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Occupational Pensions

Volume 455: debated on Monday 8 January 2007

Because of past limitations on pensions registry data, the information requested is not available. As we explained in our November report on speeding up the winding-up of occupational schemes, the pensions regulator has sent new scheme returns to all occupational schemes, which should provide better data in due course.

That was a pretty hopeless reply. Since 1997, tens of thousands of people around the country have lost their occupational pension, including the entire work force of BUSM in Leicester, some of whom are my constituents. Will the Minister now accept, and act on, the findings of the ombudsman’s report, which rightly highlighted the responsibilities of the Government, and will he show some real compassion to those who lost all their security in old age through no fault of their own?

Of course, what was pretty hopeless was the way in which the data were collected under the Government of the hon. Gentleman’s party—and, indeed, under this Government. We are now reforming that. I agree that we should have sympathy for people who have lost their pension scheme. That is why we have introduced the financial assistance scheme—for which, I think, the BUSM scheme will qualify, so there will be some help. Most Members will agree that the Government cannot underwrite all private risk; we must not get into a situation where we underwrite in retrospect things that we did not underwrite in advance.

My hon. Friend will be aware that the Turner and Newell pension scheme is undergoing assessment for the Pension Protection Fund. I believe that the PPF will be the best possible outcome for the scheme. However, some of the work force past and present, of whom there are hundreds in my constituency, are concerned that if a better solution comes to light at the eleventh hour they will not be allowed to transfer out of the route to the PPF and to take up the new scheme. Will the Minister give an assurance that if a better solution comes to light members of the Turner and Newell scheme will be allowed to transfer to it at the eleventh hour?

My hon. Friend is right that the scheme administrators will have to do what is in the best interests of all the members of the scheme, and I want to pay tribute to the work that he has done over many years to campaign for the Turner and Newell members. That has, in part, led to the creation of the PPF, which means that people currently saving in occupational pension schemes know that there will be a safety net if such problems arise again. That is a good thing that has come out of what has happened, and which did not exist under the previous Government.

We all understand the impact that increased longevity and changes in the stock exchange and bond markets have had on the pensions industry, but what responsibility does the Minister think that the Chancellor should personally accept for destroying the aim of 30 and 40-year-olds to have a comfortable retirement?

Even the Conservative shadow Chancellor accepts that tax changes are not the main cause; as he said, the main causes were increased longevity, the fact that that was not always factored into people’s actuarial estimates and the performance of the stock market in the late 1990s, when it fell by £250 billion, which dwarfs any tax changes. What is important now is that we work for the future and ensure that everyone has access to a good employer contribution. That is exactly what our personal accounts policy will do; it will ensure that everybody, whether or not their company offers a pension scheme, will have access to a contribution from their employer to their pension, and I think that the hon. Gentleman’s party will support that measure when it comes before the House.

The ombudsman says that the Government are responsible, the Public Accounts Committee says that the Government are responsible, and even High Court judges are now saying that the Government are responsible, so when will the Government accept that responsibility and pay compensation to those such as my constituent, Bob Duncan, who has lost 30 years of contributions, adding up to tens of thousands of pounds, because of negligent Government advice?

I have great respect for my hon. Friend but I do not agree that the Government were responsible. We did not underwrite the schemes. It is right, however, that we should have sympathy for people in such situations, and I hope that his constituents will benefit from the financial assistance scheme. I would be happy to meet the constituent he mentions, if that would be helpful.

Will the Minister confirm that taxpayers are now making each year a bigger contribution to public sector final salary schemes than the entire contribution that they are making to all the private sector schemes, both defined benefit and defined contribution? On 23 November last year, his colleague the Secretary of State said that if these trends continue the Government will have to review the deals on public sector pensions. Is that Government policy now?

No, my right hon. Friend did not say that. It is right that we continue to develop the policies on personal accounts that will allow people to make contributions to their pensions, which is exactly the point that I was just making. I think that the hon. Gentleman supports that policy, although to judge from his response to our personal accounts White Paper I am not sure whether he is still part of the consensus. The one thing that we should not do, which I believe is his policy, is to take billions of pounds out of private saving and therefore undermine it. If that is his policy, he will find it pretty unpopular.

Quite a few of my constituents lost out pre-1997 when their occupational pension schemes collapsed as a result of the fall-out of the collapse of the boot and shoe industry. Will he ensure that there is no artificial cliff edge in terms of a date, and that people get proper support, whether their occupational pension schemes collapsed pre-1997 or post-1997?

That might be quite difficult. We have set out the dates that people have to meet to qualify for the financial assistance scheme, and I would be very happy to discuss with my hon. Friend the example that she gives. The key point is that there is now a financial assistance scheme that provides help. The PPF, which was not available before, provides security for people saving in an occupational scheme, so they know that there is a safety net if such a thing ever happens again.

Does the Minister agree with his right hon. and learned Friend the Minister of State for Constitutional Affairs, who told victims of the Albert Fisher pension scheme collapse that the Government were wrong to reject the ombudsman’s findings, or is this just another example of the Hazel Blears school of collective ministerial responsibility?

Actually, I agree with the hon. Gentleman’s policy, which is not to put any extra taxpayers’ money into the financial assistance scheme. [Interruption.] If he disagrees with that, he is welcome to stand up and clarify Tory policy.