May sets out plans to protect pensions during takeovers

Theresa May
Theresa May

British Prime Minister Theresa May

:: British Prime Minister Theresa May pledged to protect workers against irresponsible practices over pensions on Sunday, promising new regulations on how schemes are handled during corporate takeovers.

May’s Conservative party will give regulators the power to examine takeover proposals that threaten the solvency of a company pension scheme and the regulator could be empowered to block takeovers if it is not satisfied with the arrangements.

May set out the policy ahead of an election June 8. So far her pitch to voters has been based around trusting her to deliver Brexit, with parties yet to publish detailed policy plans.

“Today I am setting out our plans, if elected, to ensure the pensions of ordinary working people are protected against the actions of unscrupulous company bosses,” May said in a statement. “Safeguarding pensions to ensure dignity in retirement is about security for families.”

The pledge comes after high-profile cases such as that of BHS, a retailer which was sold by billionaire Philip Green for one pound to a man who had been bankrupt before with no retail experience.

Green plugged a pension hole in the now-collapsed group with $451 million earlier this year, following severe criticism over his conduct and calls for his knighthood to be removed.

The Conservative’s plans could also see regulators block unsustainable dividend payments that threaten a pension scheme’s solvency, and directors who are found to have willfully left a scheme under-funded could be fined or even suspended for a period of time.

May said that she would not increase value-added tax (VAT) if her party was elected but the prime minister did not extend the same promise to other major taxes.

Speaking in her first television interviews of the election campaign, May said her party had no plans to raise the overall tax level and that she would not raise VAT, a form of consumption tax that now stands at 20 percent.

“We will not be increasing VAT,” she told ITV’s Peston on Sunday show. “If you look across what we want to do on taxes, we have no plans to increase the level of tax, as I say it is the Conservative Party, we are a party that believes in lower taxation.”

But, she refused to recommit to a 2015 election promise made by her predecessor David Cameron not to increase VAT, income tax, or National Insurance — an employment tax — until 2020.

May’s finance minister, Philip Hammond, has argued that the 2015 tax pledge had limited his ability to manage the economy.

Britain’s deficit is expected to rise in the 2017/18 financial year, as one-off factors that helped the government last year — such as changes in the timing of payments to the EU budget and the impact of changes in dividend taxation — unwind.


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