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Mr. Terry Rooney (Bradford, North) (Lab): For many years, I had the dubious privilege of serving on the Committee that considered every social security Bill that went though the House. Not one of them gave me the pleasure that this Bill has. Sadly, I did not serve on the Standing Committee considering it. For the one time there is good news around, I was excluded. There is probably a message for me in that.
We need to understand that in every workplace in the country over the past four or five years, the biggest single issue has been security—security of employment and security of pension. When we look back at a decade of financial scandals that go wider than pensions—for example, BCCI, Barings bank, Equitable Life—there is a general suspicion out there, rightly, that the whole financial world is a nest of vipers ready to rob people of their money and escape to sunnier climes.
There may be imperfections in the Bill that still need ironing out, but its provisions restore people's peace of mind like nothing has in the past 50 years. The Bill will also reinforce the confidence of people engaging in the savings habit. We know that the savings ratio goes up and down, and there are debates about what it should be. The Bill will give people confidence in the general financial services sector and encourage them to place their money in savings again. We need to understand that.
I want to restrict my remarks to clause 224, which concerns the requirement for knowledge and understanding by individual trustees. In 1986, I was appointed chairman of the west Yorkshire superannuation fund, which had 45,000 contributors, thousands of beneficiaries and £2.5 billion-worth of assets. I had no qualifications to hold that position, had received no training and had never been a trustee of a
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pension scheme, but because of the political circumstances in west Yorkshire at the time, I was made chairman of that august organisation. I am happy to say that when I left four years later, the fund had nearly £4 billion in assets, so perhaps I did not do such a bad job.
The way in which member trustees are chosen requires serious consideration—for example, men are chosen too often. Far too often, Joe, for example, who has worked for an organisation for 40 years, who is a good egg, who buys his round down at the pub and who is popular, is chosen. That is not good enough. Whenever somebody takes out a financial services product, they must consult an independent financial adviser. On mortgages, for example, three levels of service are available, from execution only to full advice. However, pensions affect people for between one third and one quarter of their lives, but people do not know whose hands their pensions are in. Trustees of pension funds are often rank amateurs, and, although I do not intend to disparage any individual who is a trustee, we must do better.
"An individual to whom this section applies must have knowledge and understanding of the law relating to pensions and trusts".
The Library contains about 47 yd of books on the law relating to trusts, never mind pensions. The wonderful Child Poverty Action Group handbook contains 700 pages on pension law, but that is a brief summary. We must move to a situation in which courses, which lead to an NVQ2 or NVQ3, are run in centres around the country to a set curriculum, proving that people understand the matter. Most occupational pension funds exist in organisations where trade unions are recognised, and it would be magnificent to use the union learning fund and the union modernisation fund to provide training and education so that member trustees have the understanding to challenge the experts.
In every single scheme that has gone down, the money was there at one time, but then it was gone. In those circumstances, where were the auditors and the actuaries on the minimum funding requirement, and who was signing off statements? Frankly, member trustees have been deceived, duped and misled. I should not say anything else because legal cases may occur, but we must give member trustees the tools to do the job. It is not sufficient simply to put a clause in a Bill, and I would like training to be provided.
We have all received copious briefing notes about the situation from the TUC over many months. The TUC needs to put up, because it has a responsibility in the matter, as members of trade unions are suffering as a result of how things were done in the past. Trade unions must be honest enough to say, "We want the highest quality member representatives as trustees that we can get, and we will play our part in doing that." I feel very strongly about that, and I hope that my friend the Minister, who has been with me in the trenches over many years, will take my suggestion forward.
Over the course of many months, the Secretary of State and the Minister have consulted, questioned, discussed and debated with Members of this House—I think on both sides, but certainly on the Labour Benches—to try to find ways to get out of the mess that
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we were in. I thank them for the openness, frankness and candour of those discussions, because the Bill that we have today is the better for it.
4.45 pm
Annabelle Ewing (Perth) (SNP): I am pleased to be called to speak in the Third Reading debate on this very important Bill.
The Bill is welcome in general terms. Its innovations include the pension protection fund, which I am pleased to see come to fruition, although it is somewhat overdue. The creation of the office of the pensions regulator is welcome, but I hope that its regulation will work better than has often been the case in the recent past. I hope that those measures will go some way towards restoring confidence in the pensions sector, which has sunk to an all-time low in recent years.
The report on women and pensions is a step in the right direction, and I congratulate the hon. and learned Member for Redcar (Vera Baird) on wresting that concession from the Government. However, I agree with the hon. Member for Northavon (Mr. Webb) that the Bill is a missed opportunity in that it fails to make substantive progress in that important area.
I welcome the Government amendments that were tabled, albeit at the eleventh hour, on the key issue of compensation for workers who, through no fault of their own, have lost out on their occupational pensions. During yesterday's constructive debate, Members on both sides of the House acknowledged that it was a good day for politics—leaving aside the dreadful events of the afternoon—because it showed that the Government were actually listening to the people whom they are there to serve, which has become extremely unusual.
It was helpful to receive some clarification on the likely timetable for the roll-out of the proposals. I am glad that we secured the confirmation that they will be dealt with by the affirmative resolution procedure, which will allow each hon. Member to vote on the detail of the proposals in accordance with the statements that they have already made.
I very much regret that during yesterday's debate the Minister resisted all attempts to extract details of the likely level of compensation that workers may expect to receive. Many of them have waited years for action and justifiably want to know, in light of the proposals put forward last Friday, what percentage of their lost pension they may expect to receive. We were not given any meaningful information on that; nor were we given any reasonable explanation of how the £400 million figure was arrived at. With all due respect to the Secretary of State, neither did we get that information today. I fear that down the line many workers may find that the payout that they receive is much less than that for which they are now hoping. We await the specific proposals that the Government are to bring forward by the autumn.
The Minister and the Secretary of State should be aware that they must come up with the goods. They promised yesterday and today that the proposals would result in "significant help." I appreciate that the new Labour Government have frequently stretched the English language—the Minister of State for the armed forces gave an interesting definition of "report" in a recent Adjournment debate—but "significant" means
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just that to every normal thinking person. The Government have promised significant help and they must deliver. Any failure to respond to the workers' legitimate case will be rightly regarded as entirely cynical.
Apart from the important issue of women and pensions, the Bill represents a missed opportunity on another key matter. It fails to provide for restoring the link between pensions and earnings. The Tories first broke that link, but, like many other policies, new Labour took it up enthusiastically when it was elected in 1997. It has left many pensioners in poverty and that is unacceptable in an enlightened 21st century. Instead of a clear commitment to providing a decent, basic state pension, we have an approach based on means-testing that is unduly complex, costly to administer and acts as a disincentive to save. It is therefore a pity that the Government have not seen fit to take the opportunity of the Bill to tackle pensioner poverty head on. That will neither go unnoticed nor be forgiven by pensioners in Scotland and elsewhere in the United Kingdom.
I am conscious that other hon. Members wish to speak, so I conclude by saying that, leaving the matters of concern to one side, the Bill is generally welcome and I am happy to lend my party's support to it on Third Reading.
4.52 pm
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