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Session 2007 - 08
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Public Bill Committee Debates

Draft Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007

The Committee consisted of the following Members:

Chairman: Mr. Eric Illsley
Alexander, Danny (Inverness, Nairn, Badenoch and Strathspey) (LD)
Cunningham, Mr. Jim (Coventry, South) (Lab)
David, Mr. Wayne (Caerphilly) (Lab)
Dobson, Frank (Holborn and St. Pancras) (Lab)
Hill, Keith (Streatham) (Lab)
Hollobone, Mr. Philip (Kettering) (Con)
Jackson, Mr. Stewart (Peterborough) (Con)
Laing, Mrs. Eleanor (Epping Forest) (Con)
Lait, Mrs. Jacqui (Beckenham) (Con)
McIsaac, Shona (Cleethorpes) (Lab)
Mole, Chris (Ipswich) (Lab)
Morden, Jessica (Newport, East) (Lab)
O'Brien, Mr. Mike (Minister for Pensions Reform)
Purchase, Mr. Ken (Wolverhampton, North-East) (Lab/Co-op)
Rowen, Paul (Rochdale) (LD)
Sharma, Mr. Virendra (Ealing, Southall) (Lab)
Waterson, Mr. Nigel (Eastbourne) (Con)
Gosia McBride, Adrian Jenner, Committee Clerk s
† attended the Committee

Fourth Standing Committee on Delegated Legislation

Tuesday 11 December 2007

[Mr. Eric Illsley in the Chair]

Draft Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007

10.30 am
The Minister for Pensions Reform (Mr. Mike O'Brien): I beg to move,
That the Committee has considered the draft Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007.
I welcome you to the Chair, Mr. Illsley. I am sure that under your chairmanship we shall do a swift and thorough job. You will no doubt ensure that the Committee members remain in good order—[ Interruption. ] particularly those of my hon. Friends who sound as if they might behave otherwise.
As hon. Members are aware, the financial assistance scheme offers help to people who lost out on their final salary defined benefit occupational pensions because their scheme was underfunded when it wound up or when their employer ceased to operate or became insolvent. The scheme is operated from York by the FAS operational unit. The regulations aim to give more money to affected pensioners and to ensure that the number of pensioners who can benefit increases. I hope that our consideration of the regulations will help to enable such pensioners to be paid.
The operational unit has worked closely with trustees of pension schemes and has dealt with nearly 400 applications from those schemes. As of today, 3,540 members of 278 schemes are being paid—up from 675 members last year. Some 130,000 are people involved in the various schemes, many of whom are still working and are not yet pensioners. Others are pensioners, but are receiving sums that mean that they do not require funding from FAS, and yet others are in the process of applying to the scheme. A further 1,223 members have been assessed and are likely to become eligible for payment once they reach 65. In total, payments amounting to more than £11 million have now been made.
Let me take this opportunity to update hon. Members on the Young review. Andrew Young, the Government Actuary, has been examining the assets belonging to the pension schemes and is in the process of completing his report. His review will identify options for generating extra value from the residual assets in the affected pension schemes. I saw a draft of the report for the first time over the weekend. I emphasise that it was at that stage a draft, because a number of media reports have emerged in recent days that are somewhat suspect. I have not seen the final report.
We are determined to provide extra help for the affected pensioners, which is why we pledged to match the extra funds that the Young review identifies, particularly if assets can be bulked up in annuities, with the goal of moving towards providing 90 per cent. of expected core pension.
Once we receive the final report, we will be able to consider the options in conjunction with colleagues in the Treasury, and we will make an announcement when we have done that. The funds that are provided will be on top of the £8 billion in cash terms or £1.9 billion in net present value terms to which we have already committed through the regulations we are considering today. The regulations will ensure that we can provide increased assistance to more members of more schemes.
Before the Government introduced the Pension Protection Fund and FAS in the Pensions Act 2004, no help was available for those who had lost out on their pension because their scheme had wound up underfunded with an insolvent employer. For decades, people just lost out. It was the Government who introduced the PPF and FAS, and it is the Government who have pledged to do more.
