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Instead of bringing the matter to a conclusion once and for all, in the interests of those individuals who have lost their pensions, the Government have
embarked on the tortuous process described by the hon. Lady. It has not satisfied the pensioners who have lost their pensions, it has not brought the matter to a conclusion, and it has led to a series of very critical reports on the Governmentfirst from the parliamentary ombudsman, then from the cross-party Public Administration Committee, then from the European Court of Justice and then from the judicial review group. Sadly, it is only through that process of criticism of the Government that we have managed to proceed to a settlement considerably better than that first envisaged in 2004-05.
I do not really know why we in the Opposition are so intent on helping the Government out of their position. Let me say in the most partisan possible terms that what the Government have succeeded in doing over the past three years almost constitutes a master class in how to extract the least possible credit from the largest possible number of concessions.
I spoke earlier about the implementation of the financial assistance scheme and the two substantial increases that we have seen. Another concession has been made todaya helpful concession, I think, although we do not yet understand all the parametersin new clause 25, which allows the inclusion of solvent schemes. But does any Member, including the Minister, seriously believe that we have seen all the concessions that we will see from the Government? As the hon. Member for Cardiff, North suggested, they may be forced to make more concessions through the legal process; moreover, those in another place will have to scrutinise the Bill, and given the cross-party nature of what we are debating today, I strongly suspect that they will insist on changes.
The Government have spoken of the unions aspiration in relation to the Pension Protection Fund. It is unclear whether they share that aspiration, but amendments tabled by the Leader of the Conservative party, the leader of the Liberal Democrats, the right hon. Member for Birkenhead (Mr. Field) and others contain many proposals that the Government say they are considering in any case. It seems pretty plain thateither through the Governments being forced to make more concessions, or as a result of policies that they have already put on recordwe will end up more or less where those amendments would take us.
Why, for goodness sake, do the Minister and the Government not do what now seems inevitable? Why do they not deliver for the pensionersmany, as we have heard, in a very vulnerable positionwho are waiting for the compensation that is due to them? Having initially been told by the Government that no compensation was possible, over the past three years they have witnessed the tortuous process of the Governments conceding more and more without bringing the matter to a conclusion. Labour Members and others in the House would do a service to the Government as well as to pensioners if they were to bring it to a conclusion today, and not allow it to be dragged out any longer.
The hon. Gentleman is right. The Government mean well; it is just a matter of how we achieve what we all want. A second Pensions Bill is likely to be presented next year, and it is possible that
there will be a review whose recommendations could be included in it. It might be even later than this summer before anything is done for those who face immediate hardship.
Mr. Laws: That is true. Many of us fear that people will have to wait even longer for a solution the shape of which looks obvious to most of us, and which we feel we might as well get on with delivering rather than putting those people through more pain. Moreover, many Members in all parts of the House fear that if we miss this opportunity, we may not have another opportunity to impose a sensible solution on the Government through the will of the House of Commons and, perhaps, that of another place.
What, after all, concerns the Government? As the Minister said, it is not the substance of the amendments, but the issue of finance. The Government have already moved enormously to deliver a substantial partnow the majorityof the compensation for which we are asking. They say that they want to consider the process of annuitisation and that of securing unclaimed assets. The Minister has acknowledged that the costing figures that he has given today for delivery of the extra element of compensation do not include offsets from tax revenue from means-tested benefits. What does it all come down to, provided that the Government can secure some unclaimed assets? It seems to come down to the determination of the Government, or perhaps the Chancellor of the Exchequer, not to concede what in public expenditure terms is a minuscule amount of money.
The Governments determination on principle not to do anything about that amount of money would be rather more convincing if they had not been dragged through the tortuous process of the past three years, providing first £400 million, then £2 billion and then £8 billion. They are now virtually where they will end up anyway. The Ministers arguments are very unconvincing. Given the closeness of his aspirations to those shared by almost every other Member, he would do a service to all of usbut mostly to the pensioners who are waiting for a settlementif he were to get on with delivering it. It is fairly obvious that we will end up with a package of a certain shape in one way or another; the question is whether that happens quickly or slowly.
