to be replaced by a hybrid scheme.
Unite has warned that some workers will see their pension reduced by up to £100,000.
Last month, the CEO of Anglian Water has told unions to ballot for industrial action, as he is not prepared to attend any meetings with Acas, over the closure of its defined benefit pension schemes.
Trade unions GMB, Unite and Unison said that in a meeting with Anglian Water CEO Peter Simpson on Thursday, 8 March, in which they sought to involve the mediation services of Acas into future meetings, CEO Peter Simpson refused the idea.