House of Commons Hansard Debates for 25 Jul 1997 (pt 23)

2.44 pm

The Economic Secretary to the Treasury (Mrs. Helen Liddell): I congratulate my hon. Friend the Member for Edmonton (Mr. Love) on his success in securing this debate, which is of great interest to many of my hon. Friends. I congratulate him also on his truly superb speech, which has put the issue in context. He is right to draw attention to the fact that no Conservative Members are present to discuss an issue that affects 600,000 people in the short term, and possibly 2 million more. Perhaps it is a measure of the Conservatives' guilt, or their lack of concern for the many innocent people who were duped as a result of legislation introduced by the previous Government.

My hon. Friend is right: the previous Government created a climate in which it was acceptable to rip people off by selling pension products. He is right to draw attention to the expensive advertising campaigns that were launched. He is correct also to draw attention to the previous Government's almost complete inaction when the scale of the problem became obvious.

My right hon. and hon. Friends are concerned about this matter because many people visit our constituency advice offices as a consequence of pension mis-selling. Some of the cases are horrendous. There are many widows of miners in my constituency, and it is heartbreaking trying to deal with the consequences caused by the mis-selling of pensions to their late husbands, who thought that they were providing well for their wives, but who, through no fault of their own, have left them in penury.

I turn to the actions of the new Government since our election on 1 May. With the encouragement of the Chancellor of the Exchequer--who also represents a mining area and whose constituency, like those of many of my hon. Friends, comprises many publicsector employees--I called a meeting of the24 worst-performing companies in an attempt to resolve the pension mis-selling problem. My main priority was to get them to act on the 600,000 priority cases involving people who are at or near retirement.

Some 24 people met me at the Treasury, and I could see from the looks on some faces that it had only just dawned on them that the problem affects real people, is causing real anger in the country and is affecting the reputation of a very valuable sector of the British economy. It is deplorable that a key high-performing, high-profit industry should have an appalling reputation that rivals that of Arthur Daley as a result of pensions mis-selling. It is in the interests of the industry and of the people affected to resolve the matter.

I challenged those companies to come to me within a month with details of how they intended to handle the cases, and I undertook to publish every month the details

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of their progress. I did not take such action in order to name and shame, as the newspapers have claimed, but because the people affected have a right to know that their Government are as concerned and as horrified about the problem as they are.

When I published the first results of the inquiry at the beginning of this month in answer to my hon. Friend the Member for East Ham (Mr. Timms), I was horrified. The situation is worse than even I had expected. There is nothing to be gained by condemning the companies involved: they stand condemned by their own actions.I am anxious to ensure that people get redress quickly.I say to those companies--through you, Mr. Deputy Speaker--that it is not acceptable to take short cuts that result in people being worse off at the end of the process than at the beginning.

I am worried by reports from some of my hon. Friends that some individuals are being put under unacceptable pressure to settle by companies that mis-sold them pensions as a means of improving their statistics in the returns that I am asking for. I am not prepared to be hoodwinked by such action. I know that responsible companies will be appalled that that is going on.

I am aware that companies are experiencing some difficulties. I have made it clear that, if they come to me with their difficulties and if they stand up to investigation, I shall be happy to act. If necessary, my hon. Friend the Minister for Welfare Reform and I will talk to small and large companies in difficulty. I have asked those of my right hon. and hon. Friends whose ministerial responsibilities relate to pensions to ensure that pension funds in their areas are diligent in settling cases.

I accept the point that the insurance companies made to my hon. Friend the Member for Edmonton. I am tired of excuses, but I shall take action if excuses are justified.

I understand that discussions are going ahead on the slowness of the regulatory authorities in dealing with special schemes to settle. The regulators are in no doubt about my determination to resolve the issue.