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Derek Wyatt (Sittingbourne and Sheppey) (Lab):
Nearly five years ago I came to the House to talk about Andrew Parr, who was one of the people in court
yesterday for ASW Sheerness. Hon. Members on both sides of the House have tried to have a debate about the matter. I am grateful for the statement. I think that we have accepted the moral argument, but we need to extend the money that matches the moral argument. That is what we are talking about now. Will the Secretary of State reflect on the unclaimed assets? When Ireland had the same problem, it proposed legislation to the Dail. The banks and building societies said that they had only £300 million, but I think £2 billion was found. We must have primary legislation. We will not find £300 million: I guess we will find between £5 billion and £8 billion of unclaimed assets. With the interest on that alone, we can deal with the issue. If there is to be an all-party group or some consensus, I would love to contribute creative ideas on how we can find that money.
Mr. Hutton: Obviously, we will look carefully at all those issues, and we have done so already. That was acknowledged yesterday by the judge in his ruling, but it is important that we all keep our feet on the ground. I know I have made that point, and I do not want to sound like a boring broken record, but I do not believe that there is a pot of gold that we can find to solve these problems. We should bear it in mind that these unclaimed assets belong to other people and the banks and building societies are trying to match the unclaimed assets with their rightful owners. We have to tread very carefully in going down that path. We are prepared, of course—we always have been—to look at those issues, but we need to maintain a common-sense view.
Mr. David Laws (Yeovil) (LD): I hope that the Secretary of State would acknowledge that refusing to accept the judgments of umpires is not a very attractive characteristic for sportsmen or for Ministers. Although I have never thought of him as a John McEnroe figure, he is showing a similar determination to ignore the successive decisions of the umpires in relation to pensions matters.
May I ask the Secretary of State about four issues in particular? First, I think that the position that he set out in the statement is that the Government, despite the strength of yesterday's ruling, have decided to appeal, even though they do not yet know the basis on which that appeal will be made. Is he really telling us that, despite the fact that the judge has decided that the Government acted unlawfully, and that the judge said in his ruling that no reasonable Secretary of State could rationally disagree with the view of the ombudsman on the leaflets that were issued before the Government came to power, he is proposing to appeal against that clear decision? That will distress the many people who thought that they had a clear judgment yesterday that the Government would accept.
Secondly, does the Secretary of State accept that, although he is correct to say that the judge indicated that one could not prove that every person who had lost a pension had read the forms that were referred to, we do not know the opposite? The risk is that, if we do not accept the general conclusions of the ombudsman, we will end up with each of the 100,000 individuals having to fight cases, which could take many years. Is that not totally unsatisfactory?
Thirdly, does the Secretary of State agree with the judge’s ruling that the figures that the Government
have given for the cost of compensation are not particularly accurate or helpful because they do not include the benefit and tax offsets? Is he willing to ask his colleagues in the Treasury to come up with a reliable estimate of the cost of extending the PPF level of benefits to those individuals? Does he agree that that is what they want, rather than more tinkering with the financial assistance scheme?
Fourthly, the Secretary of State said that his aim—I think he said “aim”—was to return to the House with his proposals before the conclusion of proceedings on the Pensions Bill. Does he accept that what Members want is for him to return with his proposals before Report stage of the Pensions Bill in this House, so that his hon. Friends and Opposition Members have a chance to decide whether the Government have come forward with an adequate response, and if this House is not happy with the Government’s decision it will be possible to propose amendments?
Finally, does the Secretary of State agree that delivering justice sometimes has a price, and is it not high time the Government were prepared to pay that price?
Mr. Hutton: I think that the hon. Gentleman prepared those comments before he had the opportunity to read my statement. I have made it clear today that we are carefully considering all aspects of the ruling in the High Court case. We have been given leave to appeal, but I have made it clear that we have not yet come to a decision on what the grounds for that appeal will be. That is in accordance with perfectly normal legal process in such cases, so the hon. Gentleman should not read anything into that. I am not in a position to give any further details today about what the grounds for the appeal might be, because they are still the subject of consultation between Ministers, and between the parties to the case.
On a more general level, we are considering every aspect of the ruling, but I get the strong sense from the hon. Gentleman that he wishes to pick and choose which aspects of the judgment he wants us to endorse, and which not. We are not in a position to do that.
I cannot promise the hon. Gentleman that I will be able to return to the House with proposals in the time scale that he mentioned. I will do my very best, but there are wider implications that I have to take into account, not least the current and ongoing litigation in relation to the European Court of Justice case.
We have been frank and open about costs. That was recognised by the judge in the Court yesterday—
Mr. Hutton: It certainly was. The judge made it clear that the issue was presentational, not substantive, and that it did not affect the substance of the matter in any way, shape or form.
Mr. Hutton: If the hon. Gentleman is shaking his head, he needs to go away and look at the judgment, where those points are made in terms, as I have outlined to the House today.
