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There are others, such as the Cheshires. Marlene Cheshire, the widow of David Cheshire, contributed to the Dexion scheme for 30 years. He died of cancer in 2005. He could have taken early retirement, instead of retiring at the normal age of 62. His widow will receive just £56.98 a week from the FAS, but he would have expected her to receive an estimated £113, including indexing. Mr. Andrew Parr, a member of the ASW Sheerness scheme, will receive 40 per cent. of his expected pension from the FAS. At the age of 62, he should have been getting £336.96 a weekhe will now be getting just £134 a week, and he is still working despite having a heart problem.
It is not just a matter of statistics, but of real people facing real problems. When will Ministers understand that those people and their families need help now? The niceties and technicalities of sorting out underutilised remaining assets in the funds, non-purchase of annuities and unclaimed assets will take time; we accept that. However, if the Government had listened to us, that could all have been happening during the past two or three years. It is precisely because the process will take time, and because those families need help now, that along with other parties and some Labour Members, we are proposing not just a lifeboat fund but that initial funding should be provided through Treasury loans. Those would be repaid in due course and are based on the way in which the Maxwell victims were treated.
Rob Marris: What these people have gone through is awful; we are all aware of that. In the figures that the hon. Gentleman has given, he says that individuals will receive 40 per cent. rather than 80 or 90 per cent. Is he committing his party to pay the full 100 per cent. of expected pensions, and if so, what would that cost the Government?
Mr. Waterson: We are committed to find ways, as set out in the amendments, to ensure that people receive compensation at PPF levels, without incurring further taxpayers money, and we think that the Government should be doing that as well. That is why we have suggested that we all talk to each other on a consensual basis to try to reach a solution.
I mentioned the question of loans, the Treasury and the parallel with the Maxwell situation. The then Conservative Government got their priorities right. In due course, they sorted out pensions reform through what became the Pensions Act 1995, but their priority in the short term was to get help to those who needed it because they were facing destitution.
With the exception of the Minister, we have all dealt with these issues of improvement and changes to the FAS before, over and over again, and the Government have been dragged kicking and screaming each time to make further concessions. On past form, Ministers will relent and agree with us sooner or later. Why not sooner?
Mr. Frank Field (Birkenhead) (Lab): Mr. Deputy Speaker, may I ask you a rhetorical question? Are you, like me, visited by the odd nightmare? That nightmare is one in which one knows the right course of action, but is paralysed to take it. All of a sudden, one wakes up and finds oneself back in the real world. Listening to what was said from our Front Bench today, the comparison with being paralysed and unable to take the right action seemed to be there. The nightmare, however, is visited not on us, but on those of our constituents who have paid into an occupational pension for most, if not all, of their working lives, and have been robbed of that to some degreesometimes to a great degree.
Let me remind the House of the background to this matter. In 2002, I introduced a Bill that had two parts. One was to establish an insurance scheme, and one was to deal with what we then thought were small numbers of people who could not be insured because their
schemes had already gone bankrupt, or would do so before the insurance scheme came into existence. I proposed that taxpayers should not have to foot a penny of the bill of making good the pensions of those in the second group, and that we should draw upon the unclaimed assets of banks and building societies.
What was the Treasurys response to that? It told us that, although these assets were unclaimed, it did not mean that they did not have owners. The Treasury was not minded to claim such assets, which sometimes were unclaimed for 100 years or more, to foot the pension bill of those who had so cruelly lost out. We now know that the Treasury says not only that the assets will be claimed by the Government, even though they are unclaimed and may have owners, but that pensioners will not have the first claim on them, as first mentioned in this House. Instead, the assets will be used for youth projects. It is not that anyone in the House is against financing youth projects, but we thinkas Aneurin Bevan saidthat politics is about priorities, and when it comes to priorities, pensioners should be at the top of the list.
The Minister for Pensions Reform is one of our most adroit performers at the Dispatch Box, but at the end of his contribution, I was left wondering what we were offering pensioners. All I knew was that we were not offering them the deal that we should be. Tonight, we should take the opportunity to put an end to the nightmare into which they have been plunged for many a long year. Those on the Treasury Bench know that we have by-elections coming up. Lots of Members on this side of the House, who agree with us in spirit, will not want to be with us in the Lobby because they know that some Opposition Members would exploit that in by-election campaigns.
I hope that Members of the House of Lords would not misread a vote as a lack of determination on this side of the House. When our deliberations return to them, I hope that they maintain their position, and keep sending the measure back to us until we reach the final tape. At that point, the Government will have to give way, if they have not already done so, and we will get justice, at long last, for those pensioners who have been so cruelly treated by the circumstances regarding their pensions funds. All of a sudden, the light of day will then be upon the Government, and they will realise that the funds can be found from somewhere. We might as well do that tonight rather than later on in the Session. We owe that to our constituents, and I hope that we shall vote accordingly tonight.
