Jenny
Willott: Will the Minister clarify something? I believe
that the net figure was net of tax of the benefits that would otherwise
be paid and net of the assets, as the hon. Member for Eastbourne said
earlier, that would be transferred in—it is the grand total, as
it were. It would be helpful if the Minister could provide that
figure.
Mr.
O'Brien: I will check that with my noble Friend and will
come back to the hon. Lady and other Members with the figure.
The hon.
Member for Eastbourne also asked me for the net cost figure. I will see
if I can get that to him—in so far as we are able adequately to
calculate it at the moment—and also the cost of these particular
regulations, if he wants that figure. He mentioned a series of other
statistics that he would like, and I will do my best to get him an
up-to-date
list. The
hon. Gentleman asked me about the court decision. As far as I am
concerned that decision was primarily appealed. We wanted it back in
the court on the basis that we were unhappy about the provisions in
relation
to the ombudsman and their ability to overrule the view of a Minister.
That had not previously been understood to be law, and the Government
took the view that we would consider a further appeal. When I looked at
the wording from the Court of Appeal I was content that we did not have
to appeal further, because the provisions did not require a Minister to
comply with the decision of an ombudsman, merely to take account of
their decision. That is a different position. I would have been
concerned if the ombudsman were able to overrule the Minister’s
decision, given that the Minister is a representative of the Government
and an elected person. Therefore, I took the view that we did not need
to appeal and I withdrew the appeal. However, I
emphasise—because the Government were paying the costs of those
who were appealing—that it was only on the ombudsman issue that
there was any concern on our part. Why would we have been concerned
about the other matters? The Government had effectively won. We may
have got some criticism from various places, but on the law the
Government had by and large won, on the provisions relating to the FAS.
So, that was not the issue. It was the ombudsman issue that we had
sought to appeal, and we are sufficiently content to not pursue that
further. Moving
on to the questions that the hon. Gentleman asked about deemed
buy-back, as I said earlier the outcomes in relation to deemed buy-back
are uncertain. That is because the amount reinstated depends on a
number of factors, among them the full contracted-out service of the
member, including their service in any other scheme. Therefore, it is
not possible to say whether people will be better or worse off by
removing deemed buy-back. However, they now have the certainty of
90 per cent. of their accrued pension, subject to the cap.
We are not able to give the hon. Gentleman the straight answer to his
question because of those uncertainties, but there will at least be the
guarantee of the 90 per
cent. The
hon. Gentleman asked about the PPF and how it would operate. Obviously
we want to use the PPF expertise as much as possible, and I am happy to
discuss with him how we might further seek to use the PPF. However,
there are important differences between the FAS and the PPF. The FAS,
for example, is taxpayer funded and deals with pension schemes that
have already wound up and have been wound up for some time, and some
that are winding up and have been for some time. In many cases the FAS
will seek to top up annuities that have already been bought. I want to
use the PPF expertise and to work through a range of details with the
PPF. I will meet shortly with people from the PPF to talk about some of
the issues, and I will have further discussions with the hon. Gentleman
and the hon. Member for Cardiff, Central about any further steps that
we will take in relation to the
PPF. I
think that I have dealt with the hon. Gentleman’s next two
questions about examples of actuarial reductions. I will see if I can
get him some of those examples. I have also talked about the tax
treatment of the FAS. He also asked if I could provide some details
about mental health provisions and I think that I have mostly dealt
with that issue.
Finally, the
hon. Gentleman asked about the list of solvent companies. I am just a
little cautious about that issue. I am happy to give it to him
privately and I am happy, in a sense, to publish the names of those
companies
that have already been accepted. However, we know that there are some
employers who have not yet paid their full contributions and the
trustees are seeking to get the full contributions from the employers.
Because an announcement was made with a list of businesses who were
accepted, I would not want the employees—the pensioners and
prospective pensioners—of other companies to think that they
might not in the future be accepted or are somehow excluded, because
their trustees were still operating and were seeking funds from the
employer. The hon. Lady
asked me why there was a delay beyond July in relation to some of the
regulations. Regarding the end of July, we hope to get these
regulations through, but some of them may not be in, because of this
need to get some of the money off the employers. So the trustees are
seeking some of the funds that the employers owe to them. These are
still solvent employers, remember. Some of the employers are being a
bit slow to pay, or have not paid at all, so we want to ensure that
those employers pay up, because otherwise the funding just comes from
the taxpayer and I would rather that the system did not work like
that.
Jenny
Willott: I may be pre-empting the point that the Minister
was about to make, but could he clarify the issue of the date to which
payments will be backdated? If people are going to receive their
pension, it will be backdated to the date that their scheme entered the
FAS, whereas for people who are getting ill-health payments, according
to these regulations, the earliest date possible is when these
regulations come into effect, even if the ill health started
beforehand.
Mr.
O'Brien: I think that I follow that. The start date will
be the start date of the operation of the PPF; that is as far back as
we would normally go.
Let me think
this through. What we are seeking to do is to ensure that people are
put in a position where they will receive some back-dated payments to
the point at which they would have received payments if the PPF had
been in operation. So we are back-dating some of those payments.
However, what we will not do is make indefinite back-dated payments, so
that those people are able to claim for problems that arose well before
1997.
Jenny
Willott: I understand that that is the case clearly for
pensioners and there is no argument about that. The issue that I would
like clarification on is different. My understanding of the regulations
is that, for those claiming payment on grounds of ill health, the
earliest date that it could be backdated to is when the regulations
come into force. If they were not able to work—even someone with
medical evidence to prove that they were suffering from ill health and
unable to work in, say, 2004—are they unable to claim those four
years when, if the regulations had come into force earlier, they would
have been
eligible?
Mr.
O'Brien: I think that I am following what the hon. Lady is
saying. Is she talking primarily about the ill-health
provisions?
Jenny
Willott: Solely about the ill
health.
Mr.
O'Brien: In that case, under the draft ill-health
payments, payments will be payable from the latest of the dates that
the scheme manager was first notified that the member is in ill health
and is likely to remain so until the normal retirement age. The date
the regulations came into force and the date at which the member is
within five years of their NRA under the current regulations are
considerations. The draft regulations before us do not provide for ill
health-related payments to be made for periods prior to the coming into
force of the
regulations.
Jenny
Willott: The question is
why.
Mr.
O'Brien: Well, establishing what might be an appropriate
past period for such payments is complex. Complexity is created when
requiring evidence for a past period, and legislation did not exist at
the time to
inform the member to retain evidence for future periods. The draft
regulations before us, therefore, will ensure that those closest to
their normal retirement age will have an opportunity to receive early
reduced ill-health payments quickly. We are continuing to discuss the
ill-health provisions, as I said. I am not sure that I am entirely
following some of the hon. Lady’s questions—we should
speak afterwards. It may be my fault, but I thought that I had dealt
with that point. If we have a discussion afterwards, I will see if I
can go through those provisions with
her. Question
put and agreed to.
Resolved, That
the Committee has considered the draft Financial Assistance Scheme
(Miscellaneous Amendments) Regulations
2008. Committee
rose at nineteen minutes to Six
o’clock.
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