Mr. Terry Rooney (Bradford, North) (Lab): I thank my right hon. Friend for his statement, and particularly for his comments on legal costs; that has all been very helpful. However, will he confirm the following two points: that the insolvency directive came from the Commission in 1980, and also that the European Court of Justice judgment relates to the first financial assistance scheme and the £400 million, not the revised scheme?
Mr. Hutton: I am grateful to my hon. Friend for his initial comments, and I can confirm that he is right in respect of the ECJ case.
Mike Penning (Hemel Hempstead) (Con): I thank the Secretary of State for his statement, and for the Government’s considerations on the money, which will help in respect of the compensation and the court costs. However, in my constituency there are almost 700 Dexion workers—as the Secretary of State knows because he has met a delegation of them—and they will be deeply disappointed that there is to be more delay. They thought that after the Court ruling yesterday the matter would have been settled—that the judgment would be simple and the money would come forward. Will the Secretary of State expedite as fast as possible his thought processes and the conclusions he reaches, because those people are dying, and there are fewer of them now than there were a year ago? It is shameful that they have been left in their current position?
Mr. Hutton: I agree with a great deal of what the hon. Gentleman has said. I can assure him and the House that we will certainly not kick this issue into the long grass, and that I will come back to the House with proposals as soon as is practically possible.
Andrew Miller (Ellesmere Port and Neston) (Lab): I welcome my right hon. Friend’s statement and the approach that the Opposition spokesman has now adopted. It is very important that we take a long-term view that creates cross-party consensus on this matter. I was one of those who argued in the 1980s that the Lawson Budget, capping surpluses, would create long-term damage, and I was right. Such matters must be looked at in the round. It is great that the courts have dealt with some of the issues as they have, but Members have got to find a long-term solution that avoids our making the same kind of mistakes in the future as Nigel Lawson made in 1986.
Mr. Hutton: I am grateful to my hon. Friend for what he has said, and for his support. I just want to repeat to him and all other Members that we are doing our very best to find a sensible way forward in relation to these issues.
Sir George Young (North-West Hampshire) (Con): I welcome the tone of the Secretary of State’s statement, but does he agree that there is still a risk that this issue will escalate from a dispute between his Department and the occupational pensions authority into a dispute between Parliament and the Executive, because he has so far refused to accept the recommendations of the ombudsman and those of a Select Committee of this House? In order to avoid such a confrontation, will he give an undertaking that he will put whatever proposals he comes up with before the House for approval?
Mr. Hutton: It is certainly likely that if, and when, proposals are brought forward, there will be an opportunity for the House to vote on them. [Interruption.] The question of when that will happen has been asked from a sedentary position. I understand that amendments to the Pensions Bill dealing with the issues that we are discussing today have already been tabled, so I am confident that the House will have an opportunity to vote on them.
Mr. David Winnick (Walsall, North) (Lab): I recognise the difficulties and concerns that the Government must have in respect of how public money is spent, but can I explain to my right hon. Friend one case involving a constituent of mine—although I know that there must be many such cases? My constituent was told in 2001 by the Armstrong Group pension scheme that when he retired he would receive a pension of £10,380. He is due to retire next month, and he is now due to receive just £2,529 a year. I ask my right hon. Friend to imagine what he and his wife must be feeling about having to live in poverty, as opposed to receiving the more substantial amount that they had hoped for. Let us imagine that we, as Ministers and Members of Parliament, were faced with the sort of acute problem that my constituent and many others involved in the failed Armstrong Group pension scheme are facing? How would we feel? I hope that it will be possible for the Government to look very sympathetically on such cases.
Mr. Hutton: We shall certainly try to do so. I do not think that the issue is whether compensation or financial assistance should or should not be paid. We have already put in place a financial assistance scheme. Eventually, the issue that the House will have to consider is whether the scheme needs to be expanded in any way. That will be the focus of our proposals, when we bring them forward. However, the situation is as my hon. Friend has outlined: there are cases of genuine hardship and we have always tried to make sure that those in greatest need got the greatest help.
Mr. Andrew Tyrie (Chichester) (Con): Does the Secretary of State not agree that the delay that we are now experiencing is as painful as any failure to get matters right in the beginning? Does he not also agree that the signal he is sending—for example, to those waiting for the outcome of the ombudsman’s Equitable Life inquiry—will lead to people thinking that that might be overturned too, which would mean further inordinate delay, even after the many years that they have been waiting? Does the Secretary of State not realise that it is crucial that we now have closure on this issue, on an equitable basis and as fast as we can get it?
Mr. Hutton: I do, and that is what I said in my statement.
