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16 Oct 2002 : Column 432—continued
Public accounts
- That Mr. Barry Gardiner be discharged from the Committee of Public Accounts and Angela Eagle be added.—[Mr. Jim Murphy.]
Public Administration
- That Mr Anthony D. Wright be discharged from the Select Committee on Public Administration and Mr Kelvin Hopkins be added.—[Mr. Jim Murphy.]
Petitions
Air Ambulance Services
10.24 pm
Mr. Mark Simmonds (Boston and Skegness): This petition from the residents of the Boston and Skegness constituency declares that the
- Lincolnshire and Nottinghamshire Air Ambulance provides a vital community service; and that an annual budget of #1 million is needed to keep its helicopters flying.
The Petitioners therefore request that the House of Commons urge the Secretary of State for Health to express his support for the work of the Lincolnshire and Nottinghamshire Air Ambulance and to take the appropriate action to ensure the continued operation of this vital service.
And the Petitioners remain, etc.
Cliffe Airport
10.25 pm
Bob Spink (Castle Point): The Government's airport review sets out one option for a new hub airport at Cliffe, just 2,000 yards from my constituency boundary. It would cause unspeakable environmental damage and noise, air and light pollution. Therefore, Councillor Mark Howard of Canvey Island, Mr. Tony Thomas of Hadleigh and Mr. Adrian Roper of Benfleet, all of whose communities would be damaged by the proposal, have helped to compile a petition of about 10,000 signatures in the following terms:
- To the honourable Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
The Humble Petition of concerned residents of South East Essex and surrounding areas sheweth that the Government's proposed Cliffe Airport option appears from the very scant details so far revealed by the Government to offer far more disadvantages than advantages to South East Essex and the Government has totally failed to consult the people of S. E. Essex on the question.
Wherefore your Petitioners pray that your honourable House will urge the Government to rescind its Cliffe airport option and undertake substantial, informed and open consultation in S. E. Essex.
And your Petitioners, as in duty bound, will ever pray.
Podiatry Services
10.27 pm
Mr. Peter Viggers (Gosport): This petitition relates to podiatry services in the Gosport and Portsmouth area. Its origin is a circular from the national health service of October 2001 entitled XImproving podiatry services for local people". One might therefore reasonably expect services to improve. The truth is that, of the 900 people referred monthly for podiatry care, most will not receive it and existing patients will be denied it. As the circular says:
- XMany people with relatively low needs who have become accustomed to receiving foot care will no longer be able to do so . . . The podiatry service will provide shorter packages of treatment for conditions that can be improved. Ongoing care will only take place where the health of limbs is vulnerable."
- distressed and alarmed by the reduction in podiatry services which will end the provision of foot care to the wide range of local residents, many of whom are elderly and infirm, and notes that many will have great difficulty or expense in making alternative arrangements for foot care.
- restore services in Gosport and the other areas in Hampshire and the Isle of Wight to their former level.
And the petitioners remain, etc.
Pension Funds
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Jim Murphy.]
10.28 pm
Mr. Derek Wyatt (Sittingbourne and Sheppey): I am most grateful that you, Mr. Deputy Speaker, have given me this opportunity to discuss pensions and, in particular, the plight of workers at ASW Sheerness and ASW Cardiff. I know that my hon. Friend the Member for Cardiff, West (Kevin Brennan) also hopes to catch your eye.
This has been our second day of lobbying Parliament. Fifty-two Members have already signed our early-day motion and, late last night, I handed in the ASW Sheerness petition to the House. I am most grateful to see so many Welsh Labour colleagues here to support me.
Yesterday, the ASW pension action group from both Sheerness and Cardiff saw my right hon. Friend the Minister for Pensions, my hon. Friend the Financial Secretary to the Treasury as well as Des Hamilton from the Office of the Pensions Advisory Service and Mr. Geoffrey Norris at No. 10 Downing street. I know that from our debrief later on yesterday evening that the group found the meetings helpful, stimulating and thought provoking. Even at this early stage of our negotiations for a just settlement to the pension fund, I want to place on record my thanks to Ministers for their willingness to engage in this process.
Three months ago, I was looking forward to a quiet weekend and was independently minding my business on the train home to Sittingbourne when I was called on my mobile just after 7.15 pm on Thursday 4 July 2002 by Graham Mackenzie, the then chief executive officer of the ASW Group. He told me that the company was likely to go into receivership.
It took me some time to find all our Ministers and some of their Welsh equivalents. It was well past midnight before I reached the Secretary of State for Trade and Industry, who was still up preparing her speech in a hotel in Cambridge.
I should like to add a note of thanks and gratitude to my right hon. Friend the Secretary of State, my hon. Friend the Minister for Employment Relations, Industry and the Regions, who is responsible for manufacturing, and the Under-Secretary of State for Foreign and Commonwealth Affairs, my hon. Friend the Member for Rotherham (Mr. MacShane), as well as the First Minister for Wales and, again, Mr. Geoffrey Norris at No. 10, for trying to find a way of preventing the company from going into receivership. The blame can be squarely laid at the door of the dithering bankers representing a once-famous bank, NatWest.