Danny Alexander: I was struck by theprobably uncharacteristic partisan tone struck by the Minister in his opening remarks. There has been a lot of talk about building a pensions consensus during the debates on pensions that many of us have been involved in. During this debate, the House has to think about the cross-party interest of many hon. Members in ensuring that the 125,000 victims of the collapsed pensions, to which the right hon. Member for Birkenhead (Mr. Field) referred, have a fair and just settlement. We have an opportunity tonight to ensure that they do, and to ensure that the paralysis, quite rightly described by the right hon. Gentleman, stops and the nightmare for those 125,000 people is brought to an end. Let us ensure that those people are not presented with continuing injustice and a continuing struggle.
Let us not forget that what has brought the matter most vividly to the Houses attention for a period of years was vigorous campaigning. We saw it again today, as many of the victims of collapsed occupational pensions were present in Parliament square, to lobby Members of this House about the justness and fairness of their cause. Let us not say to those people, You have to keep struggling on. Let us back the amendments and make sure that those people have the fair and just settlement that they seek, and which they deserve. That settlement is embodied by the amendments, including amendment No. 24, which I shall come to shortly.
The background to the matter is well known. As the right hon. Gentleman said, many people have been affected during the period between the suggestion of such legislation and its coming into law. The Governments role in the whole sorry scheme has been criticised by several independent bodies, such as the European Court of Justice, the High Court, the pensions ombudsman and the Select Committee on Public Accounts. If a footballer had been shown four red cards in succession, the police would be called to get him off the pitch. The Government need to respond with more alacrity to those findings than they have displayed so far.
Jenny Willott (Cardiff, Central) (LD): Does my hon. Friend share my surprise that, although the Government finally appear to have accepted some guilt for maladministration after the attempts by the four different bodies that he mentioned, they are still not putting right the financial injustice?
Danny Alexander: I am grateful to my hon. Friend for her intervention and pay tribute to her work in campaigning for her many constituents who have been affected by the problems. I share her surprise that, although the Minister appeared to offer a further small concession, albeit with few numbers attached, he was not willing to go the whole hog. I share the view of the hon. Member for Eastbourne (Mr. Waterson) that the Government will eventually be forced to do that. They have not done so yet, and that is gravely disappointing.
Although I acknowledge that the Government have made progress in expanding the FAS from its original limited basis to a slightly less limited basisand, potentially, an even less limited basisthey seem to have been dragged kicking and screaming to that point. Any resultant positive feeling among the victims of the scandal has been dissipated by the Governments niggardly approach to making progress. There is genuine anger about that. I went to the demonstration in Parliament square today and saw many people wearing T-shirts, which claimed that the Chancellor of the Exchequer stole my pension. That shows the extent to which the issue arouses genuine and justifiable anger.
The anger derives from the big difference between the PPF and the FAS. The Minister used the phrase core pension. He has now invented a new phraseexpected core pension. Others have drawn attention to the fact that the term core pension is misleading and appears to have been defined uniquely for the purposes of the debate to make it sound as if more is being offered to the people who are affected. All hon. Members should bear that in mind when they cast their votes.
Sir John Butterfill (Bournemouth, West) (Con): The hon. Gentleman will also realise that the suggestion that a loan somehow reflects what happened in the Maxwell case is factually inaccurate. There was initially a Government loan, but nearly all the assets were subsequently recovered or squeezed out of the banks that had lent against them, so there was not a huge debt to be repaid at the end of the day.
Danny Alexander: I am grateful to the hon. Gentleman for that intervention. The amendments point is to say, Lets get on with it. Lets get the Government loan through the system to achieve the PPF level, not the more niggardly proposal. We can then ascertain the resources that can be released through the Young review process and other processes, and calculate how much of that money the Government can get back.
The Minister is dithering about the financial outcome for the affected pensioners while saying, We must wait and see. There must be an end to the dithering. The House and the pensioners who suffered the injustice have waited a long time and consistently demanded PPF level benefits.
My party made it clear in our election manifesto that we believe that benefits should be paid at the PPF level. I previously referred to the figure that House of Lords written answers provided for the cost of that. At net present value, the cost would be £640 million in the first 10 years. That is £25 million a year and, as the Minister said, there is a curb. Perhaps I should not be, but I am prepared to take on trust the word of his colleague in the House of Lords for the correctness of those figures.
The difference between the PPF and the FAS is great. The 80 per cent. that is currently being offered amounts to only 60 per cent. when we consider expected pension, according to the pensions action group. That is because, unlike the PPF, the benefits paid out under the FAS have no index inflation linking. Other benefits, such as widows benefits, are more limited under the FAS than they are under the PPF. Other dependants benefits are non-existent. The FAS pays out at the age of 65, irrespective of the retirement age of the individuals scheme.
