The Pensions Regulator (TPR) has provided little evidence of hard action despite being aware of problems at Carillion since at least 2008, Work and Pensions Committee (WPC) chairman Frank Field has said.
Commenting on the watchdog's response to its initial queries on Carillion, which has just been published, Field said: "TPR's investigation is much too late for the pensioners, who will inevitably now receive reduced benefits through the Pension Protection Fund (PPF), and too late for the PPF levy-payers, who will pick up the tab.
"TPR has been aware of problems in Carillion since at least 2008 but there is little evidence of any hard action. As recently as September 2017 TPR waved through an apparently bust company's request to skip pension contributions so it could keep borrowing. In the end Carillion continued burning money until there was next to nothing left.
"This tentative and apologetic approach does not cut the mustard. We've made proposals - such as nuclear deterrent fines for avoidance - to strengthen the hand of pensioners. They need legislation - not words - from government to sort this out."
Separately, Field said evidence from Carillion trustee chairman Robin Ellison shows that Carillion has been "trying to wriggle out of its obligations to its pensioners for the last 10 years".
In his response to Ellison's letter to the WPC (published earlier today), Field said: "It's clear that Carillion has been trying to wriggle out of its obligations to its pensioners for the last 10 years.
"The purported cash flow problems did of course not prevent them shelling out dividends and handsome pay packets for those at the top. This culminated in negotiating deficit contributions away entirely last autumn to enable more borrowing. Remarkably, this was endorsed by the trustees and TPR."
He added: "Once again, TPR has questions to answer. They have been sniffing around Carillion - at the trustees' behest - since at least 2008, though it is not apparent to what effect.
"When 10 years later the company collapses with £29m in the bank and £2bn in pension liabilities, it doesn't look good for them."
Field's comments come as the WPC and Business, Energy and Industrial Strategy (BEIS) Committee prepare to open oral evidence in their joint inquiry into the collapse of Carillion tomorrow.
The committees are investigating how a company that was signed off by KPMG as a going concern in spring 2017 could "crash into liquidation less than a year later".
Tomorrow's evidence will include a session with the Financial Reporting Council and the Insolvency Service, which will examine the background to the collapse of Carillion and whether regulators had the necessary powers to prevent it from occurring.
It will also include a session with the pension trustees, which will explore the steps taken by the company, trustees and regulator to support and protect the pension scheme, and whether changes to the regulatory framework would have resulted in a better outcome for the scheme members and the PPF.
On 6 February, the Committees will hold an oral evidence session with former Carillion directors.
Professional Pensions will be providing full coverage of the inquiry at https://www.professionalpensions.com/tag/carillion/
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