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8. Mr. Barry Sheerman (Huddersfield) (Lab/Co-op): If he will introduce a fund to compensate those who have lost their pensions as a result of insolvency. [160842]
The Minister for Pensions (Malcolm Wicks): We do, of course, have an understanding of the position facing workers who have lost pension rights on account of company insolvency. Indeed, my ministerial colleagues and I have met many such workers to discuss problems with them. There are complex arguments on both sides about what action should be taken, and we are giving them serious consideration.
Mr. Sheerman : Does my hon. Friend agree that the constituency problem that many of us feel poses the greatest injustice is when constituents who may have worked 40 years for a company tell us that they have lost their entire pension entitlement? Sometimes they have worked on in an attempt to save their company from going bust, thus failing to take up their pensions just in time as some of their colleagues have done. Will my hon. Friend talk to his Treasury colleagues? I remember back in 1979I have been in this place a long timethat the Conservative Government introduced a retrospective tax on bank profits. Would that not be a good way to help finance the 60,000 people who have suffered such a bad deal?
Mr. Wicks: A number of proposals have been made both by Members and outsiders as to how the position can best be remedied. We are looking seriously at them, but we have to say on this occasionand repeat the pointthat it would be wrong to offer any false hope to those people at this stage. We are examining the circumstances very seriously, as I said. I must add that this is the first Government who have taken action to ensure that those scandals cannot happen in the future. That is why we are legislating now with the Pensions Bill for a pension protection fund, which will bring security to 10 million scheme members and their families. It is a major social advance.
Adam Price (East Carmarthen and Dinefwr) (PC): The Secretary of State helpfully announced in an earlier debate that work had been initiated on trying to assess the precise extent of the pension deficit for the 60,000
people facing this problem. Will the Minister tell us what progress has been made so far in that assessment and when we can expect an announcement in the House?
Malcolm Wicks: Work is, of course, going on, but all I can say at this stage is that we will bring forward those estimates when we are in a position to do so, which is not today.
Kevin Brennan (Cardiff, West) (Lab): Has my hon. Friend looked through the information given over the years to people in final salary occupational pension schemes? Has he ever found any sort of health warning that told people thatas happened to the constituents of my hon. Friend the Member for Huddersfield (Mr. Sheerman)they could work in a company for 40 years and that their pensions could be worth nothing at the end of the day? Did their companies, the quangos set up by the Government such as the Financial Services Authority and the Occupational Pensions Regulatory Authority or the Department for Work and Pensions warn them that that could happen at any stage?
Malcolm Wicks: My hon. Friend, together with other hon. Members on both sides of the House, is a great champion for that group of workers, and I pay tribute to him. I cannot add to what I have said already about the current group of workers, but I emphasise that people who have worked hard all their lives and who have contributed for 30 or 40 years have a right to security, which is whysubject to the will of the Housewe will provide security from April next year through the protection fund introduced by the Pensions Bill.
Mr. Nigel Waterson (Eastbourne) (Con): Will the Minister accept that the Pensions Bill will do nothing for the 60,000 people who have already lost their pension rights? Will he accept those people's strong moral claim and the Conservative amendments to the Bill, which are designed to compensate those who have already lost their rights? Following this morning's meeting between Labour Members and the Prime Minister, has that important matter now been taken out of the Minister's hands?
Malcolm Wicks: We are having serious dialogue with concerned Members of Parliament about a serious issue, which, because it is serious, should not be subject to mere partisanship. We are engaged in serious dialogue and will take no lessons from Tory Front Benchers who deliberately advised hon. Members to vote against the Second Reading of the Pensions Bill, which will set up the security for the future that the hon. Gentleman pretends to want now. If he had had his way, the Pensions Bill would not have had a Second Reading.