The financial assistance scheme, as originally constituted, helped only those within three years of their normal retirement age on 14 May 2004. Last December, we extended that help to members of qualifying pension schemes who were within 15 years of their scheme normal retirement age on 14 May 2004. Under that extension, assistance was tapered depending on the member’s distance from normal retirement age. For example, those between seven and 15 years from normal retirement age would be considered for a lower top-up of 65 per cent. of their expected core pension if they were between seven and 11 years from normal retirement age, or 50 per cent. if they were between 11 and 15 years.
The original FAS would have helped about 15,000 people over its lifetime, giving assistance to people within three years of retirement, and was payable at the age of 65. Last year’s extension to FAS increased the number of those helped to about 40,000 and increased total funding for FAS to £2 billion, up from £400 million in cash terms. This year’s Budget saw a significant extension to the funding of FAS. An additional £6 billion will be made available to help affected members. The extra cash will be used to do away with the tapers on assistance so that all qualifying members of schemes will be eligible for a top-up to 80 per cent. of their expected core pension, subject to a cap, at the age of 65. It will also raise the level of the cap on assistance from £12,000 to £26,000 a year. It will get rid of the de minimis rule, which meant that FAS awards of less than £520 a year were not paid.
Following discussions with affected schemes, we are also amending FAS qualification rules so that more schemes and more members will qualify. Those changes mark our intention to help members of pension schemes when trustees believe that it would be in the best interests of scheme members to reach what is called a compromise agreement with the employer. Under such an agreement, the trustee would accept a lower amount than the full debt owed by the employer on the wind-up of their scheme, in order not to tip the employer into insolvency. To date, our information suggests that up to 13,500 members may qualify for assistance.
As a result of the changes, we now expect about 130,000 people who have lost their pensions as a result of their employer undergoing a qualifying insolvency event to receive at least 80 per cent. of their core expected pension, subject to the raised cap, from either FAS or their pension scheme.
When will people benefit is the big question. Some 2,500 pension scheme members already benefit from the changes made under the Pensions Act 2007. The Act included changes to increase the level at which we pay initial payments from 60 per cent. to 80 per cent. and removed the de minimis rule applied to such payments. Those provisions have been in force since July. The changes mean that we have already been able to get help to the majority of current FAS recipients without further delay.
The regulations round off a package of changes by, among other things, implementing the increased cap for initial and annual payments and removing the de minimis rule and the tapers currently applied to annual payments. The operational unit has identified individuals who will benefit from those changes. Assessment and payment can begin as soon as the regulations come into force and members should start to receive the money they are owed—including backdated arrears—in the next few weeks, and we hope that many of them will receive the payments before Christmas.
I hope those payments will make a difference for people who have often despaired of seeing their pensions, which were promised to them by their employers and for which they have saved. The operational unit is working with trustees to ensure that it obtains the necessary information from schemes that benefit from changes to the rules relating to pension scheme eligibility.
Mr. Ken Purchase (Wolverhampton, North-East) (Lab/Co-op): A worrying aspect of this whole matter is that trustees’ advisers and accountants, who bear a great responsibility for the failure of many schemes, are still administering the affairs of the trustees in the same way. Will the Minister tell us whether he has had any indication of the likely continuing costs for trustees’ advisers, and where those costs will be met from? Specifically, will he assure us that they will not be taken from Government funds?
Mr. O'Brien: Pension schemes will need to use their advisers to put together the required information to get payments from FAS. There is a requirement that FAS should receive information from trustees in a manageable form. There have been problems with some advisers and some trustees who have not given information in a form that is reasonably digestible for FAS, so the regulations will prescribe a particular form in which the information should be provided. Many of the schemes will have advisers, accountants, lawyers and others who will need to put together the information in a reasonable way. I am anxious to be reasonable. FAS should be able to process information in any reasonable form. I do not want the regulations to be too prescriptive, but given that there have been one or two problems, it is right that we should prescribe in the regulations that information be provided to FAS in a certain form.
