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Mr. Lilley: The hon. Gentleman is getting a little worked up and he seems to think that I was arguing for lower pensions. On the contrary, I argued for increased pensions for everybody with a redistributive element to ensure that even those on low earnings ended up with a better pension, above the means-tested level.
Mr. McWalter: Is the right hon. Gentleman saying that he believes that the basic pension should be £105 for everybody? Or does he think that those who do not receive a full basic pension should be worse off than those who do? The Conservative party did not even understand the question about women who have worked hard all their lives but do not have a contributions record. My hon. Friend the Member for Northampton, South (Mr. Clarke) asked what the Conservatives would do for such women, but none of them seemed to understand or be able to respond to that question.
We call the Government's policy responding to people's needs, but the Opposition call it means testing. If means testing sorts out poverty and gives people a decent quality of life—as well as rewarding people who have worked hard and saved all their lives—it is fair, just and responsive to need. I have heard nothing from the Opposition, or from my right hon. Friend the Member for Birkenhead (Mr. Field), that remotely begins to address the agenda that my right hon. Friend the Member for Oxford, East adopted—he did a very good job—in order to reconcile those principles.
3.14 pm
Mr. Roger Gale (North Thanet) (Con): I wish to move away briefly from the mainstream of the debate and concentrate on those words on the Order Paper about competence of delivery. I wish to introduce the Under-Secretary of State for Work and Pensions, the hon. Member for Gravesham (Mr. Pond) who will shortly respond to the debate, to Mrs G. She is a real person who lives in Birchington in my constituency and who telephoned my office today. She is in her 70s and is very proud and independent. She has inoperable cataracts and suffers from tinnitus. She is on her last post office order book, and she represents thousands like her in this country. She has been told that she cannot have another book. She has also been told by Post Office staff that for reasons of confidentiality they cannot help her to access her money through her PIN number. She cannot read her PIN number because of her eyesight.
The Government documents that Mrs G has received have simply told her that all the help she needs will be available. Her experience is that such help is not available. When she telephoned my office today she said that she had met an elderly gentleman in floods of tears in the post office because he could not access his money under the new system.
The system that the Government are introducing is not ready and it is not working. It is being imposed on thousands of elderly people. I have no problem with its introduction from now on, but it should not be done retrospectively. It is being introduced in a manner that is unfeeling, uncaring, insensitive and causes distress.
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The Parliamentary Under-Secretary of State for Work and Pensions (Mr. Chris Pond): I would like to assist both of the constituents the hon. Gentleman mentions by suggesting that he alerts them to the fact that those who cannot operate any form of account, including the Post Office card account, can be paid by cheque. We have ensured that there are no circumstances in which people who cannot operate an account will be left without their money. I hope that he will communicate that to his constituents quickly.
Mr. Gale: Some people do not have accounts into which to pay cheques, so that does not help, unless the Minister is talking about a money order. There is a modest group of people for whom the present system does not work. Those people should be able to retain their order books for the rest of their lives. That would work. What is proposed at present is not working.
3.17 pm
Tom Levitt (High Peak) (Lab): About 100 years ago, a gentleman by the name of Frood developed a successful line of brake linings. The company became Ferodo, a name synonymous with brake linings. In turn, it became part of the Turner and Newall group and remained so for many years. Some 10 years ago, Ferodo—which is still known by that name in the High Peak—became part of the Federal Mogul group, an American-led consortium. To this day, of the 20-odd sites that Federal Mogul has across the UK, the one at Chapel-en-le-Frith is one of the most successful and profitable. Indeed, just a few years ago, it could boast a thousand employees. Although it does not have so many today, it is still—by some way—the largest private sector employer on a single site in my constituency.
I do not need to remind the House that the Turner and Newall pension fund that Federal Mogul inherited is in considerable difficulty. However, it has not yet folded and talks continue on how best the company can meet its obligations to its work force, past and present and across the globe, not just in Chapel-en-le-Frith. Some 40,000 people in this country are members of the Turner and Newall pension fund. Only 10 per cent. currently work for Federal Mogul. Half of them are existing pensioners and the remainder are deferred pension holders, who have at some point made a contribution to the fund but have not yet started to draw their pensions.
All those 40,000 people were led to believe throughout, no matter when they worked for the company, that in return for their contributions and those put in by the employers, there would be a pension when they came to retire.
Until a little while ago, there was no reason to think that there was a problem, but in fact problems arose about three years ago when the American company Federal Mogul—not Ferodo or Turner and Newall—put itself into chapter 11 administration in the United States for reasons to do with protection against insurance claims on asbestos cases, as my hon. Friend the Minister said, and the company's situation in the United States. The reasons for going into administration had precious little to do with the way in which the company was operating in the United Kingdom.
Nevertheless, even when the company went into administration, it was not flagged up that that could lead to a problem with the pension fund. Indeed, as far
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as we know, that pension fund was muddling along, no better and no worse than any other, and people had a full expectation of receiving their pension. Indeed, a letter went out in July to all fund members from the trustees and the company's administrators to say that some issues had to be addressed. However, it was not until about three weeks later that a second letter went out saying that there was a crisis and that it was impossible to see how the pension fund could meet its obligations. Again, that is an interesting issue because no real problems were mentioned before.
The problem is that the company has been in administration for three years and needs to come out of it. Its situation is not sustainable and it has been in administration for longer than originally anticipated. If I understand the rules correctly, the pension fund of a company in administration has to be performing at a higher level, more effectively and profitably, than the pension fund of a company that has not gone into administration if it is to make the leap out of administration. It is that required level of funding and performance that is causing all the problems.
In response to the situation in Chapel-en-le-Frith, across High Peak and elsewhere, a local Conservative councillor in Chapel-en-le-Frith has started going around doing a passable impression of Mr. Frazer of "Dad's Army", taking a "We're all doomed" approach to solving the problem. That has done nothing other than generate panic, concern and unnecessary worry. We need all groups to work together to ensure that the company meets its obligations.
Over the past few weeks, I have met fund members, corresponded with pensioners and deferred members, visited the site several times—I am going there again next week—and contacted other Members of Parliament. My hon. Friends the Members for Coventry, South (Mr. Cunningham) and for Coventry, North-West (Mr. Robinson) and I have established an all-party support group for pension fund members of Turner and Newall. As a group, we met my hon. Friend the Pensions Minister in the middle of August to ensure that he was fully acquainted with our concerns and those of our constituents. I assure the House that he was and that he takes the matter seriously, as he described earlier. Next week, our group has meetings with the trustees of the pension fund and the company's administrators to express the concerns, which I know from today's comments are shared by hon. Members on both sides of the House, about the future of that pension fund and the 40,000 people who are its members in one way or another.
Mr. Nigel Waterson (Eastbourne) (Con): I am listening carefully to the hon. Gentleman. From his discussions with Ministers, has he discovered whether the pension scheme will come under the terms of the financial assistance scheme if it goes into wind-up, which we all hope does not happen, between now and next April?
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