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The ombudsman decided that the pensioners had been misled under both this Government and the previous Conservative Government, and maladministration had taken place. Like many hon. Members, I was over the moon at that decision. I cracked a bottle of John Smith’s with the Dexion pensioners—I am not a champagne man—and we celebrated. That did not last long. They thought that the ombudsman had ruled and that the Government would adhere to the ruling. As the hon. Member for Cannock Chase said, it is not for the ombudsman to decide what should actually happen,
especially in a scheme set up 40 years ago, but it is for her to have unrestricted access to the facts and to come to a decision as to whether our constituents had been let down by the system, Parliament and the Government of the day.
I have just met some of the campaigners, and I apologise for not being present for the whole debate. They still do not understand why the Government did not accept the ombudsman’s decision. They have come so far. It is as though a velvet revolution has taken place. The hon. Gentleman said that when he first looked at the issue, he thought that such things happen in a market system, but a groundswell of opinion, led by many Labour Members and others—I have pushed it hard myself since coming here—has convinced my Front-Bench colleagues, the Liberal Democrat Front Bench and Ministers. People who told me 18 months ago that they would never support a scheme under which the Government would compensate those who lost out, because it was not the Government’s fault, have now decided—rightly, in my opinion—that they do need help.
This is not about party politics, as the Minister has joined me in meeting delegations of widows. I shall say more about the widows in a moment, but the Secretary of State, only days after taking up his post, also met a delegation that I brought to him. I passionately believe that the Department for Work and Pensions wants to settle this matter once and for all. None of us has any doubt about that, so why on earth can it not be resolved today?
The Minister has made another move in our direction, and the Treasury seems to have come up with some extra money so that he can compensate the 8,000 people who are not covered by present schemes. We may not know where the money has come from, but we know that it is available. In the greater scheme of things, the sum involved is, frankly, peanuts. I am proud to be a member of the Health Select Committee, and we know that Government spending on the NHS now totals £100 billion. Where it goes is another question, but that is a huge amount. In contrast, we are talking about only £30 million a year to compensate the people who have lost out. That sum is expected to rise to around £100 million, and then fall again.
I share the concerns expressed by the hon. Member for Cannock Chase. I do not understand why my party’s Front-Bench spokesmen do not agree with the proposal. I have said that to them in private, and now I do so in public. We are talking about only 30 million quid, so we should make it available today. The lifeboat scheme that we have come up with has been prepared with the help of hon. Members of all parties. I hope that we will be able to vote on it later, because it will provide immediate help for the people who need it. They need that help today, not in six months or a year. Those who are in trouble cannot wait until the next Pension Bill, about which my hon. Friend the Member for The Wrekin (Mark Pritchard) spoke earlier, because many of them are dying.
Of course, some are dying of old age or illness, but most are not the sort that we would expect to die early. The fact is that stress-related problems are leading to many deaths among those who need help. I am sure that hon. Members of all parties are aware of the
disproportionate number of strokes and heart attacks suffered by the people who need our help. They are stressed out beyond belief, and that is because they are honourable people whose personal dignity means that they do not want to rely on means-tested benefits or charitable hand-outs. They worked all their lives and paid for their pensions, and they want to retire with dignity. Even so, many of them have taken up jobs that most hon. Members would refuse.
Mr. Bellingham: My hon. Friend is expressing the problem in a very moving way. A number of my constituents are having to work extremely hard at a time when they should be enjoying long and happy retirements. For example, I know one person who is doing night driving for a courier company. He is working himself into the ground because he has no proper pension, and there are many others in the same difficulty. Because those proud people do not want to rely on state benefits or move into council housing they are having to work as hard as they can to pull their lives together. This debate provides an opportunity for us to save their lives.
Mike Penning: All hon. Members involved in this campaign have heard about personal tragedies such as the one so eloquently described by my hon. Friend.
Mr. Bailey: Will the hon. Gentleman give way?
Mr. Frank Field: My hon. Friend the Member for West Bromwich, West (Mr. Bailey) should let the hon. Gentleman finish, as many others want to get in.
Mike Penning: The right hon. Member for Birkenhead is much more knowledgeable than I am, so I shall try to be as brief as possible.
I shall give the House an example of personal dignity. I want to talk about a man who used to be a middle manager, earning between £30,000 and £35,000 a year before his company became insolvent three years before he was due to retire. I shall not name him, and I hope that he will not mind me talking about him, but he is now picking up litter in a public park because he does not want to rely on means-tested benefits. Why on earth has this Parliament allowed such a thing to happen?
At the risk of sounding like an alcoholic, I shall mention beer again. I am very proud to have bought the last pint enjoyed by a gentleman called David Cheshire. He had worked for the Dexion group for many years and, just after the company announced that it was insolvent and that his pension would be lost, he was diagnosed with untreatable, terminal cancer. A week before he died, and even though he was in great pain, David Cheshire joined one of the many pensioner rallies that have been held at this House. A large group of campaigners came to the Marquis of Granby pub just behind the Home Office, and I bought a round of drinks. David Cheshire told me, “I never thought I’d be here having this pint, as I didn’t expect to live this long.” He died a week later, just after his wife Marlene told him that everything was okay and that the pension
money had come through. It was a lie, because she wanted David to go to his grave peaceful in his mind that she would be looked after.
