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Mr. Miller: I put on record my thanks to my right hon. Friend for the help that he has given me with the Robertsons' case. Is he arguing that such compensatory arrangements should be based on the date of Royal Assent of the Pensions Act 1995, or that they should go back prior to that date?
Mr. Field: If my hon. Friend had received answers to the questions that he tabled for answer today, I could probably have given him a more definite answer. Most of the cases about which we know are fairly recent and as we look further back, the number of cases is smaller. I would not want to draw an arbitrary line at this stage without seeing the figures. However, I make a plea that we do not try to entice the Secretary of State into introducing a compensation scheme for a group of workers that somehow passes its cost on to future generations. If we are not prepared to meet the cost by asking the Chancellor to levy taxes, or, as I would prefer, by introducing a levy on unclaimed assets, we do not have the right to suggest that future generations, some of whom are not yet born, should meet a bill that we are not prepared to pay.
The Secretary of State has given two outings to his view that just because assets are unclaimed, that does not mean that they do not belong to people, so perhaps we should not touch them. Most people in this country know what their income is, and the Chancellor thinks that it is totally proper to tax us. If we agree to that, surely we can start to consider unclaimed assets that go back more than 100 years. I know that several Scottish Members are slightly jumpy at the thought of placing a levy on unclaimed assets in case they mistakenly own some, but given that some go back 150 or 200 years, we can start at the end of the queue and work forward. I make a plea: let us not try to impress any proposals on the Secretary of State unless we are prepared to suggest where the money would come from.
My last plea is about parking pension liabilities, which have already been touched on. However, before I move on to that point, may I say that I am sure that the my right hon. Friend the Secretary of State picked up the mood of the House when hon. Members discussed meting out justice to our constituents who were forced to save yet now face the horrendous prospect of a retirement with little or no pension? I want to strengthen my right hon. Friend's hand in the negotiations in which he will be involved. If the Government are unable to introduce suitable measures on Report, I hope that my right hon. Friend has picked up the feeling that at that stage, while the rest of the Bill may be secure, the Government might find difficulty in holding to their line when the vote takes place. Even if we do not manage to persuade the Government in this place, there is the revising Chamber. I do not say that in a threatening way. However, my right hon. Friend faces some tough negotiations and we all want him to be in as strong a position as possible when he takes on the powers that we are discussing.
The last issue and caution is whether, on Report, we can put into the Bill some measures that prevent unscrupulous employers from trying to park their
pension liabilities in companies that then sink. I say that because last week I was debating the impact of the actions of a firm in Birkenhead. Although that firm paid all its insurance to Chesterstreet Holdings to cover its workers on asbestosis claims, Chesterstreet Holdings decided that it would leave all its liabilities for asbestosis cover in its main company. It took away all the said firm's profitable business and placed it in another company. That company still trades. Many constituents suffered considerable shock and alarm when the insurance cover for asbestosis went down with what was then nearly a cardboard firm.I hope that the Government will be open to comments and suggestions about reform from us all when we come to consideration on Report, to ensure that those employers who want to rid themselves of their pension liabilities and then continue trading in another guise cannot do so. We must somehow link the responsibilities that are built up to the company that collected contributions and invested them on behalf of employers.
This is an important day for the Secretary of State and his team. I thank them for the huge amount of work that they have done to get the Bill in its present form. However, I remind my right hon. Friend of my four cautions. I hope that before the general election we shall set out to the electors a choice about long-term pensions reform. A risk-based levy on employers might bring down some companies, and in that event people will point the finger at the Secretary of State. Could we devise some way of preventing people from walking away from past pension liabilities, as Chesterstreet Holdings did with its insurance claims?
Lastly, before the Bill receives Royal Assent, I hope that the Government will give us the opportunity to ensure that those of our constituents who did everything that was required of them to save for their old age and who have been wickedly robbed of that inheritance will be given some justice.
2.23 pm
Mr. Steve Webb (Northavon) (LD): I am grateful for the chance to make a Front-Bench contribution and to follow the right hon. Member for Birkenhead (Mr. Field), who, as has been said, has often been the person to come up with innovative ideas, proposals and suggestions for tackling pension problems. With no disrespect to those on the Government Front Bench, it is a shame that he has to do so from the Back Benches.
