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Mr. Smith: I have been saying a great deal that is constructive about the careful and principled way in which we are approaching this very difficult challenge. We owe it to those affected to do that without raising false hopes. If it is not possible to do anything, as might ultimately be the case, they need to know that that has been the position all along. At the same time, we should not prematurely close off the opportunity of assistance if we can identify a proper basis on which it can be done.
I stress the distinction that I made a few minutes ago between the possibility of assistance and the question of compensation. I am not a lawyer, but I take the point that was made by the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg):
compensation has implications of legal liability, which, for reasons that I explained, I do not accept. There is no doubt, however, that these workers and their families have a compelling case on human grounds. That is why it would be wrong to close off the possibility of assistance while there is any chance that that might be made available through their existing deemed buy-back rights, improved procedures or other means.Looking to the future, the lesson that we should all draw from this is that a pension promise made should be a pension promise honoured. That is why it is right that we have implemented the full buy-out regulations. That is why it is right to introduce the Pensions Bill, which establishes the pension protection fund. It will ensure that such a position cannot arise again and I therefore hope that hon. Members of all parties, whatever their other reservations about Government policy, the state pension system and so on, will support the Bill and get the pension protection fund in place so that scheme members have the protection that they deserve.
5.4 pm
Mr. Steve Webb (Northavon) (LD): I must confess that when I found that we had a debate on winding up occupational pension schemes approximately a week after the publication of the Pensions Bill and a week before Second Reading, I was slightly bewildered. I tried to work out why we were holding a separate debate about issues that we shall discuss again next Tuesday and, I suspect, for the next happy couple of months.
I admit that an unworthy thought crossed my mind. The Conservative motion contains a great deal that is sympathetic, but it does not take us any further—indeed, it more or less says, "something must be done." It
- "calls upon the Government to take urgent action"
The discussion between the Front Bench spokesmen has revealed some interesting developments. I want to ascertain the extent to which we can find consensus. We want the Pensions Bill to be amended to provide assistance, compensation or simply some money. I strongly suspect that the 60,000 people who have lost out do not give a fig whether the provision is called compensation or assistance; they simply want the money that they were expecting to live on. I should be happy if, at the end of his deliberations, the Secretary of State decided that although the Government saw no case for compensation, they were prepared to provide assistance on a discretionary basis that effectively tackled the injustice. I am prepared to swallow such phraseology if it provides legal cover for the
Government. My main concern, like that of many other hon. Members, is to ensure that the injustice that such a large number of people have suffered is tackled. It is therefore welcome that the Secretary of State is giving himself some room. If pressing for assistance rather than compensation helps, I can live with that.The motion does not mention compensation and the right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) highlighted that by tabling an amendment that referred to it. The Government's response so far has tended to be, "We can't have retrospection or an insurance scheme that applies retrospectively to people who suffered their loss before the insurance was introduced." I am not calling for that. I am not suggesting that we should have an insurance scheme that insures people who had not paid any premiums when they suffered their loss. The argument that we cannot have retrospection does not stack up. All sorts of people suffer losses, and all sorts of Governments compensate them for or assist them with the consequences. Nobody says, "You can't do that because it's retrospective." People cannot be compensated until they have suffered a loss. Compensation must always happen after the event, and there is no great issue of principle at stake.
Mr. Frank Field: At least some of us who propose that there should be some compensation or payment for those who have lost their pension do not argue that that should be part of the new scheme. Indeed, the last thing that we want to do is weigh down a new scheme with such considerable debt. Compensation or payment should be totally separate from the scheme.
Mr. Webb: That has always been my view but Ministers appeared on the main evening news bulletins on the day the Bill was published and argued that we could not help people retrospectively. The straw man of retrospection was put up only to be knocked down. I am grateful for the right hon. Gentleman's confirmation of my view. However, compensation or payment is a matter of natural justice, leaving the aside the legal niceties of the insolvency directive and so on.
Adam Price (East Carmarthen and Dinefwr) (PC): Just to back up the hon. Gentleman's point, retrospection has always been part of a tradition in civil law. The War Damage Act 1965, passed by a Labour Government, provided retrospective compensation for injury suffered during the second world war. That is just one example.
Mr. Webb: My general point is that Governments often take action after the event to compensate or help people who have lost out. That is not my understanding of retrospection, which is applying a law to people who acted before that law came into force. This issue is different because it is about compensation, or assistance—call it what we will. I therefore hope that the Government will stop saying on the radio and television that they cannot take this action because it would be retrospective. It would not be retrospective action, because it is about compensation or assistance.
Kevin Brennan: Is not a further point that the Government have a responsibility always to act in the
public interest? To restore confidence in occupational pensions, it is very important that after the establishment of the pension protection fund—which is very welcome—there are not tens of thousands of people around saying, "Don't join an occupational pension scheme; look what happened to me."
Mr. Webb: That is right. One problem with pension reform is that there is always a lot of history. Just as pension mis-selling has done real damage to the private pension sector, so tens of thousands of people who had lost their occupational pensions could do damage to the future of occupational pensions. That has to be true.
Another important thing to come out of this debate is the Secretary of State's confirmation that the estimate of 60,000 workers is in the right ball park. I think that that faithfully reflects the tenor of his remarks. That is an extraordinarily significant remark for him to make, given the Government's argument about blank cheques. I have to say that the Conservative party's objection to signing early-day motion 200 now goes out of the window because we know what average industrial sector workers' earnings were, so it is not beyond the wit of man to estimate the broad order of magnitude of the losses. Clearly, there will be a range of figures on that. No one knows for sure, and I shall return to information in a moment; but we now need a declaration of principle from the Conservative Opposition. Now that we know that we are not talking about a blank cheque because we have an order of magnitude, do they accept in principle that there is a natural justice case for compensation or assistance of some sort?
If we are going to move forward together, we do not need the hon. Member for Bournemouth, West (Sir John Butterfill) and the hon. Member for Cardiff, West (Kevin Brennan) to fall out with each other; we need them in the same Division Lobby. Conservative Front Benchers should be able to agree that we can have a pretty good idea of the amount involved because the Secretary of State has confirmed on the record that the rough figure of 60,000 is correct, we know what average earnings are, and we have a lot of detail from some of the schemes about typical deficits.
Only a few hours ago, we were discussing the national insurance fund, whose revenue for this year was overestimated by £1.5 billion and whose administrative costs were underestimated by £750 million. That was in just one year. We are not talking in this debate about anything like that sort of annual sum. All of us who have spoken sympathetically to ASW workers and others have a duty to say, now that we have a rough idea of the number of zeros on the figure and of the scale of the problem, whether we are in principle willing to sign up to some sort of assistance or compensation scheme.
I understand why the Conservatives were not willing to sign the early-day motion prior to today, but I hope that now they will be prepared to sign on the dotted line in principle—I am not too worried about particular early-day motions—and that all of us who have shown sympathy can make an unambiguous statement. The Government motion shows sympathy, but even they would accept that these workers need more than that. We should now go forward in as united a way as possible
and say that, even if we query the compensation issues, as hon. Members have today, there is an issue of natural justice involved.
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