I have indicated to officials that they should be reasonable. When information is provided in a way that they can digest, deal with and process they should accept it, even if it is not precisely in a particular format. The objective of the regulations is to ease the process of getting payments to the pensioners, not to set up a bureaucratic process for the sake of it.
My hon. Friend the Member for Wolverhampton, North-East rightly says that trustees will meet the costs of advisers, lawyers, accountants and others. Some trustees operate a big scheme and that is fine, but some of the trust schemes are quite small, so the costs of employing such people could be considerable. We must be reasonable and sensible about our approach. The way in which we are making the regulations and in which we intend to implement them will be reasonable and will satisfy some of the requirements that my hon. Friend identifies. He is right to point out that the scheme is operated by the taxpayer, and that there is a difference, for example, between the PPF and FAS. The PPF is a type of insurance scheme. The pension schemes pay into a pot; they pay a premium in the form of a levy to the PPF, and if the scheme is wound up, payments are made from that accumulated pot. That is not something the taxpayer has created, nor is the taxpayer bailing out pension schemes that have got into difficulties. The system is run, by and large, by the pension schemes themselves, although under the PPF, which was set up in statute.
The financial assistance scheme is different: it is a taxpayer scheme, which attempts to assist a group of pensioners who have had difficulties with their pension schemes as a result of their employers winding up, or getting into difficulties, before the PPF was in operation. The taxpayer should not be unduly burdened, but we must get the balance right between helping the pensioners—we are anxious to do that and have already provided substantial sums to do so—and ensuring that the taxpayer is treated fairly. My hon. Friend is right to draw that issue to our attention.
As hon. Members will recall, the Young review’s interim report, published in July, indicated that additional value might be found in FAS assets by pooling them into a FAS fund, or through a bulkier annuity purchase. Members on both sides of the House agreed on the importance of preserving assets in relevant schemes, and we are determined to maintain the value of those assets until we have considered the review’s recommendations. We have already introduced regulations to protect the funds in affected schemes by preventing trustees from purchasing annuities in the majority of cases. The regulations include a further protective measure to deter trustees who are allowed to purchase annuities from buying annuities with enhanced annual increases.
The regulations introduce a number of amendments linked to the calculation of FAS payments, recovery of overpayments and the provision of information. I have already spoken about the provision of information, but we also want to ensure that we clarify the way in which the other procedures operate.
This has been a frustrating time for many pension members who have been affected by losses. They await the final outcome of the Young review, and the Government’s response to it. We will look further at the matter; I understand that we may get the final report within a few days and we will need some time to consider it over the next few weeks. I hope to give an indication of our response to it in the not too distant future.
Today, I hope that we can approve the draft regulations and enable more money to be paid to the pensioners. The measures will help to ensure that we increase the number of pensioners who will get help, and that those pensioners who already get help get more help.
10.49 am
Mr. Nigel Waterson (Eastbourne) (Con): It is a great pleasure to serve under your chairmanship today, Mr. Illsley, on a very distinguished Committee that includes such luminaries as the right hon. Member for Holborn and St. Pancras. I am pleased to see in his place the hon. Member for Wolverhampton, North-East, who is perhaps paying us a farewell visit before his transferral to the other place.
Mr. Purchase: Good morning, my lord.
Mr. Waterson: Indeed. I am therefore pleased to serve on such a high-powered Committee.
I welcome the regulations—as far as they go, and those are the key words. They mark another step in the Government’s snail-like progress towards the inevitable: the organisation of PPF-level compensation for these 130,000 pensions victims. The Minister was right to say that there is a difference between FAS and the PPF, and indeed there is. One major difference for potential claimants is the vast disparity between the payments due under the two schemes. The regulations go some way towards improving the lot of some claimants, and I will come to the detail in a moment. However, it is worth remembering that PPF has some inflation linking, pays from scheme pension age, allows tax-free lump sums and takes account of ill-health and early-retirement benefits and benefits to dependent children, all of which sharply distinguish it from FAS. As I said, however, some progress has been made in the regulations, and we welcome that, so I shall not be inviting my hon. Friends to divide the Committee. None the less, we need to debate the detail.