We owe it to those who have lost their pensions and to those who are currently saving for pensions to be clear where each of us in the House stands on this issue. I wish to make it clear that I and my colleagues reject the Conservative reasoned amendment. I shall be asking my colleagues to support the Bill on Second Reading.
In my view, the Conservatives have behaved in a slippery and evasive manner. To read the press, one would think that they were tremendously sympathetic to the problems and had an entirely positive agenda. Yet, this evening, they will be trying to block a Bill that will provide protection for future workers' occupational rights. The hon. Member for Havant (Mr. Willetts) says that he supports the principle of a central insurance system, but he did not say anything about future workers, future pension rights and the sort of insurance-
based scheme that he want to see, let alone mention provision for those who have already lost out. The reasoned amendment says that we should not give the Bill a Second Reading because of what it does not contain. I accept that it does not contain a great deal, and there is plenty in it that is flawed, but there is good enough in it. It provides for a proactive regulator—a long overdue provision. It provides for a scheme, albeit flawed, but it represents the basis for such a scheme, to protect future pension rights. That is why I shall be encouraging my colleagues to support the Bill on Second Reading.As I said, the reasoned amendment gives a long list of concerns about things that are not in the Bill, but surely the Opposition cannot say that they do not support the proactive regulator. They cannot say that they do not support central insurance. So what is it in the Bill to which they object? I do not understand.
Reflecting further on the approach that the Conservatives have taken, I refer the hon. Member for Havant to his quotation from The Independent on Sunday. He is also reported in the press as saying that the Conservative plan is to table an amendment to enable the pension protection levy to provide retrospective compensation. Apart from having said that that is not an accurate reflection of his position, I do not understand how one can table an amendment to a Bill after it has been defeated on Second Reading. I am rather puzzled. Obviously the hon. Gentleman has no confidence that his reasoned amendment will be agreed to this evening. After all, if it were agreed to, he would not be able to amend the Bill. I know that I have not been in the House for as long as the hon. Gentleman, but I cannot work out his position.
The central proposal before us is the pension protection fund, and I shall concentrate my remarks on it. There is a paradox. The Secretary of State uses the analogy of holiday insurance and car insurance, and says that this is pension scheme insurance. He says that essentially we are talking about an insurance scheme, but the Bill contains a raft of measures and provisions that obviously do not make it an insurance scheme.
The first factor is the risk-related premium. To use the analogy of the boy- racer, in the first year of operation he will be paying exactly the same premium as the staid middle-aged driver who never has an accident. There will be no distinction between those who are extremely likely to make a claim on the fund and those who are unlikely ever to do so. We have been told that after a year there will start to be a risk-related element. I understand that that will be phased in over a period of years. We have the bizarre situation where a company that does well out of the risk-related premium—for example, BT, a big, solvent company that works hard fully to fund its liabilities—can opt for the RRP, and presumably not pay very much, while a dodgy company that has not funded its scheme properly, and is probably teetering on the brink of insolvency, can defer moving over to the RRP for several years. That is a wacky sort of insurance scheme, where the bad risk as well as the good risk can pay low premiums. I have not worked out how the sums add up. It is an odd transitional process.
This is not really an insurance scheme. Instead, it is a messy hybrid. Many of these issues need to be resolved as we examine the details in Committee.There is a further reason why I am concerned that this quasi insurance scheme is not what it appears to be at first sight. There is the idea that it guarantees people's pension rights. We know, broadly speaking, that the plan for the PPF is that a person will get 100 per cent. of their rights if they are already drawing a pension and 90 per cent. if he or she is still a worker. However, that might not be the case. If the fund is in trouble, what is the first thing that happens? The fund may set a higher levy for the following year, but the Bill contains a provision for a cap. The levy can be increased only by a specified percentage. What happens if finances are seriously in trouble? For example, early on many companies that are limping along to 6 April 2005 might suddenly make their claims on the fund. All right, the assets of the schemes will go across to the PPF, but if scheme funding becomes seriously in difficulty and the levy has increased against the cap, what happens? The next thing is that the PPF will cut the benefit that it pays out. It will get rid of the indexation of pensions in payment. It will get rid also of the uprating of pensions that have been deferred.
What if the scheme is still in a mess at that point? Buried in one of the schedules is the Secretary of State's right to cut the protection that is offered by the PPF below 100 per cent. and below 90 per cent. We have the bizarre situation where a so-called insurance scheme might not pay out.
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