Draft Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2008

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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.
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.
Question put and agreed to.
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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