I give way to the hon. Member for West Bromwich, West (Mr. Bailey).
Mr. Bailey: I thank the hon. Gentleman for giving way. I fully understand and sympathise with the emotions and intentions that he outlined, but there is something that puzzles me. Those emotions and intentions would be relevant if the people involved were getting no pension at all, yet we are really talking about the 10 per cent. difference between what the Government are promising and the proposal that he is making—
Mike Penning: I shall be generous to the hon. Gentleman and suggest that he take a quick look at the amount of money that some of these people need. The Minister has met Marlene Cheshire, as she was one of the group of widows to whom I referred earlier. At that time, she was getting £20 a week, but she should have been getting £200. If we cannot talk about something like that in the House of Commons, I am in the wrong place. I do not want to criticise the hon. Gentleman, but there are pensioners in the Lobby today and he can go and talk to them. They will tell him that they are not getting the money that is due to them. However, I should add that I took the lady about whom I have told the House to see the Minister, and the shortfall in her income has since been addressed.
The maths of the FAS scheme is pretty simple: £3 million to be shared between 125,000 people. They are not getting anything like enough, and we need to talk about how we can help them today. We should not wait for a summer review: natural justice and the needs of personal dignity mean that we should do the right thing by them this afternoon.
Mr. Frank Field: I shall speak for only two minutes, as I know that other hon. Members with constituency interests also want to contribute to the debate. However, I shall begin by congratulating my hon. Friend the Minister on his statement today and on the extension of the FAS scheme.
The House has it in its power to decide to extend the number of people covered by the scheme from the 8,000 announced by the Minister today to include all those who have saved yet been cheated of their pensions. Because the Minister is so talented I plead with my hon. Friends not to be beguiled by his abilities if he assures us that we should put things off to another day because there will be another inquiry.
My two minutes are to remind the House that in 2002, when the stories began to surface, I introduced a private Member’s Bill. The Government said, “We must not rush things; we must think about them and hold inquiries, so we must block your Bill”. The Bill provided that we should use unclaimed assets, so they began by saying, “We don’t know how much there is”. They continued with, “There is not much”, followed by, “Perhaps there is a bit more, but we don’t own it”. They then said, “Perhaps we will bring in a levy but we’ll put it into another scheme—a foundation”.
The message that I want to give to my hon. Friends is crucial, and was set out by my hon. Friend the Member for Cannock Chase (Dr. Wright) earlier: we have it in our power today to make a decision to put an end to the gross injustice that decent people, who have saved and done everything required of them, have been cheated of their inheritance. We should make that decision for justice’s sake, but we should also make it for the Government’s sake, because they still seem unable to realise that as long as that sore continues to fester, they will find it impossible to kick-start the savings habit in our community. Why should one save when one knows that all too many people who did precisely that at the Government’s behest now feel themselves cheated? Today, we can stop that cheating by supporting new clause 41 and I hope we shall do so.
3.30 pm
Mr. Weir: I, too, will be brief. I want to support new clause 25 tabled by the hon. Member for Cannock Chase (Dr. Wright).
I very much welcome what the Minister said about assistance schemes this afternoon, although it is a pity that we do not have the provisions before us so that we can see exactly what he is proposing. I know that the provisions of new clause 25 would deal with my concerns about a pension scheme in my constituency, but I am not sure whether the Minister’s proposals would cover that scheme.
The problems with schemes for solvent employers have poisoned the well of pension reform for far too long. They have been left out of the financial assistance scheme, although there is little to choose between what has happened to them and to insolvent employers. I cite the case of a scheme in the small burgh of Kirriemuir in my constituency. The company remains in being—indeed, it provides valuable jobs in the community—yet workers nearing retirement find that their pensions provide nothing like the sums they expected. The scheme is being wound up and the value of each pensioner’s pot is to be paid into a private pension scheme. An employee described for me the situation when they were told that the scheme was being wound up: they were told, in effect, “It’s your pension or your job”. It is difficult for people in small communities to come to terms with that.
I am told that the company would have gone into insolvency had the scheme not been wound up. The wind-up started in June 2004 and has not yet completely finished, so I want to be sure that people such as my constituents would be covered by the new aspects of the financial assistance scheme that the Minister announced today. I am sure that new clause 25 would cover their situation, but it is a great pity that we do not have the Minister’s proposals. What tests will he apply in relation to insolvency? What evidence will a company have to produce before it can be covered by the new scheme? In the case I described, the employees were told that the company would go into insolvency unless the scheme was wound up.
