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Lord Oakeshott of Seagrove Bay: My Lords, I do not feel able to withdraw the amendment. I am sorry if I was not as clear as I should have been but I did not hear the Minister reply to the point that I made at the beginning. I was specifically referring only to funds that were wound up before 11 June 2003, so the very interesting and persuasive arguments that the noble Baroness has made about moral hazard do not apply.

Effectively, this is water under the bridge. The schemes were wound up in a period when there was no FAS and no PPF. The world has moved on and these poor people are left in a situation where, unless we insist on the amendment, they will qualify for neither the FAS nor the PPF. That cannot be fair and I wish to test the opinion of the House.

5.46 p.m.

On Question, Whether the said amendment (No. 69) shall be agreed to?

Their Lordships divided: Contents, 64; Not-Contents, 134.

Division No. 2


Alderdice, L.
Alliance, L.
Avebury, L.
Barker, B.
Beaumont of Whitley, L.
Bonham-Carter of Yarnbury, B.
Bradshaw, L.
Carlile of Berriew, L.
Clement-Jones, L.
Dykes, L.
Elis-Thomas, L.
Falkland, V.
Falkner of Margravine, B.
Fearn, L.
Fowler, L.
Garden, L.
Glentoran, L.
Goodhart, L.
Greengross, B.
Hamwee, B.
Harris of Richmond, B.
Hooson, L.
Jacobs, L.
Livsey of Talgarth, L.
Macfarlane of Bearsden, L.
Mackie of Benshie, L.
MacLaurin of Knebworth, L.
Maclennan of Rogart, L.
McNally, L.
Maddock, B.
Mar and Kellie, E.
Methuen, L.
Michie of Gallanach, B.
Miller of Chilthorne Domer, B.
Monson, L.
Newby, L.
Northover, B.
Oakeshott of Seagrove Bay, L. [Teller]
Palumbo, L.
Park of Monmouth, B.
Phillips of Sudbury, L.
Razzall, L.
Redesdale, L.
Rennard, L.
Roberts of Llandudno, L.
Rodgers of Quarry Bank, L.
Roper, L. [Teller]
Ryder of Wensum, L.
Saltoun of Abernethy, Ly.
Sharp of Guildford, B.
Shutt of Greetland, L.
Slim, V.
Smith of Clifton, L.
Sutherland of Houndwood, L.
Taverne, L.
Thomas of Gresford, L.
Thomas of Walliswood, B.
Thomson of Monifieth, L.
Tope, L.
Tordoff, L.
Wallace of Saltaire, L.
Walmsley, B.
Williams of Crosby, B.
Williamson of Horton, L.


Acton, L.
Ahmed, L.
Amos, B. (Lord President of the Council)
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B.
Bach, L.
Barnett, L.
Bassam of Brighton, L.
Berkeley, L.
Bernstein of Craigweil, L.
Bhattacharyya, L.
Billingham, B.
Blood, B.
Borrie, L.
Bragg, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Campbell-Savours, L.
Carter, L.
Carter of Coles, L.
Chan, L.
Christopher, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Crawley, B.
Darcy de Knayth, B.
David, B.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Dean of Thornton-le-Fylde, B.
Desai, L.
Dixon, L.
Drayson, L.
D'Souza, B.
Dubs, L.
Elder, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Fitt, L.
Fyfe of Fairfield, L.
Gale, B.
Gavron, L.
Gibson of Market Rasen, B.
Giddens, L.
Gilbert, L.
Golding, B.
Gordon of Strathblane, L.
Gould of Brookwood, L.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grocott, L. [Teller]
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haworth, L.
Hayman, B.
Hilton of Eggardon, B.
Hogg of Cumbernauld, L.
Hollis of Heigham, B.
Howie of Troon, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Hylton, L.
Janner of Braunstone, L.
Jay of Paddington, B.
Jones, L.
Judd, L.
King of West Bromwich, L.
Kirkhill, L.
Lamont of Lerwick, L.
Layard, L.
Lea of Crondall, L.
Leitch, L.
Lipsey, L.
Lockwood, B.
Lofthouse of Pontefract, L.
McDonagh, B.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
McKenzie of Luton, L.
Mason of Barnsley, L.
Massey of Darwen, B.
Merlyn-Rees, L.
Morgan, L.
Morgan of Drefelin, B.
Morgan of Huyton, B.
Morris of Aberavon, L.
Morris of Manchester, L.
Patel of Blackburn, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Prosser, B.
Prys-Davies, L.
Randall of St. Budeaux, L.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Rosser, L.
Royall of Blaisdon, B.
St. John of Bletso, L.
Sawyer, L.
Sewel, L.
Sheldon, L.
Simon, V.
Smith of Leigh, L.
Snape, L.
Symons of Vernham Dean, B.
Taylor of Blackburn, L.
Thomas of Macclesfield, L.
Thornton, B.
Tomlinson, L.
Triesman, L.
Truscott, L.
Tunnicliffe, L.
Turnberg, L.
Uddin, B.
Wall of New Barnet, B.
Warner, L.
Warwick of Undercliffe, B.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Elvel, L.
Woolmer of Leeds, L.