The hon. Member for Runnymede and Weybridge commented on all the new clauses and amendments, and the hon. Member for Cardiff, North gave us an insight into her thinking on a couple of them. All of them improve the present arrangements. That includes new clause 38, which we have no intention of opposing, as it constitutes a further concession to raise the level of financial compensation.
The hon. Gentleman said that he welcomed new clause 25, tabled by the hon. Member for Cannock Chase (Dr. Wright), which allows the inclusion of solvent schemes. We welcome it as well. The hon. Gentleman said he preferred it to his own new clause 40, which was helpful. There was some uncertainty in his exchange with the Minister about precisely who would be excluded from the measure that he now envisages in place of new clause 25. I hope that light will be shed on that later in the debate. If there is
indeed an element of uncertainty, we too would be happy to leave it to the hon. Member for Cannock Chase to determine the extent of the exclusion, knowing that we have the backstop of another place and the possibility of further amendments if they are considered to be strictly necessary.
The critical aspects of new clause 38 relate to the other new clauses and amendments. We welcome new clause 24 and amendment (a) to new clause 38, tabled by the hon. Member for Cardiff, North, which improve the position by delivering the PPF level of benefits. We will support them if they are put to a vote, but, like the hon. Member for Runnymede and Weybridge, we hope that they will not be the focus of debate and of any vote that takes place. New clauses 40 to 47 also make important changes and additions to the package, which not only make it more financially robust but deliver the immediacy that many of the pensioners seek.
The hon. Member for Runnymede and Weybridge was kind enough to pay tribute to Ros Altmann and the other pension campaigners who have done so much to shift what appeared to be the immovable object of the Government over the last couple of years and to move the debate forward. The hon. Member for Cardiff, North and many other Labour Members will know of the anxieties that still exist among pensioner groups. Even if her amendments were accepted, substantive points would remain uncovered by them that are covered by the cross-party new clauses 40 to 47, as was explained by the hon. Member for Runnymede and Weybridge. The partial inflation-linking issue is dealt with by those new clauses, but not by new clauses 24 and amendment (a) to new clause 38.
There are other issues. There is the issue of ensuring that people receive their money, that the payment starts immediately at scheme pension age and that there is no further delay, with trustees able to pay the allowance from the scheme assets immediately. There is the issue of annuitisation, which is dealt with explicitly in the cross-party amendments. There is the issue of solvent employer schemes, which we hope will be dealt with by new clause 25 or a decent concession from the Government. There is also the issue of mitigation of the cost to the taxpayer. We understand that the Government are intent on taking action to deal with that anyway.
Although we welcome the amendments of the hon. Member for Cardiff, North, we hope that as she agreed earlier that this has been a tortuous process she will want us to find a solution today that deals with all the major concerns. She probably knows that the position of the pension campaigners is that new clauses 40 to 47 are to be preferred, as they deliver additional benefits compared with the measures that she has tabledand, indeed, our new clause 27. We hope that new clause 41 will be the focus of the debate. We will enthusiastically support it, and we hope that Members of all parties will also do so if, sadly, the debate ends in a Division.
The entire process of the past three years has been tortuous, but progressively the minority in this House, and certainly in the Labour party, has been converting the majority of Ministers, with some assistance from outside. There is not much further to go in that process. It is clear to me that through legal routes, steps in
another place and concessions from the Government we will reach the point proposed by the new clauses under debate, so let us get on and do it today, and not waste any more time.
Dr. Tony Wright: The Bill is in many respects a reckoning with the future of pensions, but it contains within it the reckoning with the past. We all wish that it did not do so because it would be nice simply to move on to the sunnier uplands of pensions policy to come. However, as several Members have said, the fact is that many people are not able to move on as they have lost their pension. They look to this House to do something about thatlegitimately because an Officer of this House, the ombudsman, has conducted an exhaustive inquiry to establish exactly what happened and whether there was any Government role.
