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Sir John Butterfill: On a point of order, Mr. Deputy Speaker. It will not have escaped your attention that we have been dealing this afternoon with 97 pages of Lords amendments, which occupied their Lordships for more than 90 hours of debate. This House has been given four hours to debate what the Lords took 90 hours to debate. This subject is of vital importance to citizens all over this country, but debate will be curtailed simply so that the Government can get in their wretched Hunting Bill, which more than 56 per cent. of the population do not want anyway. Is not that an abuse of this House?
Mr. Deputy Speaker (Sir Michael Lord): Order. The hon. Gentleman is an experienced Member of Parliament and he knows that that is not a matter for the Chair. We are also now taking away from what time we have for the next debate.
Mr. Pond: I beg to move, That this House disagrees with the Lords in the said amendment.
Mr. Deputy Speaker: With this we may discuss Government amendment (a) in lieu, thereof
Mr. Pond:
I am sure that if the hon. Member for Bournemouth, West (Sir John Butterfill) had had the
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opportunity to hear my arguments on the last group of amendments, he would not have felt it necessary to vote against them and use up still more time.
In the other place, clause 287 was amended on the subject of the funding of the financial assistance scheme. Lords amendment No. 416 requires that the FAS is paid for entirely from public funds and not in part or in full by way of a charge, levy or contribution from the private sector. I accept the spirit of the amendment, to the extent that imposing any sort of compulsory charge, levy or contribution on the private sector does not figure in our plans for the FAS. Indeed, my noble Friend offered repeated assurances in the other place that we will not impose such charges. That is just as well, because we do not have powers to do so under clause 287.
The amendment made in the other place has, however, a second and much more unwelcome effect. By prescribing that the FAS should be a scheme for making payments entirely from public funds, the amendment disables the FAS from receiving voluntary donations from the private sector. Because the FAS will increase confidence in pensions and will benefit the industry as a whole, we feel that it is right to keep open the option of obtaining voluntary financial contributions from the private sector. We are most grateful for the valuable assistance in kind offered by the pensions industry to date, both in sharing its expertise through the FAS industry working group and in supporting the data collection exercises that enhance our understanding of the problems that the FAS must address. We maintain a firm hope that the industry will further support the Government's leadership in assisting the individuals and we believe that it has a strong interest in doing so.
Mr. Waterson: So far, has any company, industrial organisation or other body or individual indicated in any shape or form that they are remotely intent on making any voluntary contributions to the fund?
Mr. Pond: The hon. Gentleman knew the answer to that question before he decided to put it on the record. My point is that we should leave open the possibility that we might receive contributions from the private sector, because it will have a strong interest in providing them. As it stands, the Bill would shut the door in the face of anyone outside the Government who is willing to support our commitment to help the victims of pension wind-ups. That will ultimately reduce the potential level of financial assistance made available to those individuals, which none of us wants—although, sadly, we have seen attempts to vote out many aspects of the Bill, which could put that at risk.
I urge Members to disagree with the Lords in their amendment and to support our substitute amendment, which makes it explicit that regulations under clause 287 may not impose a levy or charge on anybody for the funding of the FAS. It does not, however, rule out voluntary contributions to the fund. I hope that Members will support that approach.
Mr. Waterson:
Although I am not sure that the word "concession" passed the Minister's lips, this is in fact another concession from the Government, for which we are grateful. I do not anticipate a Division, because we accept the Minister's comments on the drafting and technical points, and that his version may be an improvement on that proposed by the Lords.
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The background to the concession is important, however. We all know that a situation had developed in which it became clear that more than 60,000 people had lost all, or a large proportion, of their pension rights and there was a mounting cross-party campaign on the issue. The Government were faced with a dilemma. They had set their face against doing anything more, but it looked increasingly as though they would be defeated in the House by a combination of the Opposition parties and Government Back-Bench rebels. So they probably panicked, but then, at the last minute, they cobbled together the so-called financial assistance scheme and produced the magic figure of £400 million.
Many people have tried to find some justification for that figure and the basis on which it was arrived at. We have yet to find the envelope on the back of which it was sketched out, but it is perfectly clear that it was the amount that the Treasury was prepared to make available. As the then Secretary of State said:
"The Government will therefore make available £400 million of public money . . . with the possibility of further contributions from industry."—[Official Report, 14 May 2004; Vol. 421, c. 32WS.]
A few days later, the Minister for Pensions said:
"It is open to industry to offer further support. We hope that that support will be forthcoming."—[Official Report, 19 May 2004; Vol. 421, c. 983.]
The Minister who has just opened this debate was not entirely clear in his answer to my intervention, but I think we can take it that from that day to this no one—but no one—in industry has come forward to say that they might even consider making any kind of offer to top up the £400 million, exactly as we predicted at the time. That particular fig leaf has, sadly, been torn away from the Minister—[Interruption.] I do not want to go too far down that road; it is nearly dinnertime.