The Minister referred in passing to the fact that there was no comparable protection before 1997, but on one view, such protection was not previously needed, because, without exception, all the problems that we are debating have occurred since 1997. As I have conceded in the past, they are not all the Government’s fault, although they are in some measure. That is why we have had to look at these issues since 1997 and why, at the time, we supported the principle of setting up the PPF. As we know, the 130,000 people whom we are talking about cannot increase in number, because their sin—if that is the right word—was simply to fall outside the PPF start date, and those are the arrangements that we have in place going forward.
I turn now to one or two of the details, although the Minister took us through most of them.
Mr. O'Brien: On a point of information, the hon. Gentleman said that the number cannot get larger, but we are also looking at the solvent schemes, which would bring in about another 20,000 people, so we could be looking at about 150,000 people altogether. Therefore, the numbers could indeed increase.
Mr. Waterson: I am grateful to the Minister for that. He is right to note that, but leaving that point aside, the 130,000 cannot, conceptually, get any bigger; indeed, the number is, sadly, dwindling as people await their compensation.
It is important to remember that the regulations are about providing what the Minister described as 80 per cent. core assistance, subject to the cap, of course. That is a very different matter from providing 80 per cent. of people’s expected pensions. It is unfortunate that Ministers—particularly the former Chancellor, now the Prime Minister—have tended to confuse the issue in past statements. They have said that people will get 80 per cent. of their pensions or that the Government hope to pay people 90 per cent. of their pensions following the Young review, to which I shall return in a minute. Nothing of the sort will happen. The concept of the core pension is a novelty in pensions law and was dreamed up specifically to make FAS look reasonably generous.
The Minister has taken us through the issues of tapered assistance, the de minimis rule, the changes to the scheme qualifying rule dates and the changes to the position under which a compromise agreement was in place and enforcing the debt against the employer would have forced them into insolvency. I think that I am right in saying that those all emanate from the Budget statement in March. Under the earlier version, only those qualifying members within three years of normal retirement age would benefit, and the regulations extend that.
I understood the Minister to say that now, instead of the original 15,000 people under FAS—rising to 40,000, in principle—everyone of the 140,000 people could and should in due course benefit from the amended regulations. I am sure that he will correct me if I have misunderstood him. The notes say that it is expected that all the estimated 125,000 people—it seems that the number is now 130,000—will receive at least 80 per cent. of that poor expected pension, which is good news up to a point.
Mr. O'Brien: Just to clarify, it is right that, in principle, all the various people covered could receive up to 80 per cent., but some will already get that much in any event, because of the nature of the payments that they receive from their scheme. Those people may receive little or nothing, because their scheme already pays out at about that level. In principle, however, if their scheme were to pay an amount less than the required amount, they could top it up from FAS.
Mr. Waterson: I am grateful to the Minister, whose point I take entirely. I was merely making a broader point that, in principle, all those people will be entitled to make some claim on FAS.
It would be interesting to know the average payment to the 3,500 people now in receipt of FAS payments. The Minister may need to write to me about that. It has been a slow process getting that number up to even vaguely respectable levels. If we take that figure, plus the 1,200 or so people who have been or who are being assessed, how many does that leave out of the 130,000 people who are already eligible to make claims on FAS but whose cases have not yet been processed?
What is the average length of time between starting to assess a claim and getting money to the claimant? The Minister said that total payments to date are £11 million, which is a slight increase on the previous figures, but how does that compare with the figure for the FAS set-up and running costs to date? At one time, the costs were running ahead of the amount being paid to claimants.