Even if the Minister goes up to 90 per cent. of his expected core pension, it will amount to perhaps only 65 per cent. of actual expected pensionthat is, two thirds of the sum to which people would have been entitled had their schemes not collapsed. Hon. Members should bear that in mind when they cast their votes this evening.
The core pension concept, which was invented for the purposes of the scheme, varies a great deal according to individual circumstances. I met one pensioner today who told me that his personal circumstances meant that his core pension amounted to 32 per cent. of his expected pension. There is a wide difference, which means that the Governments talk of 80 or 90 per cent. is simply not in keeping with many affected pensioners individual circumstances.
Jenny Willott: Does my hon. Friend share my concern that my constituents who are affected are mainly people who worked in the former steelworks and were not on especially high incomes when they were employed? Their expected pension was not generous in the first place and getting two thirds of that can mean a small amount on which to live in retirement. That has implications for pensioner poverty.
Danny Alexander: I agree with my hon. Friend. Many of the 125,000 people whom we are discussing this evening are in the position that she describes. We are not considering pensioners who are expectingas Cabinet Ministers might expectlarge sums in retirement, but people who built up small amounts of pension. We should record our indebtedness to the pensions action group, and especially to Dr. Ros Altmann, for the way in which they assiduously brought such matters, including my hon. Friends point, to the Houses attention.
The Minister referred to the Young review. It is an interesting document, which rewards further detailed studyI am sure that all hon. Members have studied it. It includes much that should give aid and comfort to those who support the amendments. For example, it emphasises the importance of stopping the annuitisation of the assets that are left over in the collapsed pension schemes. That is precisely the outcome that amendment No. 22 would achieve. The Minister wants to wait until November, when I presume that we will have the next phase of the report. Who knows how much longer Government action will then take? It could be attached to another pensions Bill. The process could take some time. If, during that time, many of the assets are annuitised, the benefits that could accrue to the FAS will be lost. Even if the Minister rejects all the other amendmentsI wish that he would notamendment No. 22 is in his interests as much as those of everyone else who pursues the matter.
I fail to understand the basis of the Governments opposition to the proposals. Although the amount of money required to increase benefits to PPF level £640 million at net present valueis significant, it is not a great deal of money in overall annual public expenditure terms. I cannot understand why Ministers are so unwilling to do the right thing by a group of pensioners who have been treated so unjustly.
Mr. Gordon Prentice: The hon. Gentleman will agree that the Young review tells us that, of the £1.7 billion in assets that have been identified, £1.3 billion has not yet been committed to annuities. That is why we must act this evening.
Danny Alexander: The hon. Gentleman is right. Action this day must govern us. It is not enough to delay a little more and simply take the Governments word. The Select Committee gave cautious advice about the extent to which we should listen to the Government. We need to act now because, tomorrow, the amount that has been annuitised may be greater. The next day, it may be greater still. We need to act to ensure that that does not happen and that the maximum amount of resources is available to benefit those who have suffered so long because of the collapse of their occupational pension.
The Young review makes the pointperhaps it is a rebuttal to the Association of British Insurers, among othersthat there are unclaimed assets potentially available in life insurance policies. However, the main point the review makes is that there is a need to create the lifeboat now. People need the guarantee of the benefits at PPF level. The Minister can have a review to ascertain the level of resources, but let us get the lifeboat going to give people outside the certainty that they require.
Amendment No. 24 is simple and makes it clear that PPF-level benefits should be delivered by regulation as a matter of right. The other amendments make it clear that the process of allocating resources should be gone through, but the uncertainty of the level of resources that might be delivered by the various programmes should not stop us voting for these amendments. There may be a small cost attachedthe hon. Member for Wolverhampton, South-West (Rob Marris) has referred to it repeatedly, from a sedentary position and otherwisebut answers to parliamentary questions show that it is not great. Let us float that lifeboat now to give hope to all concerned.
The Minister presented his statement as an attempt to offer progress but it amounted to little more than more dithering and delay. Victims of this scandal cannot wait and, with the exception of those to whom the hon. Member for Eastbourne referred who have sadly passed away, they will not go away. They will knock at our door every day they can. That is another reason why the House should act today. The amendments establish the lifeboat and start the search for the resources to fund it. That is the right order in which to do it. Let us not spend weeks, months or years reviewing the assets that might be available before we decide to float the lifeboat and give the guarantee of the appropriate level of benefits. Let us vote for the amendments tonight.
The Prime Minister has made clear his wish to present an ethical dimension to his Governments domestic policy. What better way to start than to ensure that the amendments are passed tonight and that the victims of collapsed occupational pensions in the FAS get the levels of benefits that they desire? The Prime Minister has also made it clear that he wishes to restore the role of Parliament. What better way could there be for the House to show that if the Government are not willing to provide that ethical dimension to their domestic policies, then it is? I hope that the House will support the amendments.
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