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Kevin Brennan: Does the hon. Gentleman acknowledge that his calculations assume that all those involved will retire on the same day? The key to the amendment is the ability to take the assets in the pension funds in question and to use them more effectively than simply by purchasing annuities, in order to build a fund. The hon. Gentleman is being slightly misleading in his calculations. As for early-day motion 200, the word "full" does not appear in it.

Mr. Willetts: The hon. Gentleman has been very active on this issue and I would be interested to know whether he regards the new fund as sufficient to address the problems that he has identified. If he does not, what does he think would be a better way forward? I am trying to help him, and other Members on both sides of the House, to identify that. [Hon. Members: "Answer the question!"] I shall answer his question. I agree that it would be much better to continue a scheme rather than to wind it up and require the purchase of an annuity or deferred annuity. Ministers have still not made it entirely clear that they are committed to that course of action, but I agree that it would be better. Indeed, it is something that the pension protection fund will do in future. It is another argument for supporting our amendment.

We will set up one institution under the Bill that will take over the assets and liabilities of pension schemes in wind-up in future, so why does not the hon. Gentleman support our amendment that would add a separate compartment to the PPF to do that for schemes that already have a problem and are in wind-up? I agree with him, but his point is another argument in favour of using the approach that we set out in our amendment.

I know that many hon. Members wish to speak, and I have taken several interventions, but I wish briefly to touch on the Liberal Democrat amendment. It would
 
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tackle perhaps the greatest single omission from the Government's announcement—to which the Minister briefly referred—which was the issue of solvent wind-ups. Many hon. Members will have been approached by constituents who have been victims of solvent wind-ups. For example, I have constituents who were employees of Ballast UK. They lost out, but they will receive no assistance under the Government's announcement because the parent international company is solvent. That also applies to former employees of the Dalgety group and a Japanese bank in the City.

Andrew Selous (South-West Bedfordshire) (Con): Will my hon. Friend comment on the fact that it is curious that Ballast Wiltshire continues to be able to trade in the Netherlands, despite having so short-changed its UK employees? Does he agree that there is a case for the European Union to look much more seriously at companies that defraud their pensioners in one member state but continue to trade elsewhere in the Union?

Mr. Willetts: The issue first got on to the front pages with Maersk, although that company changed its mind and decided to support the company pension scheme. Maersk would not be covered by the provisions in the Government's amendment, and my hon. Friend makes an important and interesting point.

Bob Spink (Castle Point) (Con): Will my hon. Friend add to his list the Bradstock group, where there was a solvent wind-up that affects many of my constituents? They feel that the Government's treatment of them is terribly unfair.

Mr. Willetts: My hon. Friend gives another good example of solvent wind-ups that are not covered by the Government's new clause. The purpose of the Liberal Democrat amendment is to cover such people and I fully accept that there was a serious omission from the announcement.

I put the same question to the Lib Dems and to Members on both sides of the House: on what basis might we help the victims of solvent wind-ups? We should help them, and using unclaimed assets is the only feasible or practical way to do so. If the hon. Member for Northavon (Mr. Webb) can assure us that that would be possible under his amendment, I will look at it sympathetically. What I am not clear about is whether he envisages that the solution is higher public expenditure and, if so, how spending more public money in this case would be consistent with various statements from Lib Dem economic affairs spokesmen about their tax and spending plans. I have never found a reference in those statements to spending more money on the victims of pension wind-ups.

I have looked through the list of Liberal Democrat spending pledges and the victims of pension wind-ups do not appear, although I should be happy to go through the list with the hon. Gentleman because I hesitate to suggest that he may be proposing something with which his colleagues may not agree. As I cannot see help for the victims of pension wind-ups among the
 
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Liberal Democrat expenditure pledges, it would be helpful to know whether he regards his amendment as such a pledge.

Mr. Redwood: Is my hon. Friend advising us to support spending £400 million of public money? Is he advising us to support the outline Government scheme, or is he suggesting that the money is inappropriate, that the scheme will not work and that we should, therefore, be against it? I am not quite clear which advice he is giving us.

