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Mr. Andrew Miller (Ellesmere Port and Neston) (Lab): If my hon. Friend is relying on a key date that was triggered by an Act that he now recognises as flawed, is not that an illogical date to choose? If there has to be a date—I do not think that there should be—would it not be better to choose the date on which the 1995 Act received Royal Assent?

Malcolm Wicks: Clearly, there must be some date. The point at which the key provisions of the 1995 Act come into force is important. May I emphasise to my hon. Friend that I have said that I feel that a starting point must bear some relation to the 1995 Act? We have an open mind, not an empty mind, on that. If he reads our amendment carefully, he will see that it is deliberately drafted in broad terms as an enabling measure. I hope that he will take some comfort from that.

2.15 pm

The amendment tabled by the hon. Member for Northavon (Mr. Webb) would require the financial assistance scheme to begin making payments within six months of this Bill coming into force. I have already explained the milestones that we are setting to make sure that we have a body in place by this time next year and to make payments as quickly as possible thereafter. Including a deadline for payments in legislation at this stage of design, however, could lead to wasted effort and a poorly administered scheme. We would be doing nobody any favours by rushing these proposals through, least of all the very people whom we are trying to help.

The second amendment tabled by the hon. Member for Northavon would allow schemes that are closed while the sponsoring employer is solvent to qualify for the financial assistance scheme. The term "closed scheme" is generally applied to schemes that are still operating, albeit closed to new members. I assume that he was referring to schemes in wind-up. If so, the amendment would allow schemes that wind up underfunded, but with a solvent employer, to qualify for assistance under the proposed assistance scheme.

At this point, it might be helpful if I were also to deal with the amendment tabled by my right hon. Friend the Member for Birkenhead to that amendment, which would limit the qualification to solvent schemes that wound up prior to 14 May 2004. One of our key concerns has been to ensure that solvent companies remain responsible for their pension provision. A pension promise made should be a pension promise honoured. We have introduced regulations that can be used by trustees of schemes that started winding up after 11 June 2003. Those regulations place a debt on solvent employers to pay the full costs of members' benefits if their pension scheme is wound up. Solvent companies must be held responsible for the pension provision that they have arranged.

The third amendment put forward by the hon. Member for Northavon would set the level of assistance at no less than the amount that would be provided by the pension protection fund. All of us want to ensure that the people who will be helped by the financial assistance scheme receive meaningful levels of benefit. The final level of assistance that can be provided will depend on
 
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several factors, such as the number of claims that are submitted, the final size of the fund and the method of delivering assistance. At this stage, however, it seems unrealistic to expect that assistance will be set as high as future pension protection fund levels, as in future members will benefit from cover paid for by a premium to the pension protection fund.

In the light of what I said, I would hope that my right hon. Friend and the hon. Gentleman might consider withdrawing their amendments. Those are all the amendments to the Government proposal to set up a financial assistance scheme.

The amendment tabled by the hon. Member for Havant (Mr. Willetts) relates to the pension protection fund. It would, in effect, make the pension protection fund retrospective. It provides an apparently simple answer to a complex problem—[Interruption.] He says from a sedentary position that that is not necessarily a bad thing. He normally reverses that by providing complex answers to simple problems. However, the pension protection fund will be financed through a levy on occupational defined benefit and hybrid occupational pension schemes. Retrospective cover would mean that this levy would be required to meet unknown and potentially very large liabilities. It is possible that those additional costs could threaten the viability of the fund itself. In addition, it would be unfair to place such a disproportionate burden on levy payers who are running schemes. We have always maintained that the new fund is similar to an insurance scheme in some respects: it should not cover people against events that have already happened. In view of what I have said in setting out the Government proposal, I therefore ask the hon. Gentleman to withdraw his amendment.

Finally, I should like to deal with some small amendments to clauses 265 and 273 that are consequential on proposed new clause 34. The amendments to clause 265 simply add the financial assistance scheme provision to the list of provisions that may be modified by regulation—if necessary—when being applied to either a hybrid or a multi-employer scheme. The amendment to clause 273 will add the financial assistance scheme provision to the list of provisions that require use of the affirmative procedure for any statutory instrument made under them, for the reasons I have just given.

Mr. Edward Garnier (Harborough) (Con): I apologise for not being here at the beginning of the Minister's speech. I had duties elsewhere.

I understand the Minister's wish to be careful about open-ended commitments that would expose the Treasury to huge amounts of liability. Let me remind him, however, that the Lord Chancellor's Department—the Department for Constitutional Affairs—has encouraged access to the courts through what is called "after-the-event insurance", which underpins something called "conditional fee arrangements". It seems to me that the principle that the Department has opened up applies directly to the recovery of lost pensions. The Government are now setting up an after-the-event insurance scheme. The
 
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problem for my constituents, many of whom have worked for British United Shoe Machinery, is that the system will not—[Interruption.]

Madam Deputy Speaker: Order. I hope that the hon. and learned Gentleman will soon be bringing his intervention to a close.

Mr. Garnier: I shall do so immediately, Madam Deputy Speaker. The problem is that the system set up by the Minister is nowhere near adequate to protect my constituents, including those who have worked for BUSM, who have seen their pensions disappear.

Malcolm Wicks: Naturally, I anticipated that question. I could give a very lucid answer, but given the lateness of the hour and the disruptions we have experienced, I wonder whether the hon. and learned Gentleman would allow me to write to him—after I have taken advice from my learned friends, of course.

Kevin Brennan (Cardiff, West) (Lab): Does my hon. Friend agree that it is not just a matter of sympathy in cases such as this? We are talking about defined benefit schemes, not defined contribution schemes. The benefit was supposed to be a promise. As late as 2002, the Financial Services Authority's "guide to the risks of opting out of your employer's pension scheme" stated:

"Some types of employers' schemes (the ones called 'final salary' or 'defined benefit' schemes) give you a guaranteed pension. The amount of pension you get from a personal pension is unpredictable".

That makes it pretty clear why the state has some responsibility to act, regardless of whether it is set down in legal terms.

Malcolm Wicks: I agree, and it is important to remember that many people had to join a pension scheme as a condition of employment.

A significant number of Members on both sides of the House have represented constituents in dire straits very ably, but I think my hon. Friend the Member for Cardiff, West deserves a special mention as a parliamentary champion of this group of workers, and indeed as a parliamentary hero—[Interruption.] One among many, I am sure.

Opposition Members made fun of my confusing stepping stones with milestones. Let me say that one step for our Department is a giant step for our Department.

I can assure the House not just that we have the outlines of a plan, but that we have drawn up a clear route march towards implementation. By the end of May we shall have established our relationship with key partners, including trade unions, as all levels. Over the summer we will be doing critical work on the design of the scheme so that by the end of November we will be able to consult on regulations. By the spring of next year—just one year away—we will have a scheme in existence, with a view to being able to make the first payments as soon as possible.

We have a clear plan for the future with the pension protection fund, but there is a current and grave pensions injustice. Our proposals will bring support to decent, hard-working people—those whom I describe as proper people—and I commend them with enthusiasm to the House.
 
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