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Mr. Hutton: I agree, in some respects, with the hon. Gentleman. It is important that we establish proper arrangements for confirming the security and confidence that people have in their pension investments and pension savings. We have taken action to try to strengthen those arrangements, and I am confident that we have succeeded.
I also welcome the hon. Gentleman's support for what I have said about the financial assistance scheme, which is the right way to see what further help, if any, we can provide for pensioners who are caught in that particularly difficult situation. I have listened to his expressions of concern and sympathy, which we all feel, but many people in the country will regard that as crocodile tears. [Interruption.] It is important to make that point because his party had plenty of opportunities to devise a similar compensation or assistance scheme, which it completely failed to do. It is all well and good for him to express his concern, but no financial assistance scheme was previously available. [Interruption.] He
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referred to when pension schemes started failing, but he clearly knows nothing about the issue, because it is utterly ridiculous to suggest that pension schemes suddenly started to collapse in 1997. We have implemented the necessary provisions and are examining further help.
The hon. Gentleman referred to unclaimed assets, which are obviously a matter for my right hon. Friend the Chancellor, and the £5 billion figure. Since 1997, there have been two significant impacts on pension funds: first, rising life expectancy has increased the costs of UK pension funds by some £250 billion; and, secondly, the fall in world stock markets at the end of the 1990s had a similar impact. [Interruption.] Conservative Members do not like it because they do not like the facts of the matter and are not prepared to listen.
Mr. Deputy Speaker: Order. This is a very serious matter that affects many thousands of people outside this House. I think that we should conduct our affairs seriously and, if we can, politely, this afternoon. Hon. Members must listen to the Secretary of State's answers.
Mr. Hutton: Recent research shows that the figure was never £5 billion. The sum was accompanied by tax cuts for business, and it may well be not much more than half of the widely quoted figure.
Finally, the hon. Gentleman argued that Governments must always accept the findings of the Parliamentary Commissioner, but that was certainly not the way in which the previous Tory Government used to respond. I simply draw his attention to his party's rejection of the Barlow Clowes report. If he wants to be credible, he must be consistent, but he has no consistency whatsoever.
Mr. Deputy Speaker: Order. Before I call the next speaker, the Front-Bench statement and response have taken almost half an hour, and I want as many hon. Members as possible to get in this afternoon. May we have brisk questions and, hopefully, brisk responses, too?
Mr. Terry Rooney (Bradford, North) (Lab): I congratulate my right hon. Friend on the clarity that he has brought to the situation. Will he confirm that there should always be a correlation between the evidence and the verdict? The FAS was set up to cover the current comprehensive spending period, and we need early action before the start of next year's period. Will he indicate the time scale of any review of the scope, extent and financing of the FAS?
Mr. Hutton: I am grateful to my hon. Friend for his support. My right hon. Friend the Prime Minister made it clear yesterday that we are looking to expedite the review of the FAS, and I hope that we can do so in the near future.
Mr. David Laws (Yeovil) (LD):
I am grateful to the Secretary of State for advance sight of his statement, but I fear that his response to the ombudsman's report will have created even greater anger and an even greater sense of betrayal among those people who have lost
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their pensions. As I understand it, the essence of his statement is that he believes that the Government have got more or less everything right and that the ombudsman has got more or less everything wrong. With respect, his Department has had a chance to put those points to the ombudsman over the past few months, and I remind him of her conclusion:
"I have found that maladministration was a significant contributory factor in the creation of financial loss . . . Nothing in the DWP's submissions persuades me otherwise."
As the hon. Member for Runnymede and Weybridge (Mr. Hammond) pointed out, paragraph 7.26 of the ombudsman's report states:
"Parliament has decided that it is my role—and not that of any party to a complaint—to determine what constitutes maladministration".
If the Government are going to trample over the ombudsman's report, what is the point in having a parliamentary ombudsman and giving her those responsibilities? I hope that Committees of this House, including the Public Administration Committee, will take up the way in which the DWP has dealt with the report.
Does the Secretary of State agree that those people who have lost their pensions will now feel doubly betrayed, not only because of what originally happened, but because of the way in which the Government have dealt with the report, which comprehensively condemns the Government and states that they provided information that was
Is the defence in the DWP response to the ombudsman's report—that many people will not have bothered to read those leaflets or that those who have read them will not have paid any attention to them—good enough? One wonders why the Government bother to distribute such leaflets, if people are not supposed to read them or pay attention to them. The Secretary of State's statement was peppered with the excuse that people should have read the small print in the leaflets, but that is the approach of a dodgy second-hand car dealer, which one would not expect from a Secretary of State charged with regulating such matters.
On cost, I share the concern expressed by the hon. Member for Runnymede and Weybridge about the £15 billion figure that the Prime Minister has been waving around, and I want a clear commitment that the Secretary of State will put an explanation in the Library. I also want a clear commitment that the Secretary of State is not going to fob off people with a token increase in the FAS, when a more substantive measure, such as extending the protections in the pension protection fund to people who are currently losing out in relation to the ombudsman's report and the existing FAS, is clearly needed. Will he tell us the cost of such action? Is that not precisely the type of expenditure that should fall to the contingency reserve? Given that this Government can find billions of pounds to fund an unjustified war in Iraq, surely they can find the money out of the reserve to fund such compensation.
As a Minister told the House of Commons in 2000:
"We are aware of the importance of protecting members' rights . . . If we cannot do that, they have no one else to look to".—[Official Report, 3 April 2000; Vol. 366, c. 765.]
What has changed? Why do Ministers now say that they are not responsible for protecting those rights and that members must look only to employers or trustees? Surely that approach not only betrays those people who have lost their pensions, but undermines the Government strategy to encourage millions more people to take up second pensions. The ombudsman, who obviously has a sense of irony, has entitled her report, "Trusting in the Pensions Promise". Does the Secretary of State understand that if he deals with the ombudsman's report in that way, people will not trust this Government's pensions policy?
Mr. Hutton: I can agree with some of the hon. Gentleman's points, but I am afraid that I am unable to agree with his fundamental analysis of our response to the parliamentary commissioner's report or to the arguments that I have advanced today. It is important—indeed, it is our responsibility—to place on the record why we disagree so strongly with the ombudsman's findings. In particular, in relation to the second of her findings of maladministration, there is very strong evidence that the Government acted on the basis of proper professional advice and followed that advice at every stage of the decision-making process. That is not just my view, but that of the Government Actuary's Department. In those circumstances, particularly given that we have not seen her actuarial advice, it is right and proper for me to put that on the record.
I can confirm to the hon. Gentleman, as I should have done to the hon. Member for Runnymede and Weybridge (Mr. Hammond), that we will set out the details of our costings when we produce our fuller response.
It is simply untrue to say that the Government are not seeking to provide financial assistance and support for people who are caught up in these circumstances, terrible as they are. We are looking to see what more we can do. As I said in response to the hon. Member for Runnymede and Weybridge, that is the right and proper way for us to proceed.
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