One crucial element—the elephant in the room—is the long-awaited final report from Andrew Young. The Minister says that he saw a draft of it over the weekend, but press coverage at the weekend and yesterday suggested that the draft has not exactly found favour with his colleagues at the Treasury. I assume that it is being passed around Whitehall in an attempt to water down its conclusions. The Minister was not able to say, but I shall press him on when he expects to see a final version. How soon after that will it be published?
There have been some lurid press reports in the past few days about what has happened to the Young report. A report in The Sunday Telegraph said that the Chancellor and the Prime Minister
“are understood to be blocking the rescue package—even though Peter Hain, the Work and Pensions Secretary, is keen to go ahead with it and says his department has the cash to fund it.”
It goes on to say that, according to “Whitehall insiders”, whom I assume are somewhere in the bowels of the Treasury, the Secretary of State and the Minister are
“‘very frustrated’ that Downing Street and the Treasury are blocking the rescue package.”
It says that the Minister
“in particular, is said to be ‘mortified’”.
I looked up “mortified” in the “Oxford English Dictionary” this morning. It used to mean “rendered dead”, but I do not think the Minister meant that. Over the years, it has also come to mean “to feel humiliated”, and if the press stories are remotely accurate, he has every right to feel humiliated. They clearly emanate from some part of the Government, if not from the Minister himself.
The Sunday Telegraph report continues:
“Young is understood to have finished his report and submitted it to the department, where it is being ‘tweaked’ by civil servants.”
We await the results of the tweaking process, but I suspect part of those will, as I have said, water down the conclusions of Andrew Young and disappoint a large number of pensioners again.
It is important that we have clear ideas about when the report will appear. The Minister is not only sadly mortified by all this, but only the other day, the Secretary of State told one of his constituents—a former member of the Dexion scheme—that the Department for Work and Pensions review has found that there is certainly sufficient money to offer all the victims at least as much as is paid by the PPF
“at little or no extra cost to the taxpayer”.
Certainly, in his speech to the Labour party conference, the Secretary of State said that he was
“determined to see justice done”.
Indeed, the other day, the Minister for Pensions Reform was good enough to visit the all-night vigil outside Downing street of some of the pensions victims. I do not know what he actually said to them, but I hope that he gave them some grounds for comfort—no wonder he is mortified if the rug has, in effect, been pulled from under him by the Treasury.
Finally, on this issue, the Financial Times states that Andrew Young says in the report that the cash that he has identified
“would allow the 125,000 workers to enjoy the same rights as people who are protected by the more generous Pension Protection Fund”.
The Financial Times goes on to state that
“Hain and O'Brien are particularly angry because the report points out the government may escape”—
perhaps that is not the right way to approach it—
“with paying £350m over 60 years”,
to add to the amount already committed to the scheme. It says that the Secretary of State has privately conceded that the Government have acted “appallingly”. That is not just a view that the Secretary of State now apparently holds; we have had a long line of condemnation on this issue from Select Committees and the ombudsman, who was basically ignored by the Government. Of course the matter has now reached the High Court and, indeed, the European Court of Justice. In the most damning indictment of all, the ombudsman described the Government’s performance as
“inaccurate, incomplete, unclear and inconsistent”
It is not possible to add to or improve on that finding.
It is worth going back to Andrew Young’s interim report, which was produced a few months ago, where it is clear that he had already identified £1.3 billion worth of assets as yet uncommitted at that stage. He concluded that, in total,
“we estimate that there is approximately £1.7 billion of uncommitted assets in schemes eligible for FAS assistance”.
I hope that, in his final report, that figure can only increase.
One thing on which I will commend the Government is the buying of bulk annuities, as mentioned by the Minister. For a long time, we have said that that is the right way to go, and people, such as Ros Altmann, have been saying for even longer that it is simply wrong for the limited assets remaining in those funds to be eaten up by buying bulk annuities on a large scale. Although late in the day, that was the right thing to do, and I commend the Government for that.
