Pensions Bill

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Malcolm Wicks: The discussion has been useful and I thank my hon. Friend for his contribution. He has become a significant champion of this group of workers.

Clause 98 defines those schemes that are not eligible to be taken over by the pension protection fund. Subsection (2) specifies that those schemes that are in the process of winding up immediately before an appointed day are ineligible for compensation.

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Amendment No. 2 would enable members of schemes that are in the process of winding up before the introduction of the PPF to become eligible for compensation. That extension would effectively make the PPF retrospective. Therefore, the question of how that would be paid for arises, and that has been discussed.

Amendment No. 273 would do the same thing. Amendment No. 274 would, similarly, cover members of schemes that have completed wind-up before the introduction of the PPF. Those extensions would also effectively make the PPF retrospective.

Amendments Nos. 276 and 277 specify that the initial levy and the pension protection levy should be used only to compensate members of eligible schemes that commence wind-up after the introduction of the PPF. We cannot disagree with that because it supports our intention as set out in the Bill. However, I realise that amendments Nos. 276 and 277 were meant to be considered alongside amendments Nos. 273 and 274. Those amendments would make schemes that are in the process of winding up or have completed wind-up before the introduction of the PPF eligible for compensation. The effect of amendments Nos. 276 and 277, if taken with amendments Nos. 273 and 274, would merely leave open the source of funding for retrospective compensation payments. That would mean that the PPF would take on unknown and potentially very large liabilities without any obvious source of funding for the compensation. However, I acknowledge that there are good intentions behind the amendments.

My ministerial colleagues and I have spent a lot of time meeting hon. Members and scheme members to hear their concerns. We never refuse such requests and there are a couple of forthcoming meetings. It is worth noting that the Secretary of State has met workers from ASW, Dexion and UEF. I have met workers from Kalamazoo, Felix Schoeller and Dexion. My predecessor, my right hon. Friend the Member for Makerfield (Mr. McCartney), met workers from UEF, ASW, Astra Training Services and Ravenhead, and the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Liverpool, Garston (Maria Eagle), met workers from Famous Army Stores. We have also met concerned workers from solvent employers, including Parsons and Triplex. Therefore, we have had an opportunity to listen to and learn from those directly affected, and to try to explain the Government's position to them.

When I say that I sympathise with the people who will not receive the pensions that they were expecting, I, too, choke on the word ''sympathise'' because it is inadequate to express our feelings for those people. It is one thing to hear examples in Committee, but when we are face to face with them and hear what that means for their hopes and aspirations, and when they talk with what I would describe as quiet dignity about the impact on their health, welfare, and sometimes their marriages, the word ''sympathise'' does not begin to describe our feelings. We are examining closely all the suggestions that have been put to us, but given workers' anxieties, which we understand, we owe it to those affected to do so without raising expectations.

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There are formidable difficulties involved in what hon. Members propose. As I said, retrospective cover would mean the fund taking on unknown and potentially very large liabilities. Such provision would also prove administratively difficult, if not impossible, to carry out for those schemes that have completed the wind-up process. With the prospect of guaranteed coverage for schemes that have not yet completed that process, some employers might seek to abandon their pension liabilities, thus further increasing costs on the new PPF. Such additional costs could threaten the viability of the fund. They would also be likely to place an unfair and disproportionate burden on levy payers.

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Amendments Nos. 2 and 273 could also encourage schemes to slow down the winding-up process, in the knowledge that they would be covered by those provisions. Let me reassure hon. Members that the Government are sympathetic—to use that word again—to all those who will not receive the pension that they worked so hard to build up for their retirement. As my hon. Friend the Under-Secretary explained this morning, we are currently exploring with industry representatives a basis on which we can establish firm estimates of the extent of the problem of defined benefit schemes winding up under-funded. We are also assessing the numbers affected and the potential scale of losses. Once those data have been collated, my right hon. Friend the Secretary of State for Work and Pensions will be in a better position to report more fully the findings of our examinations and to suggest the appropriate course of action, if any. If I were a Back Bencher whose constituents had been affected, I too would be impatient to hear more, but that is as far as I can go today.