What made things worse for many employees in that case was that the pension scheme was put under a trustee company, which was also undertaking the winding-up process, and workers found it difficult to obtain information. They were told that the cost of
answering their questions about the wind-up of the scheme would be set against its assets, thus further reducing the amount available to pensioners. A circular from the trustee company states:
“Please remember that there is a cost to answering questions from members, meaning that the funds in the scheme will be further depleted.”
Not unnaturally, members wondered what to do. Should they pursue their interests, or would that mean that they were throwing away even more of their money? They were in an impossible situation.
If the scheme that the Minister has announced covers such people, it is very welcome indeed, but as has been said by other Members we need clarity today; this poisoned situation must not drag on. We cannot move on with pension reform, in particular the personal accounts that the Government propose, unless we deal with the problems now.
I intend to support the cross-party amendments on the lifeboat fund, but new clause 25, or a similar provision, must be passed in conjunction with them if we are to bring justice to all the pensioners who have suffered in this disaster.
Alan Simpson: I realise that for many Members the whole question of the administration of pension funds is extremely complex and detailed. I find it useful to refer back to the time when I started as a county councillor in Nottinghamshire. We had just appointed a chief executive—a person who, at that time, called himself Mick Lyons. He has been elevated somewhat since then. He invited us to identify problems in the administration of local government within the county. A number of us identified that schools were having serious problems in accessing the resources that they needed. He got a number of councillors and a number of the officers in different departments together and he asked people to explain what the problem was and what was causing the gap between the time when the schools sought to requisition pencils and paper and the time when anything arrived. The delay was often six weeks, two months or two and a half months. He listened patiently to the explanations from officials in different departments for about 20 to 25 minutes. Then suddenly he banged his hand on the table and said, “Right. I’ve got a plan.” Everyone shut up and listened to him. He said, “Send the bloody pencils and the paperwork can follow. I don’t care about the paperwork that follows. It’s not that it’s not important, but schools are about learning. It is about delivering the resources for learning. If schools haven’t got pencils and paper, we are undermining their primary function. So send the bloody pencils.”
If we were having that same debate among ourselves today, the central issue would be, “Send the bloody pensions.” It is not about the technicalities. The reason why I support new clause 41, which is a cross-party new clause, is that it says precisely that. We have a moral duty to pay people’s pensions today and to use the lifeboat fund to work out among ourselves how best to reclaim the resources that we have at our fingertips in order to do that. My only quibble in political terms is that I wish that new clause 41 had been tabled principally in the name of my right hon. Friend the Member for Birkenhead (Mr. Field), because, as been acknowledged, the origin of almost everything in that
new clause was rightly encapsulated in the private Member’s Bill that he presented to the House in 2002. It would be helpful for our own Members to be able to recognise and claim the integrity of that as a starting point. But I no longer care who claims the credit. What I am concerned about is that we are dealing with people who have never asked for a penny of a handout in their lives. They are people who have done what successive Governments have asked them to do: take money out of their weekly and monthly earnings and put it into pension funds in order to provide for their old age. We will not be able to convince successive generations who follow that that is a sensible step if their parents or grandparents say to them: “We were mugs. We put the money aside and people stole it.”
The great attraction of what is incorporated in new clause 41 is that it allows us to draw a simple line under a debate that will not go away if as a House we fail to take this decision today. New clause 41 brings everyone under the cover of the Pension Protection Fund. It does not say that there is going to be a huge delay. It says that we will pay out today and that we will work out how we will reclaim and repay the assets afterwards. It does not presume that there are billions of pounds to be found. However, the volume of unclaimed assets in this country is about £15 billion—£3 billion in unclaimed pension funds, £5 billion in terms of banks and building societies, £3 billion in national savings, and another £1 billion to £2 billion in residual assets in the existing schemes. So we would not be short of possible sources. Nor is it true to say that all that money would have to be found now. My understanding is that the £600 million that would need to be put aside works out, on the Government’s own figures, at about £20 million a year. Just to provide a reference point, we should understand that the error factor in the Department for Work and Pensions budget for the administration of benefits last year was not £20 million, but £700 million.
It is not beyond the Government’s and the House’s capacity to incorporate everyone affected into a scheme that would achieve what we promised at the end of the Maxwell fiasco. We promised people then that it would never happen again. Yet we now find ourselves in a position, five years after an event, in which many people who saved throughout their lives are living—and, in some cases, dying—in abject poverty. That is morally outrageous and morally indefensible.
I would like to end on a non-technical and non-political point with the line of a song by Tracy Chapman— [Interruption.] I will spare the House by not singing it! In that song, she said:
“A love declared for days to come is as good as none”.
The same could be said about a pension, so I hope that the House has the decency to do the morally right and the politically and financially accessible thing by drawing the line today and supporting new clause 41.
Mr. Bellingham: It is a pleasure to follow the hon. Member for Nottingham, South (Alan Simpson), who spoke very eloquently; and I support my hon. Friend the Member for Hemel Hempstead (Mike Penning), who spoke with great passion and huge knowledge.
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