I must confess that when I started to think about this matterbefore I had read the ombudsman report, and before the Public Administration Committee started taking evidence on it and talking to some of the people involvedI took a different view from that which I now hold. I thought, Well, the worlds an uncertain place and risky things can happen; pensions are fragile objects and we have to live with such events. However, the more I examined the subject the less I could sustain that position. After 1994after Maxwellwe believed that we had put in place a framework of protection that would prevent such things from happening again. The ombudsman was able to show in detail that in terms of what had been said about that framework of protectionthe descriptions of the amount of safety that there was in the schemesthere had been maladministration. That is not simply a proposition of mine; it has now been demonstrated. It has been upheld in the High Court, so we know it to be the case. Therefore, we have moved on from that argument.
That is not to say that the Governmentany Governmentare entirely liable for what has happened. That is not true. There is some liability, but the major point is that the only body or person who can organise a remedy and sort out this situation are the Government. The Government have been trying to do so, and we must welcome the fact that we have made huge progress. This is a bit like building a house. Originally, when we began with the financial assistance scheme, the Government erected one wall and said, Theres some shelter and we said, But one wall isnt good enough. So they added another wall and said, There we are; thats better shelter and it was better, but we again said, Its not good enough. After that, in the Budget they added two more walls. We have the surrounding structure of a house now. That is vastly better, but we then said, But we still havent got the roof on. The Government have responded by saying, No, we havent got the roof on, but we know a man who can find the wherewithal to put the roof on. The Opposition have said in return, We can do better than that: we have got a man who can loan us the money to find the man who will put the roof on. Frankly, I do not care where the roof comes from. Most Members accept that we need the roof onthat we need to reach Pension Protection Fund levels. As has been said, that is a responsibility of the Houseof all Members.
Let us consider the history of this matter. It started with the last Government. Some of the most offending
literature in maladministration terms occurred under the last Government. However, the point about ombudsman investigations and all that flows from them is that responsibility is handed back to the House. When the ombudsman system was put in place exactly 40 years ago, the House sensibly decided not to give the ombudsman the ability to impose remedies. She would have the ability to investigate without any hindrance and operate completely independently and then to report to the House. She can suggest lines of remedy, but not impose them. The responsibility for that comes back to Members. We must decide what is the right thing to do. That is what we are faced with in this context. We did not think that the Government had done enough when they produced one wall, or two walls, or now when they have produced four walls. We still want to talk about putting the roof on.
I know that the Opposition and the Government are terrified of public spending, but there are times when we have to say, We have an obligation to spend the money to do the right thingwe would like not to spend it, but we have an obligation to do the right thing. I say to both the Government and the official Opposition that I wish that they were both saying that, because the official Opposition are going to some lengths not to say thatbut instead to say that they are not prepared to sign up to propositions that commit them to moving to PPF levels. It would be easier for the House if we could test the proposition of whether we wanted to do that, and then worry about the mechanisms for doing it. The incentive to find mechanisms that work would be greater if we had committed ourselves to the objective. That might be the effect of new clause 41 and associated measures, and that is why I shall support them. Even funny money is better than no money at all, and I am prepared to accept it on that basisalthough the Government are entitled to say to the Opposition that it is funny money and that they must answer for that.
On the new clause 25 issuethe solvent schemes issuewe know that there is an anomaly. The compensation available applies only in cases where there has been an insolvency event. That has left high and dry about 8,000 people who have been in solvent employer schemes. We all recognise that they are in exactly the same position in terms of the loss of their pension as everybody else and that there are no grounds on which we could possibly want to exclude them. New clause 25 brings their schemeswe seem to agree on the numbersinto the package that is being developed. The Minister is entitled to say that the amendments under discussion were devised over the weekend in a great hurry, but I can assure him that this one was not. A good deal of time and authority has been invested in it in this House. It comes with some good authority behind it. When the Minister says to me that it is technically deficient, my response is that I do not think that it is, because it covers exactly the same kind of schemes that are eligible under section 286 of the Pensions Act 2004. It does not in effect say, Lets open the door to any scheme that might want to fold to get some protection. It is explicitly contained within those parameters.
I would be delighted to withdraw the new clause. All I require the Minister to say is that he accepts the spirit
of the new clause and, if he thinks that it is technically deficient, he will remedy that down the road. I do not want to be left still not knowing which schemes will be covered and which will not, because that would be profoundly unsatisfactory.