Mr. Frank Field (Birkenhead) (Lab): Since the Minister told the House that we should not hold out false hope to the 60,000 people who have lost their pensions, the Chancellor of the Exchequer has briefed the media that he has plans to take some of the unclaimed assets from banks and building societies and use them to finance charitable activity. Will the Minister accept that most hon. Members believe that charity
begins at home and that the best way to use those funds at home would be to finance the pensions of those who have lost out owing to their firms winding up schemes.
Malcolm Wicks: With all due respect to the newspaper scribes, I have passed the stage at which I believe everything that I read in the newspapers, whether it is about the Chancellor or any of my hon. Friends. We have obviously examined and considered the proposal championed by my right hon. Friend the Member for Birkenhead (Mr. Field), but I cannot pretend that there are easy answers. At the risk of boring the House, I repeat the point for those who read Hansard or who are watching at home that we must not offer false hope in a complex situation.
Mr. Jonathan Djanogly (Huntingdon) (Con): Last week, I received a delegation from members of the Samuel Jones pension scheme. Some 200 members of that scheme live in St. Neots in my constituency and face the miserable prospect of a no-pension retirement following the insolvency of the company for which they worked and the underfunding of their scheme. Samuel Jones had a particularly long-serving work force, and the losses involved are significant. The Minister is not taking the situation seriously enough. Does he appreciate how young people are being put off investing in pensions because the Government refuse to deal with that type of problem?
Malcolm Wicks: It does not help to suggest that Ministers are not seriously concerned. When I meet groups of workers who are in that situationI am happy to meet the hon. Gentleman and the workers affected because I take his question seriouslythey talk with quiet dignity about the effect on them. They discuss issues such as the effect on their health, the rotten part-time jobs they have had to take to supplement their incomes and the impact on their families and marriages, and I take the situation seriously.
9. Mr. George Mudie (Leeds, East) (Lab): How the Government will continue to measure progress towards eradicating child poverty. [160844]
The Secretary of State for Work and Pensions (Mr. Andrew Smith): The blight of child poverty has many aspects, on which the Government report annually in "Opportunity for All". At the heart of poverty is, of course, low income. The new measure of child poverty, which I announced in December, reflects that, combining as it does absolute income, relative low income and material deprivation.
Mr. Mudie : I commend my right hon. Friend the Secretary of State and the Government on reaching their ambitious but necessary 2004 targets for cutting child poverty by 25 per cent. I note, however, that the criteria for child poverty have changed, after one consultation, and that three new measures will be introduced. Can my right hon. Friend assure the House that the change in no way represents a dilution of the Government's targets in this important area of policy?
Mr. Smith: We will not know for some time whether we have met the 200405 target, although the prospects are good for doing so on a before-housing cost basis. They are more challenging on the after-housing cost basis. On the substance of my hon. Friend's question, I can assure him that the new measure is every bit as rigorous. As he said, we have consulted extensively on the issue, and there was support for including material deprivation alongside relative and absolute low income, to give a composite measure that truly reflects the experience of poverty. Incidentally, we did not consult only academics: we consulted poor people, including children in poor families.
Andrew Selous (South-West Bedfordshire) (Con): Could the Secretary of State say a little more about his reasons for changing one of the measures from an after-housing cost basis to a before-housing cost basis? In areas such as mine, where housing costs are significant and constitute a large proportion of the family budget, my constituents are interested in how much money they have to spend after their housing costs. Many of us do not understand the change.
Mr. Smith: Subject to the Office for National Statistics, the full range of figures will continue to be published, both on an after-housing cost basis and a before-housing cost basis. The hon. Gentleman, other hon. Members and the public will be able to make a judgment in the round on how well we are achieving the objective. The other important point to make is that the material deprivation component of the new measure will illustrate whether high housing costs are giving people a low after-housing cost income.
Mr. Paul Goodman (Wycombe) (Con): The Government said in 1998, in their document "Supporting Families":
Mr. Smith: It plays an important role. That remains the Government's view. If the hon. Gentleman looked at the extra resources that the Government are putting into counselling and encouraging people to resolve relationship difficulties in the interests of their children, he might find that we are at one on the matter.
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