Unless we are in our 50s and beginning to think about retirement—that fantasy house we have dreamt about or that cruise we have always wanted to take—we rarely think about our pension and what it is worth. We pay into a scheme and expect it to bring if not rich dividends, at least a comfortable existence. I am beginning to think that a large majority of working people in this country are in for a nasty shock.
About 8.5 million people in the UK have a final pension scheme. They are also known as defined benefits schemes. In practice, they are a way that our people save for a second pension, knowing that the state pension will not always cater for all their needs. All Governments have encouraged employees to take out such pensions. I am also beginning to suspect that final pension schemes will become better known over the next few years as the pension virus that slipped under our doors at work and disappeared through the cracks in the window. I suspect that many final pension schemes are in deficit. Over the past few months, I have read that BT and Trinity Mirror's pension schemes are billions of pounds in debt. I wonder how many other FTSE 100 companies' schemes are in the same boat.
The analysis by the TUC of the Government Actuary's figures suggests that 1.8 million fewer employees are in final salary schemes than a decade ago. Its figures show that there were 5.6 million employees in such schemes in 1991 compared to 3.8 million in 2001. Of those, only 200,000 have transferred to money-only schemes, some of which are inferior, leaving a net loss of 1.6 million fewer people with any form of occupational pension. So pensioner poverty—something that the Government are proud to be helping to solve—will be a growing problem unless we do something about it now.
I am of course aware that the Government are preparing a Green Paper on pensions which is being drawn up by the Department for Work and Pensions and the Treasury. Green Papers are the slow burn of Governments. They take between three and five years to be enacted. FTSE 100 companies would never sanction Green Papers because none of the blue-sky thinking is ever costed. That is indicative of Whitehall culture, which finds doing basic sums difficult. How can politicians, stakeholders and our citizens and would-be voters ever understand what choices they have unless they know what the costs will be to both the Exchequer and, frankly, their back pocket? It is naive of civil servants to maintain that absurd situation. I hope to persuade my right hon. Friend to ensure that the Green Paper, which I hope will be published before Christmas, comes with fully costed models so that we can better understand the alternative packages that are before us. Not to do so would be a great mistake. I want to see an end for ever to pensioner poverty. At the same time, we all need to know the likely cost implications.
Let me return to the grave issue of the ASW Sheerness pension problem. I have been made redundant twice in my life. The first time was a shock; the second time was shocking. The experience burns a hole in one's being. It burns doubly when a person has a young family and a hefty mortgage to pay. It hurts our closest relationships. Imagine then that at the same time as being made redundant, someone is told that their final salary scheme has been placed into administration and that, because of the arcane system, it may be three, four or five years before it is possible to know what it is worth and whether what that person has been saving for is worth anything at all. It is the worst kind of double whammy. That has happened to more than 1,000 workers at both ASW Sheerness and ASW Cardiff. They are powerless. They have been mugged by the pension virus.
It is not just ASW workers who have experienced that appalling problem. Nearly 300 final pension schemes have been wound up this year, affecting 40,000 people. Consider the case of Lister's in Haywood, Lancashire. Its workers were originally told that they would get around 75 to 80 per cent. of their expected pension, but ended up with nothing. The hard-cash figures were stunning. The fund value was #6 million. The independent trustee charged #400,000. The legal fees were #80,000. KPMG receivers charged #49,000. For setting up the pensioners' annuities, Abbey National charged #130,000. There were other miscellaneous costs of #140,000. That gave a total of #800,000 of costs to administer a failed pension scheme, which is nearly 14 per cent. of the fund value.
United Engineering Forgings in Ayr, Scotland, went into insolvency and it was revealed that the employees' pension fund, run by Prudential, was underfunded to the tune of #12 million. Let us consider the case of Albert Fisher Group, which acquired Saphir Produce, whose pension fund was transferred to Albert Fisher. When Albert Fisher went broke, pensions from the original company, Saphir, were worth nothing.
In our meetings yesterday with the Minister for Pensions, the ASW pension group left nine questions for him to answer. I shall spare his blushes by not reading them into the record because I know that he has promised to respond to them over the next few weeks. However, I want to tell him about three cases to show him the brutality of the system. At ASW Sheerness a man with 31 years' service was due to retire on 31 July 2002. He had a written statement of pension benefits for that date which he naturally assumed to be legally enforceable. He has lost #3,600 per annum through the pension fund being put into administration. Ironically the date of his retirement was originally agreed to suit the company's requirements, and had he insisted on taking his pension sooner he would have lost nothing.
The second case concerns another man with 31 years' service who was due to retire on 31 August. He too had a written statement of benefits. After wind-up, the 30 per cent. reduction knocked more than #3,200 per annum off his pension. In this case it did not leave him enough to survive on and he has had to carry on working beyond his planned retirement date. The third case is that of a man who will retire at the end of November after 26 years in the pension fund. He has not even been advised yet of his reduced figures. He faces the prospect of retiring on an unknown but certainly heavily reduced retirement income without even the opportunity of continued working to offset the loss. Some of these people have worked 20, 25 or 30 years and paid #100 a month into a pension fund, and they have no rights over it. There are many more details of cases on a clever website, www.pensionstheft.org, which I urge Members to read.
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