Dr. Tony Wright (Cannock Chase) (Lab):
I welcome very much what my right hon. Friend has said today, and the way in which he has said it. However, does he not agree that there can no longer be any question but that the ombudsman was right to say that the information that Governments of both parties had produced was misleading, and that that was maladministration? Can we clear that question out of the way now? Secondly,
my right hon. Friend said that there had sometimes been disagreements between Governments and the ombudsman in the past, and that is true. However, in every past case this House has insisted that there should be a satisfactory resolution of the difficulty. Is it not unfortunate that it has taken a judge to ensure that that will happen in this case?
Mr. Hutton: I thank my hon. Friend for what he said at the beginning of his question. As I have said, because we are still considering the grounds of appeal, I am simply not in a position today to give him the clarity that he seeks on his first point—nor will I be able to do that if anyone else asks me the same question through another route. The wider issue of compensation will now be the focus in our full and proper consideration of the implications of this judgment. It is clear, however, that this case has generated issues of great legal complexity and, yes, of constitutional significance. It is right and proper in those circumstances, and given that I have been able to share the terms of the judgment with Ministers only since yesterday morning, that they collectively take a proper view of where we should take this case in future.
Mr. John Redwood (Wokingham) (Con): When I was a Department of Trade and Industry Minister, I had an adverse finding of maladministration regarding Barlow Clowes regulation, and I had no hesitation in paying compensation. How much have this Government so far spent on advice, civil service time and legal fees, how much more are they going to spend on legal fees, and should not that money go to the people who are suffering?
Mr. Hutton: It might be important for the record to say that the right hon. Gentleman actually rejected the ombudsman’s findings in relation to Barlow Clowes.
Mr. Clive Betts (Sheffield, Attercliffe) (Lab): I welcome my right hon. Friend’s commitment to reconsidering the position of those who have lost pensions because the firm that they worked for has gone into liquidation, but will he also consider a related group of people? I and representatives of the Tinsley Bridge pension scheme recently met the Minister for Pensions Reform. That pension scheme was wound up to avoid forcing the firm into liquidation, but people lost their pensions as a result. The scheme therefore cannot join the Pension Protection Fund, but because the firm is not in liquidation as a result of the action taken by the pension trustees, those potential pensioners are not eligible for help from the financial assistance scheme. However, because of the improved conditions of that scheme, the pension trustees might be under a perverse legal obligation to put the firm into liquidation, thereby causing the loss of hundreds of jobs, in order to get that assistance. Will my right hon. Friend look at that issue when he considers those who have lost their pensions because their firm has gone into liquidation?
Mr. Hutton: I am grateful to my hon. Friend for raising that issue, which has been raised by a number of Members in all parts of the House. These are matters of real complexity and we are trying to find a sensible way forward. The Minister for Pensions Reform, whom my hon. Friend recently met, will write to him shortly in dealing with some of the issues that he has raised.
Mr. Mike Weir (Angus) (SNP): One problem that we all face is the huge gulf in the figures quoted. Campaigners say that the cost of reimbursement is £4 billion over 60 years, peaking at £100 million a year, but the Government say that the cost is £15 billion. Has the Secretary of State considered the possibility of an independent assessment of the true cost, so that Members can at least know what they are talking about in this regard? Does he not also agree with Joe Harris of the National Pensioners Convention, who said:
“The real issue arising from this case now is the need for a bigger basic state pension to be paid to all in retirement that is guaranteed and secure.”?
Is it not time to think about a citizen’s pension?
Mr. Hutton: No, it is certainly not time to look at a citizen’s pension, because the costs would be completely unsustainable. They would certainly be unsustainable if the hon. Gentleman got his way and imposed such a profligate policy on the poor innocent taxpayers of Scotland, so I would not recommend going down that route. On the figures quoted, I agree that it is important to have a common language in dealing with this issue, and we have tried to present our findings and our view of the cost of the financial assistance scheme in real and genuine terms, and on the same basis as the Government produce their financial accounts generally. It is therefore not true to say that there has been any sleight of hand. The judge makes clear the difference between the £3 billion and £15 billion figures. One figure is net present value and the other is cash—it is all cash—and that is how the Government produce their accounts. The difference is important as a matter of presentation, but it is
“not, in truth, a difference of substance”.
Julie Morgan (Cardiff, North) (Lab): I welcome my right hon. Friend’s statement, particularly his concluding remarks, and I hope that there will soon be an end to the misery that so many of our constituents have experienced. I am thinking in particular of the 800 Allied Steel and Wire workers from Cardiff who lost their jobs, some of whom also lost all their pension. I hope that they can sleep soundly in their beds, confident that the Government are going to come up with something good for them. Is my right hon. Friend aware, however, that there are people in my constituency who have worked for 30 years and paid in dutifully for 30 years, as the Government advised, but who have ended up with absolutely nothing under the present financial assistance scheme arrangements? Will he take them into account when he makes his statement to the House during the passage of the Pensions Bill?
Mr. Hutton: We are looking at all these issues in the context not only of yesterday’s High Court ruling but, most importantly, of last month’s ruling of the European Court of Justice.
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