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Mr. Tim Boswell (Daventry): Will the Economic Secretary accept for a start that we on the Conservative Benches entirely share her desire to rectify the consequences of pensions mis-selling as speedily as possible, consistent only with the proper discharge of the wider responsibility of insurance companies for the sound conduct of their business. We believe that the proper approach is through the regulatory mechanisms that we largely put in place--every one of those to which she referred were already in place. Those actions were taken further by Angela Knight, who was then a Minister in the previous Government.
Will the Economic Secretary acknowledge that, although the targets had been set by the regulator, most of these are for completion next month at the earliest; that neither she nor we are yet in a position to say that most individuals or companies have failed to meet their current targets; and that many will in fact meet them?
Will the hon. Lady also concede that the proper approach to the problem of pension mis-selling is through the regulator's steady and objective work, and the progressive use and tightening of the powers of sanction available to him, rather than through an approach that could be described as confessional, based on the naming and shaming of individual companies by a Minister? Does not her role in this increasingly resemble that of a public relations stunt, by a Minister who was herself employed in public relations by the late Robert Maxwell, one of the biggest mis-sellers of all?
Can we have a further assurance from the Economic Secretary that in no case will a company or individual who is likely to be in the frame for her naming and shaming be treated softly on the grounds of any association with, donation to or work for the Labour party or the Government? In particular, is it not interesting that her statement refers to the Prudential Assurance company, of which Peter Davis--he is well known to many of us, too--is chief executive? Is it not odd that she is shaming him while, simultaneously, the Government are prepared to condone him as the leader of the team on welfare to work, dealing with some of the most sensitive and underprivileged members of our society?
More widely, perhaps, will the Economic Secretary accept that, although the mis-selling of some private pensions and personal pensions was wrong and must be rectified, the United Kingdom is in an enviable position internationally, both with the strength of the financial services industry, to which she referred, and with the accumulation of some £650 billion of pension fund assets; and that only today representatives of German banks were reported as pressing their Government to enable the early establishment of what they described as Anglo-Saxon type pension funds?
Will the Economic Secretary acknowledge--it will be the first acknowledgement to come from the Government if she does so--that the present Government's smash and grab raid on pension funds through the pension tax in the sum of £5 billion a year, which they imposed in the last Budget, has cost every pension holder in the land a significant amount of their future pension? To be more specific, does she accept that the average cost to county council pension schemes, three quarters of which were in deficit at the last actuarial revision, is £3.7 million a year?
Will the Economic Secretary also acknowledge that the Government's proposals in the Budget have made opting out from the state earnings-related pension scheme much less attractive, and that, as a result, many people who have taken a personal pension would be better off in the SERPS scheme? Perhaps she will tell me that the Government will commit themselves to a public information programme to explain the implications to people who in effect have been mis-sold a personal pension by the Government. Would that not be a contribution to truth for the pension holder?
Finally, will the hon. Lady explain why the Chancellor of the Exchequer has refused to give a straight answer to the questions that we have asked him? Is it not, in fact, the Chancellor--who is sitting next to the hon. Lady--whom she should be considering for naming and shaming?
Mrs. Liddell:
We have just seen a manifestation of why, when we were elected in May, fewer than 2 per cent. of pensions cases had been dealt with. Under the last Government, there was a complete failure to take into account not just the fact that 600,000 people had been mis-sold personal pensions, but the fact that 18,000 had since died without securing redress. Today, we have seen an Opposition wriggling on the record of their own performance in government. We took the action we did because of our determination to see innocent people receive redress.
The hon. Gentleman talked about the Prudential. The Prudential will be dealt with by the regulators as they see fit, but the Government have decided that the structure of regulation needs to be reformed. The hon. Gentleman might have served the House better if he had come to the Dispatch Box and apologised for the performance of the previous Government.
Mr. Dennis Skinner (Bolsover):
Does my hon. Friend agree that, while the guilty people are the insurance company chiefs, many of the guilty people sit on the Opposition Benches? Scores of Tory Members were associated with those companies when the Tory Government were in power, and it was they who believed that market forces could allow people to change their pensions in such a fashion.
I stand up today because I remember when the miners, having ripped their guts out in the pits, saw those pits closed by that lousy Tory Government. Then these people came knocking on their doors--sent by Opposition Members, or their friends--saying, "Transfer your pensions, and you will get more money." The net result is that many of them have lost thousands.
I suggest that, if we do not get all that money back from those insurance companies, we should surcharge that lot over there, because they were instrumental in carrying out the mis-selling.
Mrs. Liddell:
I could not have put it better myself. As one who represents a mining constituency--as, indeed, does my right hon. Friend the Chancellor--I know the hardship that has been caused to the families of miners, and the great distress that has been caused to, in particular, the widows of miners whose husbands thought that they had left them well provided for, but who now find that they were duped because of actions taken by the last Government.
Mr. Edward Davey (Kingston and Surbiton):
Liberal Democrats welcome today's statement. Many people throughout the country are delighted that the new Government are taking the mis-selling of pensions seriously, although for far too many their action has come too late.
Has the Economic Secretary considered other measures to tackle the problem--for example, the reform of training and of the requirements for professional qualifications in those who are involved in selling financial products such as personal pensions? If the hon. Lady has not considered those measures, has she considered giving such a remit to the new Financial Services Authority, so that, in future, the financial services industry can proceed with confidence, and consumers can buy its products knowing that those who sell them have been properly trained and are competent?
Mrs. Liddell:
The hon. Gentleman makes a good point. We have had extensive discussions about matters relating to training, and about the standards of those who give financial advice. I was interested to note that the hon. Member for Daventry (Mr. Boswell) gave some financial advice himself; I wonder whether he is registered to do so.
As for regulatory reform, we intend to look closely at ways of improving the standards of financial advice--and, indeed, the standards of consumer education in relation to financial services products.
Mr. Ivor Caplin (Hove):
I, too, welcome the statement. I am sure that, like the rest of the House, my hon. Friend will be aware of the public apology made by Peter Davis, the chief executive of the Prudential. [Hon. Members: "Reading."] I am not, actually.
Is my hon. Friend aware that the Prudential is still failing victims, and is likely to continue to do so, and to miss the targets for next March? What does she plan to do about that?
Mrs. Liddell:
It is interesting to note the discomfort that is experienced by Conservative Members when important points are being made about ensuring that people meet targets. The purpose of today's statement is
Mr. Peter Brooke (Cities of London and Westminster):
The way in which the Minister plays her hand is for her to decide. Is she implying that she is against the principle of the Social Security Act 1986?
Mrs. Liddell:
Yes: that is why we are reforming it.
Mr. Jim Murphy (Eastwood):
I congratulate my hon. Friend on the work that she has done on this important issue. Will she confirm that the inability of companies to meet their targets for compensation, and the inability of the Conservative party to deal with this matter while in government, has led to many thousands of pensioners dying without receiving any compensation?
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