Mr. Willetts: I am sorry that my right hon. Friend has not found that my comments over the past 27 minutes answered all the questions he may have had about the Government's proposal. The real problem is that we know very little about their proposal. I welcome the £400 million that has been put into the scheme and I am proposing extra assistance, which would not be public money but would use the unclaimed assets of banks and building societies. That would be a constructive way forward that would involve no increase in public expenditure.

Alan Howarth: The hon. Gentleman has indulged in a variety of expressions of sympathy this afternoon. He has indicated that he would not rule out the possibility that it might be appropriate for assistance to be given to the victims of Equitable Life and to the victims of solvent wind-ups. As I agree that there is not the remotest fiscal scope for providing adequate help to all those deserving cases, how is it to be afforded? He suggests that the unclaimed assets will provide what is necessary, but is he not at risk of spending that nest egg several times over?

Mr. Willetts: The House may not face the decision today, but I am sure that as the penny drops about the very limited scale of the Government's announcement Members on both sides of the House will have to decide whether to explain to their constituents, "This is all there is and there is no more", or whether we should aim to do more. I do not claim that we could give 100 per cent., and we certainly need to see the figures. We are still waiting for Ministers to provide them. The money from unclaimed assets that the Chancellor identified in the Red Book would enable us to do more and we could plug a large loophole in what the Government have announced today—namely, the position for victims of solvent wind-ups. That is the proposition that I am putting to the House.

I have two final points about the lessons that we should learn from this unhappy episode. The first is on compulsion. Although I give less weight to it than Labour Members, one of the arguments that has been used is that people are entitled to compensation because they were obliged to join a pension fund. That raises questions about whether it would ever be conceivable to embark on implementing the proposals made by the Secretary of State 18 months ago for forcing people to save. If compulsion is to be used as a basis for Government liability when things go wrong, it seems to me that Members who are using the compulsion argument on this occasion will make it much more unlikely that a future Government would ever be willing to contemplate compelling people to save in any form. I
 
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should be interested to learn whether the Secretary of State or the Minister can envisage that Adair Turner, who has been commissioned to look into compulsion, would really make proposals, which they would accept, for compelling people to save, if when people were compelled to save we faced the arguments about Government financial liability that have been put today. That is the first lesson for the future.

Rob Marris (Wolverhampton, South-West) (Lab): Is not the hon. Gentleman setting up a straw man? Most of the compulsion that has been discussed has been based on models such as the Australian scheme where there would be compulsion to save in a money purchase scheme. The new clause offers no hope of financial assistance for people in the UK who were forced—as some employees were before 1988—to save in a money purchase works pension scheme.

Mr. Willetts: The hon. Gentleman may not be fully reflecting Adair Turner's commission. Nothing in the original statement said that he should look only at compelling people to save in money purchase arrangements; the remit was much wider than that.

My second point on lessons for the future is directly addressed to the Minister of State. Another reason for the obligation we face, to which the hon. Member for Cardiff, West referred—as have I on several occasions—is that people were led to expect that in some sense the money in their company pension schemes was safe or guaranteed. May I, therefore, quote to the Minister some of the things that he and his Department have been saying about the PPF?

A DWP fact sheet published at the same time as the Pensions Bill states that

"members can be reassured they will still receive the core of the benefits to which they are entitled".

In Committee, the Minister said that people's pension rights "will be safeguarded" and that

"they will get 90 per cent."—[Official Report, Standing Committee B, 30 March 2004; c. 483–88.]

That is 90 per cent. of the pension they were entitled to expect. With the PPF, the Minister and the Secretary of State are in danger of repeating exactly the same mistake that was made on company pensions. They talk about the fund as though it safeguards, reassures or guarantees, yet we all know that without the Government standing behind it and without the rate of levy that has been suggested, it can offer no such guarantee.

The Minister chose his words unwisely on several occasions in Committee when he was referring to the PPF. If ever the fund cannot provide the 90 per cent. that has been promised, the Minister has already said sufficient for future Members to come to future debates in this place and say that Ministers told people that they would get their 90 per cent. We should all be careful about the words we use when talking about pensions and I am sorry to say that Ministers have not been careful when talking about the PPF in our debates on the Bill.

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