Following that announcement in the middle of May, the whole credibility of the FAS has been systematically crumbling, partly due, it must be said, to friendly fire from the Government. There has been a series of leaked announcements about the people and situations that will not be covered by the FAS. We have seen a consistent retreat from the package. I can understand why Ministers might want to do that; it was clear from the start that the sum was woefully inadequate to meet the needs, especially in the cases put forward genuinely and often with passion by Back-Bench Labour Members representing their constituents.
5.45 pm
It has been indicated that solvent wind-ups will not be included in the package, even though it is impossible to make out the moral distinction between workers who have lost everything due to a solvent wind-up and those who have lost due to an insolvent wind-up. There is also the so-called gap year. Ministers or officials let it be known that, because they had changed the priority order, there was to be a period between May 2004 and April 2005—when the PPF is supposed to come into force and open its doors; at the present rate, the queue will stretch round the building—during which people would not be covered by the FAS.
That position was clearly unsustainable so the Department found another wheeze: to throw some of the liabilities forward into the PPF itself. The crucial
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thing we have to remember about the amendment is that, basically, it is recognising the inevitable: there is no way that industry will make contributions. Although we must let Ministers retain a certain amount of dignity, no one ever seriously expected them to impose a further levy, on top of all the other imposts they are intending to make on good, well-run companies and pension schemes, but they had that forlorn hope that people would be queuing up to give them the money. It is clear that that will not happen.
All sorts of things have happened to the Bill, bits have fallen off and new bits have been added, but one of the few wholly consistent themes running run through it from start to finish—like the word Blackpool through a stick of rock—has been that the PPF will not be retrospective. In fairness, the official Opposition and, I think, the Liberal Democrats, too, have always accepted that principle. The analogy, much overworked in various debates, is that one cannot insure one's house against fire after it has already burned down. Members on both sides of the House have accepted that the PPF, funded by the levy—going forward, in a phrase that the Minister has used more than once—cannot consider settling claims that have arisen by the date that it opens its doors; yet the other day, very quietly, under the cover of departmental questions, in which the matter received no mention at all, under the cover of a debate in the Lords on these very issues, in which it received no mention at all, not even as a footnote, the Minister put out a short statement, indicating that—surprise, surprise—some schemes that got into difficulties during the so-called gap year could fall within the PPF's responsibilities.
Since then, attempts to explain that statement have taken two separate directions. The Minister in the Lords, Baroness Hollis, made the point that there had been considerable media interest in the Minister's statement and said that she wanted to reassure the House. She continued:
"The Statement made on Monday simply confirmed how existing provisions in the Bill would apply . . . The position has not changed . . . the PPF has not, and cannot, become 'retrospective'."—[Official Report, House of Lords, 15 November 2004; Vol. 666, c. 1212.]
That seems fairly clear. However, on the day that the announcement was made, it became clear that, as is their wont, the Government had spun it to the newspapers. The spin put on it by a Government spokesman was that this was good news—the Minister used that very phrase in an earlier debate this afternoon. Indeed, it was good news, especially in the context of the Turner and Newell pension scheme.
I know about the Minister's reluctance to talk about that scheme; that is perfectly understandable and we wish it well. We all hope that its difficulties will be resolved in due course. The way things were put, however, meant that people in that position—perhaps I can stop referring to that particular scheme, and instead refer to "those in that position"—[Interruption.] The Turner and Newell scheme is a useful reference point, not least because it involves some 40,000 people and a shortfall of nearly £900 million on paper, so it is not exactly insignificant, but my point is that there must be a series of much smaller schemes that are in the same kind of no man's land, or what was no man's land until the Minister's statement clarifying the
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position. The indication is that the position has changed for people in that unfortunate situation. So which is right—the version in the Lords, that the statement changes nothing, or the version from the Minister of State to the effect that it does make a change, and it is good news because it is helping people in such a position?
I hope that when the Minister responds he will take the trouble to explain—I have tabled a parliamentary question on this subject because I think that it is sufficiently important—what estimate the Department made, before it issued that statement, of any extra liabilities that were likely to fall on the PPF as a result of that statement, or clarification if they prefer to describe it as such. That is an important question, to which the House deserves an answer.
What is at issue actually goes further than that, because it is suggested that we have had a tacit acceptance by Ministers that the £400 million fund is inadequate for the purpose, and hence this attempt, as I have said, to throw forward liabilities on to the PPF, completely contrary to the entire philosophy underpinning the Bill.
Many Members of the House will be familiar with the work of Dr. Ros Altmann, who has done sterling work over a long period in trying to help the now 65,000 or more people who have lost their pension rights through no fault of their own. She has done some number crunching, which actually does not tell us anything very new because I do not think that anyone, except possibly Ministers, actually believes that £400 million is remotely enough to compensate those people. Indeed, the Secretary of State admitted as much the other day in questions when he made a very clear distinction between assistance and compensation. One thing is very clear: there will be a large gulf between the benefits that people will receive under the PPF and the assistance that they might receive under the FAS. Let no one be in any doubt about that.
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