Currently, we still have a broad consensus outside the Government that we need to find ways of increasing compensation levels up to those under the PPF. The Public Administration Committee’s report says:
“We support the general principle that FAS benefits should be aligned to those in the PPF”.
Of course, the Minister will have seen the cross-party early-day motion that was tabled only yesterday and that, in effect, calls on the Prime Minister to allow the Minister and his colleagues in the DWP to implement a lifeboat as quickly as possible for those pensioners who have lost their pensions.
There is a great deal of consensus—a vogue word in pension circles these days—on these points. That consensus now seems to envelop and embrace the Secretary of State and, indeed, the Minister in respect of what amounts to doing the decent thing. It seems that the only people who are standing in the way are the Prime Minister and those in the Treasury, which is, admittedly, not exactly a small problem to deal with. However, as I have said, there is an inevitability about this process. At each stage of FAS’s life, the Government have been dragged kicking and screaming to each improvement that is made available. This is the latest such improvement—that is why we do not oppose it—but it will still not tackle the underlying problem. In fact, a lot of people will still receive barely half of what they would have expected from their pensions under FAS.
I am sorry to hear that the squabbling within the Government machine is holding up the publication of the Young report and preventing them from saying to those people, “Now, for once, you can have one Christmas that is not clouded by uncertainty and worry about your financial future.” That is a great lost opportunity, and I hope that the Minister will prevail in his battles with the Treasury. Perhaps we can get this back on track, so that an announcement can be made before the House rises for Christmas.
11.6 am
Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): It is a pleasure to serve under your chairmanship once again, Mr. Illsley. The Minister and the hon. Member for Eastbourne have rightly described the history of this problem. As the Minister has said, the regulations will certainly improve the benefits paid to those who qualify as members of FAS—something that must be welcomed.
I particularly welcome the Minister’s point about the regulations providing a deterrent against those who, as he described, could play the system with regard to how annuities are bought. The new rules will enable FAS to control that more effectively. Along with the measures on the purchasing of annuities that were initially debated on Report during the consideration of the Pensions Act 2007 and approved after some to-ing and fro-ing with the other place, the new rules will also ensure greater protection for the assets within the qualifying schemes, pending the results of the Young review.
However, the Minister said that many of those who qualify for help under FAS—potentially, more than 130,000—have experienced what he described as a frustrating time, which is an understatement. Certainly, when the proposals that are embodied in the regulations were put forward in the Budget, the response from the pensions action group and many of those who are still waiting for their benefits to be paid was very deep frustration that the Government had not chosen by that stage to go the full way, answer their legitimate demands and ensure that the injustice that they had suffered is met.
The financial assistance scheme is now spending more on paying benefits to those who qualify than on administration. Perhaps the Minister could confirm that, but I suspect that those figures are still pretty close together. He said that 2,500 people are benefiting at the moment, and I should be grateful if he confirmed that figure. I wonder how many people aged over 65 with qualifying schemes are still not receiving any money at all under the scheme.
Certainly, having talked to people at the pensions action group at the all-night vigil outside Downing street—the Minister attended it, and those who were there showed him a great deal of gratitude and were pleased to see him—I know that a number of cases have been brought forward in which people who are now aged over 65 and whose schemes would qualify are still not receiving any money. That seems a particularly difficult set of cases, and they must be dealt with. It is also one of the major differences with the PPF, and our view is that people should get the same benefit from FAS as that available from the PPF.
One of the other differences with the PPF relates to how cases are processed: with FAS, all the data must be provided and the details confirmed before anything can be paid, whereas under the PPF, benefits can be paid even while the fine details of processing are ongoing. As the hon. Member for Eastbourne said, it is a frustrating process that seems to involve dragging concessions from the Government, inch by inch, over a period of years. The niggardly nature of the process has caused much of the frustration.