I understand the time scales involved, and that we have a duty to report to the House on this matter as soon as we have the information. That is our considered position. In asking the hon. Member for Eastbourne to consider withdrawing his amendment, I would say that it is better to have such a considered position than to be all over the place on the question of how we can deal with the issue of cost.

Mr. Waterson: I do not know who the Minister means when he talks about people being all over the place—

Malcolm Wicks: You.

Mr. Waterson: I thought as much. I notice that he singled out the hon. Member for Cardiff, West when he was talking about the good intentions behind amendments. The Minister should move on. I am sure that we all take what he says about sympathy at face value, as do the people affected. We have all, both Ministers and shadow Ministers alike, had those meetings, and there will no doubt be more, and more discussions on ways of dealing with the problem. I welcome the admission that the Government are to produce some hard figures. I do not want to understate the challenge, because the Opposition have tried to find ways of producing those, and it is quite a large task. The Government are the people to do it, and I am delighted that they now agree—I wonder why they

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have been so unwilling to admit that for so long. However, that does not deal with the question of how compensation will be structured once the figures are known.

I am minded to withdraw amendment No. 2—on one simple condition. The Minister has told us that the Government are looking into the figures; as I have said, that is welcome. I will withdraw the amendment if he undertakes not to exclude—indeed, actively to consider—the use of unclaimed assets, now that the Chancellor in his Budget proposals has apparently swept away any practical problems. I am not asking the Minister to commit himself to that as the preferred option, but if he undertakes to ensure that that is one of the options that the Government will consider, I will happily seek to withdraw the amendment—although of course, hon. Members may not wish me to do so. Otherwise, I shall be minded to press amendment No. 2 to a vote.

The hon. Member for Cardiff, West seems to resent Committee members supporting his amendments, which could make for a rather unhappy Committee stage for him. I hope that that does not mean that he is pulling his punches.

As a former Back-Bench Member under a Conservative Government, perhaps I could give the hon. Gentleman a bit of advice: it is always as well to pin down one's ministerial colleagues pretty firmly before deciding not to pursue such amendments. In principle, we support his amendments in this group. I do not know about the procedure, Mr. Cran, but I should be grateful for your support and advice. If I do not get the reassurance for which I have asked the Minister—who is welcome to intervene at any point—to what extent could we engineer votes on amendments Nos. 273, 274, 276 and 277, as well as on amendment No. 2?

Malcolm Wicks: I do not want to strain this point, but the hon. Gentleman is calling for retrospection, and the issue of cost does arise. In view of the fact that he voted this morning to spend taxpayers' money, yet now seems to be talking about unclaimed assets, I must tell him that I can only give him an answer if I know what the question is.

Mr. Waterson: I thought that I had put it fairly simply. Let me try to put it in words of one syllable—or even less. [Interruption.] Sorry, I meant two syllables. I will seek the Committee's leave to withdraw the amendment if the Minister will give an undertaking not to exclude—and indeed, to consider as an option—the use of unclaimed assets to compensate the 60,000 people. I do not expect him to say that that would be the preferred solution, I merely ask him not to close his mind to it.

Malcolm Wicks: I cannot add greatly to what my hon. Friend and I have said already. We have given an undertaking that we will listen to and study all serious suggestions for a way forward.

Mr. Waterson: The problem with that is that it is inherent in the Minister's previous remarks that he does not regard that as a serious suggestion. If he

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accepts that it is, why can he not say, ''We'll take it away and look at it''? He could always come back and say, ''This is unmitigated rubbish—and we think that the Chancellor has got it wrong as well, because it does not work.'' In that case, I would happily withdraw the amendment. Apparently we are not going to get to that point, so I shall not seek leave to withdraw the amendment.

Question put, That the amendment be made:—

The Committee divided: Ayes 4, Noes 12.

Division No. 5]

Barker, Gregory Osborne, Mr. George
Rosindell, Mr. Andrew Waterson, Mr. Nigel

Baird, Vera Brennan, Kevin Cairns, David Dean, Mrs. Janet Holmes, Paul Khabra, Mr. Piara S.
MacDougall, Mr. John Moran, Margaret Pond, Mr. Chris Robertson, John Tynan, Mr. Bill Wicks, Malcolm

Question accordingly negatived.

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