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The Minister for Pensions Reform (Mr. Stephen Timms): The Pension Protection Fund opened its doors on 6 April. It compensates members of eligible defined benefit pension schemes if the employer becomes insolvent and the scheme is underfunded so that it cannot pay benefits at least equal to PPF levels of compensation. I discussed the operation of the fund with the new trustee panel last week, and with the chairman of Nestlé UK earlier this month.
Mike Penning: I thank the Minister for that answer. I am sure that the Pension Protection Fund will help people who pay into pensions in future if they have their pensions stolen, as has happened to former Dexion workers in my constituency. The PPF will not help them today, however, and I hope that the financial assistance scheme will be rolled out by Christmas. When the Secretary of State meets my constituents in the next couple of weeks, will he give them a firm date as to when they are likely to get the compensation that they deserve? Will he not rule out getting funding from sources other than the pension fund that already exists?
The hon. Gentleman is right to draw attention to the benefits of the PPF in protecting schemes when employers hit problems in future. As he rightly says, however, that is not the case with the Dexion scheme, the wind-up of which commenced before April 2005. The financial assistance scheme is therefore likely to be helpful. I know that Dexion
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is being considered for entry to FAS at the moment, and I think that the FAS unit has asked for some further information from the Dexion trustees in order to finalise the decision. I know that the hon. Gentleman is meeting my right hon. Friend the Secretary of State shortly, and my right hon. Friend will certainly want to bring him up to date with the latest developments.
Mr. Stewart Jackson: The Minister will know that the PPF will this year receive some £300 million through a levy. Is he concerned that the independent consultants Hymans Robertson have estimated that as much as £1.5 billion will be needed next year? Do the Government agree with that estimate, and what impact would that have in future years on the risk-based levy?
Mr. Timms: I have seen that figure and several other large-sounding figures being quoted. The PPF is consulting at the moment on the basis for calculating the levy, and will publish its proposals at the end of November. The initial estimate was based on circumstances in December 2003, and changes since then, for example, on interest rates, will no doubt have some impact. The PPF understands extremely well the need to keep the burden manageable for the funds that are paying the levy. I caution the hon. Gentleman against placing too much credence on some of the figures quoted, such as that to which he refers. The fund will publish the outcome of its consultation exercise at the end of next month.
Dr. Julian Lewis (New Forest, East) (Con): The Minister will recall his previous meeting on the question of APW Electronics based in Eastleigh. At least four of my constituents and many more in Eastleigh and Southampton lost 80 per cent. of their pensions when their trustees were forced by a foreign-based arm of the firm to accept a deal that cost them that on pain of the company otherwise going into liquidation. Throughout the country, only about half a dozen companies are in that situation, and they are not covered by the protection scheme that has been set up or the financial assistance scheme. Can he do something to restore the stolen pensions of my constituents and the constituents of others?
Mr. Timms: I do recall the discussion that we had. As I said to the hon. Gentleman on that occasion, it is our view that, where there is still a solvent employer, as there is in that case, that employer has a duty to ensure that the obligations that it has entered into are honoured. Therefore, he needs to look to the employer to put things right.
Mr. Pat McFadden (Wolverhampton, South-East)
(Lab): The PPF and the financial assistance scheme are welcome new measures of protection, but does the Minister agree that there is still a need for advice about how the schemes will operate? For example, in my constituency, many former employees of UPF Thompson Chassis do not know what pension they will be entitled to. Some do not know whether they will be entitled to a pension at all. What steps is the Department taking to communicate with workers in that position to tell them of their rights under the new schemes?
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Mr. Timms: My hon. Friend will find good information, for example, on the Department's website, and the PPF has its own website. There are pages on our website about the financial assistance scheme. If there is any further information I can provide to him or to his constituents, I will be happy to do so.
Mr. Nigel Dodds (Belfast, North) (DUP): May I draw the Minister's attention to the case of the workers at Richardsons IFI plant in north Belfast, for whom the PPF has come too late, although it is a welcome initiative? That company was 49 per cent. owned by ICI, and 51 per cent. owned by the Irish Government. As well as providing assistance from other sources, can the Minister, in his discussions with the Irish Government, put some pressure on them at least to fulfil their morale obligations to the workers of that company and to provide them with a decent pension for the future?
Mr. Timms: The best thing I can do in response to that question is to check out the position on that scheme. When I have done that, I will drop the hon. Gentleman a line and let him know how I intend to proceed.
Mr. Nigel Waterson (Eastbourne) (Con): With estimates of up to £1.5 billion for next year's burden of the PPF levy, does the Minister agree with his right hon. Friend the Member for Birkenhead (Mr. Field), who said:
Mr. Timms: I caution the hon. Gentleman to wait until we know the outcome of the work that the PPF is doing on both the total quantum of the levy and the way in which it will be calculated for individual firms. It is broadly accepted that it is in the interests of schemes and of their members that there be support from the PPF. The principle was well established and well accepted across the House. I hope that, when he sees the final conclusion of the work that the PPF is doing, he will agree that it is a good deal for schemes and their members.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt):
Between the introduction of the new scheme in March 2003 and September 2005, of those cases cleared, 25 per cent. were cleared in less than six weeks; 22 per cent. were cleared between six and 13 weeks; and another 22 per cent. were cleared between 13 and 26 weeks. Regrettably and completely unacceptably, 14 per cent. took more than a year, bringing the overall average out at 26 weeks.
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Miss McIntosh: There we have it. The Government have been in power for eight years and it is still taking at least six weeks to process a child support application. It is totally unacceptable. The assessments are often completely inaccurate. I do not know whether the Minister is aware how much distress that is causing, which is illustrated by the number of people coming into our surgeries. What guarantee will he give that, by June next year, 100 per cent. will be processed within a month?
Mr. Plaskitt: I am perfectly aware of the distress that is caused to constituents when cases do not go well, because they come to my surgery, too. That is exactly the reason why, as my right hon. Friend the Secretary of State said in answer to an earlier question, the new chief executive of the agency is undertaking a root and branch review. We will be in a position to report to the House shortly on the outcome of that. Of course one of the objectives is to get the agency operating better, processing cases more quickly and delivering a better quality of service to our constituents.
Mr. Mark Lancaster (North-East Milton Keynes) (Con): Does the Minister share my concern at the case of my constituent Mrs. Dzialoszynski, who was told that because the information that she provided could not be entered on the computer system, the decision to enter it as a manual payment was made not by the agency, but by the IT consultants who provided the software?
Mr. Plaskitt: Some cases are handled manually, which is not ideal, as it takes a lot longer than automatic processing. We need an improvement in the IT system; that is exactly what we are discussing at the moment with the supplier. That, too, will form part of the recovery process for the agency, which we hope to be able to bring to the House in the not too distant future.
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