The Minister has said repeatedly—I welcome this, if he wants to go further—that it is unlikely that these regulations will be the last ones on this subject that we will debate. I hope that that is the case and that we will be back here very soon. He referred to the Young review in which great hopes—not least, his own—are being invested to try to ensure that the matter can be concluded before the next pensions Bill. He said that he had seen an early draft of the report when it was still being batted around. Can he confirm when he will get the final report? More importantly, when does he hope to publish it and make a statement to the House? It certainly was the hope and his expressed wish in past months that the process should be completed before Christmas. Is that still his objective?
This is also important in the context of the regulations. There needs to be a change of heart by the Government in one respect. It relates to the definition of pension to which these and any future regulations apply, and that is the concept of a core pension. A core pension is at the heart of the regulations, but the concept is, at best, highly misleading in terms of outcome.
The concept of a core pension seems to have been invented largely for the purposes of the debate about FAS. Even if people get to 90 per cent. of their core pension, that would still be significantly less than the 90 per cent. that they would receive if they were paid under the PPF. In the ongoing debates within the Government, could the Minister drop the concept of the core pension and set FAS and PPF recipients on an equal basis? That would be clear, and everyone would be able to understand it.
The PPF has another advantage. The Minister made several references to administration. Clearly, there are still administrative issues to deal with, not least if the Young review identifies significant assets in the defunct schemes that could be used to the benefit of recipients. There was a question about how such funds would be managed, and there have been reports that the Government are considering whether they should be managed by the private sector—“potentially privatised” is how one report put it. Has the Minister considered asking the PPF administration to manage that element of the process as well? There would seem to be administrative advantages in streamlining the systems, and there would be cost savings if that organisation, which has already accumulated a good deal of experience in managing its own funds, administered funds on behalf of FAS as well.
I welcome the regulations, as far as they go, but I hope that the Minister will publish the Young review very soon. He says that that will take a period of time. A short period would be welcome, because the recipients—or, in most cases, non-recipients—of benefits under FAS have been waiting a very long time indeed for what they would describe, and I would agree, is a fair and just settlement: one that pays benefits at the PPF level. There is a degree of consensus in this room, even if not in parts of the Government, from what I understand. We need to bring that consensus to fruition as soon as possible for the sake of the pensioners and their families who have been waiting far too long for a fair and just settlement.
11.14 am
Mr. O'Brien: As I listen to Opposition colleagues, it becomes clear that people should not always treat as reliable what the “Sunday Torygraph” or other newspapers say. When newspapers report things, pressure groups enjoy briefing them and stirring up stories.
As I said earlier, we do not yet have the final report from Andrew Young. It is more than a little suspect when people claim that various things are being said because we have not even received the basis on which such a debate might occur. At present, we have only a draft report and I am not sure how much of it will remain as it is. Andrew Young will be putting the final touches to it in the next few days. I am hoping—although I have not had confirmation from him—that I will have the final report by Thursday. We will then want to look at it.
I am conscious of the parliamentary timetable, but do not think that I can get through the various discussions about and examinations of the report by next Tuesday. I am happy to have discussions with hon. Members from other parties about whether we should say something during the Christmas period, if we are able to, or whether it would be better to wait until 7 January, when the House returns. There will be an opportunity on Second Reading of the Pensions Bill to discuss these things more openly. I will be able to say much more to the House then, but I am happy to discuss, through the usual channels, the best approach for getting out the Government’s response to the report. My view is that it would be better to do it when the House is sitting, but at present there is a difficulty with the timing.
I have listened with care to the hon. Members for Eastbourne and for Inverness, Nairn, Badenoch and Strathspey. They are talking about spending considerable sums of taxpayers’ money. I know that the Conservatives have put forward the idea of a lifeboat and the hon. Member for Inverness, Nairn, Badenoch and Strathspey also referred to that. Let me say a word about those lifeboats, for which there have been proposals at various stages. There are supposed to be various funds, particularly in insurance policies, but also in pension schemes. It has been suggested that there is as much as £3 billion in unclaimed assets, but as the Association of British Insurers has pointed out, identifying and tracking such policies can have considerable costs and most of the policies are for only small amounts. The insurance policies may be unclaimed, but in principle someone, or an estate, owns them.