James Purnell: I am happy to give my hon. Friend that assurance. We are looking at the same number of peoplesome 8,000. I did not intend to criticise his drafting, but I have been advised that the new clause would let in an extra category. The intention is to include all schemes that were wound up unfunded, preventing an employer insolvency. New clause 25 would include schemes in which debt and winding up could not have forced an employer insolvency and, therefore, the employer was healthy enough to fund more of their pension liabilities. I am happy to discuss the issue with my hon. Friend, but I hope that I have given him the guarantee that he wants. We are trying to achieve the same aims and we are happy to return to the issue in the other place if necessary.
Dr. Wright: I hope that I will be satisfied with that answer. The Minister will have to come up with a form of words, because at present new clause 38the package that he has offered us todaydoes not have any provision for those solvent schemes. I have to be sure that the assurance he has given me will cover all the schemes that we think it will cover, under all the parameters that I have described.
Mr. Philip Hammond: I have listened carefully to what the Minister said and I still have a concern. He appears to be acknowledging that there is a group of people without pensions who will remain without pensions or assistance because of something that their employer has or has not done. The essential fairness in this is that it is not the problem of the pensioner or the would-be pensioner if his employer has behaved badly or correctly. We are seeking a solution that deals with the problem from the pensioners perspective. It needs to be clear whether some people who see themselves as victims of this problem will still not be covered by what the Minister is offering.
Dr. Wright: That is the point on which I need to reflect to see whether we can pin down what has been said. I take the point that we will have another opportunity to consider the issue, but I am determined to ensure that we cover all the schemes that should be covered. I do not accept, on technical grounds, the Ministers point that we would be opening the door. It would be more straightforward if the Minister accepted the new clause and, if it turned out that it needed more work, that could be done. That would be the easiest way to proceed.
Mr. Hammond: It is not really my place to say this, but I remind the hon. Gentleman that if one seeks a Division on a specific new clause in a group, one normally indicates as much to the Chair before ending ones speech.
I do not wish to do things wrongly, but I shall reflect on the exchange that I have just had with
the Minister. That seems a reasonable proposition, but I shall apprise the House of the fruits of my deliberations at the earliest possible moment. I had better stop now.
Mike Penning: As a very humble, new Back Bencher, may I say what a pleasure it is to follow the hon. Member for Cannock Chase (Dr. Wright)? The work that Members from all parties have done on this issue since I came here on 5 May 2005 has impressed me enormously. I personally praise the work of the right hon. Member for Birkenhead (Mr. Field) throughout the campaign.
The issue was brought to my attention when I was a parliamentary candidate in Hemel Hempstead some six years ago. Just after I was selected, the former Dexion workers committee came to see me. They asked me to read their fileit was about 6 in deepand give them my opinion on whether they had been treated fairly and with dignity, whether natural justice had been done and whether trust in Parliament and pension schemes could ever be restored.
I read every word, and when I went back to the committee I was tested. They did not trust me: they did not trust any politician. I do not think that they do today. They wanted to know whether I had read and understood the file, and whether I agreed with them that no matter who was in power, or who had made the mistakes, they had been treated appallingly. At the time, there were just over 700 of them, mostly men, but some ladies, who had paid into a scheme, at one stage, compulsorily. Following legislation, membership of the scheme was voluntary, but nobody left it because it was very good. Some people had paid in for 35 years and more.
The campaigners had huge dignity, but they had already been around the country taking their clothes off in public. They were middle-aged men and women who had worked all their lives, done the decent thing and did not want to scrounge off the state. They did not want means-tested benefits. They wanted to work until their time for retirement came and to pay in a fair amount of money to be kept safe for them, and for their loved ones when their time came to pass on.
I told the campaigners that they desperately needed to put their case before the parliamentary ombudsmanthe place for justice in the mother of all Parliaments. I fought hardand it is hard for a parliamentary candidateto get the ombudsman to listen to their case. I went to Front-Bench colleagues and asked them to read the file, but they said that they had seen the same thing happen to other schemes and that it should go to the ombudsman.
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