Resolved in the negative, and amendment disagreed to accordingly.

15 Nov 2004 : Column 1246

5.56 p.m.

Baroness Turner of Camden moved Amendment No. 70:

    Page 243, line 20, at end insert—

"( ) The scheme established under subsection (1) shall be subject to annual review by Parliament, with a view to ensuring that the money provided is adequate to meet liabilities as set out in subsections (3) and (4)."

The noble Baroness said: My Lords, I normally try to adhere to the requirement that amendments at Third Reading should be limited only to items of overriding importance or to items on which it has not been possible to obtain a reasonable response earlier in discussions. I must say that I might not always have agreed with the Minister's response to most of my amendments, but she has always presented a reasonable argument.

We know that in the matter of the FAS, a great deal has been left deliberately vague, and that I understand. However, in the past couple of days, a report has appeared widely in newspapers, including on the front page of the Financial Times, saying that specialists in the field were very doubtful whether the fund being established would be sufficient to meet the demands that were certain to be made on it. We are not talking about a tabloid, where scare stories are endemic—this was the lead story in the Financial Times, with headlines on the front page. I certainly thought that it was something that should be taken very seriously. It would be disastrous if members of failed schemes, having been led to believe that a rescue was imminent, should find that, after all, there was little for them in the FAS.

The amendment I have devised puts matters in the hands of Parliament. It seems reasonable; it is, after all, MPs who will be lobbied by angry constituents if the FAS is seen to be failing their needs. My amendment would require Parliament to look annually at the fund to make sure that it is adequate to meet the liabilities referred to in the legislation.

I hope that the Minister will agree that this is reasonable. The fund will, after all, be in the hands of elected Members of Parliament, who will know from their constituents whether or not it is working well. We know, of course, that pensioners, whether state or occupational, are not backward when it comes to lobbying Parliament.

We have to make sure that the FAS really is able to meet the requirements of the legislation and that people are not desperately disappointed after having their hopes raised. I beg to move.

Lord Higgins: My Lords, the noble Baroness has made a very important point. There is a case for having

15 Nov 2004 : Column 1247

such an annual review. She indicated very clearly in her opening remarks, in referring to the article in the Financial Times, studies by Ros Altmann, and so on, that the scheme was starting off on an unsound basis.

We have complained all the way through the Bill's proceedings that we really do not know what the detail of the scheme is. In fact, apart from the various amendments we have managed to make in the course of our deliberations, which have gone some way towards putting flesh on the skeleton of the single clause in the Bill covering the FAS, a huge amount is still obscure.

By now, it should be possible for the Government to give some idea of to what extent they think that the provisions that are made for the FAS are adequate. The Chancellor, in response to a panic when it looked as if the Government might be defeated in the Commons on providing support for those whose pension schemes had gone bust, came up with a proposal at the very last minute, before it arrived at your Lordship's House, saying that there would be a sum of £400 million. However, that is not £400 million immediately, but spread over 20 or so years. It will therefore probably have a discounted present value of about £250 million, which is a tiny amount compared with many other items of government expenditure.

Of course, it is not only that amount; the assets of the schemes that have collapsed should presumably be taken into account so that the figures arrived at simply by dividing the £400 million spread over 20 years by the number of possible claimants is not the precise figure that is needed. Surely, by now, the Government have done some calculations to establish whether the funding is likely to be adequate. It is generally agreed that something like 65,000 people are likely to qualify, and they are members of a considerable number of schemes which we believe are going to be entitled to help under the FAS. Allowing for the assets and dividing the number of people into the amount of money, it seems that the likely benefit will be very small indeed.

We still have absolutely no indication at all about how the Government arrived at the figure of £400 million—none whatever. As far as we can see, it was plucked out of the air in a panic measure to buy off a revolt. Even at this late stage—it certainly is a late stage; this is almost the last trump as far as this Bill is concerned—we may get an answer. However, all the indications are that false hopes are being raised. I hope that when the Bill, with its various provisions, returns to another place, those who went along with the Government on the basis of this promise, which sounded a nice round figure and generous at the time, will reappraise their positions. In our view, the sum is not likely to be adequate and I hope that the Minister can give us some idea why she thinks that it is.

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