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Malcolm Wicks: I shall give way, then I shall try to keep to my word and make some progress.

Mr. Webb: We know that the Government are proposing a 20-year scheme. Can the Minister explain their reasoning? Some of the workers affected are already past pension age and therefore need money
 
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now, but some have not yet reached pension age and will still be alive in, say, 30 years. What will happen in the final 10 years or so?

Malcolm Wicks: It is our judgment that £400 million over a 20-year period, fed into whatever scheme we set up—the mechanics have still to be decided—will be sufficient. There will be a three-yearly review of the administration and of how the scheme is working.

Mr. Jim Cunningham : I welcome the Government's initiative in establishing the scheme, but will it extend into the past to cover people such as Matrix Churchill and Massey Ferguson workers in Coventry?

Malcolm Wicks: I shall make progress, because I can cover those issues.

Some important choices remain on how we should proceed. Hon. Members will appreciate that the matter is complex, and we must work quickly with all those involved to explore how we can balance the funds available. The coverage must ensure that those suffering losses are helped according to the principles of openness, fairness and, very importantly, operational practicability. The role of the industry, employers, actuaries, trustees and trade unions in resolving those issues is as great as that of the Government.

Alan Howarth: Will the Minister give way?

Malcolm Wicks: No, I shall make some progress. I hope that my right hon. Friend will not think me discourteous, but he has already intervened once.

I would like briefly to take the House through how we intend to turn our commitment into reality. It involves four phases of work: first, we shall engage with our partners and industry experts, including the trade unions; secondly, we shall design the detail of the policy and the operational framework; thirdly, we shall prepare to implement the scheme; and fourthly, we shall go live and make payments.

The House will want to know about the key milestones in that process. By the end of May, we will have established our working relationships with key partners at all levels. This week, the Secretary of State will write to stakeholders to open a discussion, so that we can address the choices that we must make in partnership. As part of that engagement, the Secretary of State and I plan to meet key stakeholders as soon as possible.

By the end of June, as already promised, we shall lay a report on the results of our investigations to establish the extent of the problem and the numbers affected. Over the summer, we shall work closely with industry experts in a design phase and in exploring the options for operational delivery, on which a number of alternatives are available. Some alternatives involve running on schemes and topping them up, while others involve winding up schemes and providing assistance. Options for delivery might include that undertaken by the DWP, an industry-led body or a stand-alone trust.

By the end of November, we can begin to consult on the details of the regulations. As we expect to use affirmative regulations, hon. Members will have the opportunity to consider our proposals in depth in
 
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Committee, and debate will also occur in the other place. By the spring of 2005, we intend to have the scheme in existence with a view to being able to make the first payments as quickly as possible. The programme is demanding, and successful delivery will be possible only through a close working partnership, the establishment of which is our immediate priority.

Kali Mountford (Colne Valley) (Lab): Will my hon. Friend clarify two points on how he intends to operate the scheme? First, when he examines the parameters for who might qualify, will he ensure that he does not open the floodgates and increase payments above the sum that he announced? Secondly, will he ensure that as much as possible is spent on the people who need help, rather than on administrating the scheme?

Malcolm Wicks: Those matters are crucial, and I hope that I have reassured my hon. Friend on her first point. We cannot nationalise risk and think that a particular case deserves assistance. Given the level of need, the question of how the money will be distributed is uppermost in our minds.

Mr. John Redwood (Wokingham) (Con): I am grateful to the Minister for his courtesy in giving way. My entry in the Register of Members' Interests includes my being a trustee of a pension fund, but I am not speaking on its behalf. The Minister says that the figure is £200 million over 20 years, but he also says that he does not know how many people will be affected. If he discovers that many more people are affected, will he increase the sum, and if far fewer people are affected, will he decrease it?

Malcolm Wicks: We are about to publish a report examining the evidence base on that question, and the collection of that data is obviously at an advanced stage. The pensions industry also has an opportunity to contribute more money. As the Government have no legal liability, the word "compensation" is not appropriate—it is an assistance programme—but we feel that there is an ethical duty to act, as well as a need to restore confidence in pensions. I would hope that the pensions industry, too, recognises that responsibility.

Mr. Watts : Does my hon. Friend remember that in a previous debate the Conservatives supported a campaign to pay some form of compensation to this group of workers? Will he seek an assurance that they will join him in trying to get the insurance industry to pay a contribution into the fund?

2 pm

Malcolm Wicks: Even from a narrow economic and financial viewpoint, it would be a very useful investment, given the need to restore confidence and get the word "security" back into social security as regards pensions.
 
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Norman Lamb (North Norfolk) (LD): The Minister said that one of his stepping stones was to do more work on determining how many people might be entitled to help from such a scheme. How did he determine the sum of £400 million? Is it entirely arbitrary? He says that the Government believe that it is enough, but enough for what?

Malcolm Wicks: It is a very significant and substantial amount, and it relates to our arithmetic about the size of the scheme. It represents a very significant draw on Exchequer resources, and it will be larger if industry will make a contribution. I set out the four areas of work—stepping stones—and the six milestones. I think that Conservative Members were grappling with those two figures—[Interruption.] Well, milestones are a step forward in many respects. Given their difficulties, it is just as well that they are not in charge of collecting the evidence base. Once we have done that, we shall be able to consider these questions in more detail.

Mr. David Willetts (Havant) (Con): The Minister is right. I admit that I was confused as to how four steps could cover six stepping stones, but he explained that authoritatively.

The Minister said that the £400 million relates to the arithmetic of the number of people affected—that is, 60,000. Can he explain how?

Malcolm Wicks: In determining how much money we wish to seek from the Exchequer, we obviously bear in mind what the evidence is telling us. It is a very substantial amount in relation to those matters.

Mr. Malcolm Savidge (Aberdeen, North) (Lab): As my hon. Friend knows, Richards of Aberdeen Ltd., a company in my constituency, has a failed pension scheme. Can he assure us that the new clause and the timetable that he described give sufficient flexibility for hon. Members with affected constituents to be fully consulted before detailed regulations are brought in?

Malcolm Wicks: It is not possible to comment on a particular scheme, and my hon. Friend would not expect me to do so, as there are many hundreds in the same position. However, I am of course happy to talk to him and to other Members affected if that would prove helpful.

David Taylor (North-West Leicestershire) (Lab/Co-op): On 4 October 2000, 572 deferred pensioners and 371 existing pensioners at British United Shoe Machinery—BUSM—were hit by that company's closure. My hon. Friend talks of industry contributing to the cost of the scheme. What incentives does he plan to put in place to encourage them so to do? That would clearly improve the deal that the Government have rightly hammered out over the past weeks and months, which is most welcome to those who worked for the former BUSM—not the present company, which is an entirely separate management buy-out situated at Enderby.

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