Norwich Union is trying to identify the owners of up to £40 million-worth of unclaimed policies, but it is a complex area and there are many issues relating to ownership of assets and the payment of capital gains tax. We have never said that there are no unclaimed assets—there are. However, the real issue is whether those unclaimed assets could be made immediately available to make the PPF levels of repayment that the campaign groups wanted. Those funds could not be made immediately available and it would take a considerable period of time to access them. We have asked the Young review to look at those issues and no doubt we will all be able to see the result of the review in due course.
Shona McIsaac (Cleethorpes) (Lab): My hon. and learned Friend mentioned Norwich Union, with which I have been working closely, as has my hon. Friend the Member for Great Grimsby (Mr. Mitchell), in tracking down the thousands of former trawlermen in our constituencies who did not receive the pensions to which they were entitled at the time. We must always bear it in mind that these assets are part of peoples’ estates—my hon. and learned Friend is quite right to stress that point.
Mr. O'Brien: There are indeed unclaimed assets and there will be people, or estates, with entitlement to them who have not yet made a claim. We need to approach the matter with care. In the medium term there may be issues to look at, but in the short term it would be difficult to access those funds.
Mr. Waterson: There is obviously consensus that there are substantial unclaimed assets because the Government’s unclaimed assets Bill has been introduced in the House of Lords. The Government have other views as to what that money should be spent on, but it is inherent in the light of the fund proposals, as the Minister will remember, that there should be Treasury loans to try to get the money to the people who need it quickly, while the processes that he properly describes are completed. There must be a major attempt to reunite people with their unclaimed assets, and a long-term underlying guarantee that late, genuine claimants can be looked after for years to come.
Mr. O'Brien: On a point of information, I would be grateful if the hon. Gentleman would identify the amount the Conservatives have put into their financial accounts to show how much they would take in terms of Treasury loans. I shall give way to him, if he wants to give me the figure.
Mr. Waterson: The whole point of the loans is that they will be repayable. I would have thought that was painfully obvious. This is an example of the Opposition trying to find imaginative ways of getting money to people who need it quickly, whereas the Government seem intent on making the process as long, painful and drawn-out as possible.
Mr. O'Brien: The nature of loans is that they are repayable. What I am asking about is provision in the public sector accounts—
The Chairman: Order. I have allowed a fair amount of leeway in terms of the Young report and discussions on unclaimed assets, but we ought to come back to the document we are discussing.
I will deal briefly with a couple of the points raised in exchanges in the Committee. The hon. Member for Inverness, Nairn, Badenoch and Strathspey asked how many people were benefiting—3,540 at present. He also asked about the truth of various reports about a titanic struggle. I know which ship would be going down if such a struggle occurred. I assure the hon. Gentleman that I am not engaged in a titanic struggle with anyone, but after we have received the final report there will no doubt be discussions within Government about what extra help we can provide to the pensioners. Let us have time to see the report before we engage in those lively discussions.
The hon. Member for Eastbourne asked me about average amounts. The amounts vary considerably in terms of the payments received. In a sense, it is almost pointless to say what the average is because some people receive a lot but some of them receive only a small amount. I will see whether I can get some figures that average out the amounts, to be of assistance to the hon. Gentleman.
The average time from claim to payment varies. Some trustees provide information fully and comprehensively so payments can be made fairly quickly, but other trustees do not provide detailed information. One of the reasons why the regulations are necessary is to get trustees to provide information in the best way. That will ensure that payments are received as quickly as possible. I will try to average out some of those figures, too. I am not sure that they will take us far in being able to assess things, but the hon. Gentleman asked for them so I will do my best to get them for him.
Question put and agreed to.
That the Committee has considered the draft Financial Assistance Scheme (Miscellaneous Amendments) Regulations 2007.
Committee rose at twenty-five minutes past Eleven o’clock.

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