With your permission, Mr Speaker, I shall make a short statement on the examination of tissue taken from some individuals who had worked in the nuclear industry and who died between November 1962 and August 1991. Having regard to the feelings of the families of those concerned and because it is in the public interest, I want to provide the House with the information available from British Nuclear Fuels Ltd, which operates the Sellafield site where the examinations were carried out. I shall then set out how I intend to proceed with the matter.

Most of the employees concerned worked at Sellafield, but one individual worked at the Capenhurst nuclear site in Cheshire, and had transferred from Sellafield. There are data, but not medical records, at Sellafield relating to an employee at the Springfields nuclear site in Lancashire and to a further six who worked at Aldermaston. BNFL, which holds the relevant medical records, tells me that to date it has been able to identify 65 cases in which tissue was taken from individuals and analysed for the radionuclide content of organs.

It is important to tell the House about the limited nature of the records that are held by BNFL. They are medical records, which show what analysis was done on organs removed following post mortem examination. Because they are medical records that dealt with the analysis carried out at Sellafield, they do not provide an audit trail that would show in every case who asked for such an examination, under what authority and for what purpose; nor do they disclose whether the appropriate consent from the next of kin was received. Some records contain more information than others, but at this stage it is simply not clear what procedures were followed in every case.

From the information that I have, I can tell the House that 23 such requests for further examination and analysis were made following a coroner’s inquest. A further 33 requests appear to follow a coroner’s post mortem. Three requests were made associated with legal proceedings, and one request was made by an individual prior to death. Therefore, it is assumed that in the majority of these cases requests were made to help establish the cause of death in the normal way. In many cases, that would be part of the coroner’s inquiry, but we cannot be sure of that because there is not an audit trail to establish that as a fact. A further single request was made following a biopsy of a living individual. In respect of a further four cases, I understand that the records do not record by what mechanism the request for the analysis was made. Clearly, it is important to establish why these requests were made and for what purpose. It is also clear that the data obtained from these examinations have been used in other studies that were subsequently published. One of the questions that therefore arise is whether it was appropriate to use the data gathered for that purpose.

It follows from what I have said that the records held by BNFL do not disclose whether the next of kin knew of the examinations and analysis. That needs to be established. Most cases appear to have followed a coroner’s request. It is therefore possible that in some cases there was such knowledge, but it is not at all clear that even if the next of kin had known about the analysis they would have been aware that the data gathered were then to be used as part of a wider research study. However, it will be necessary to examine the coroner’s records to find out what exactly the position was.

BNFL tells me that it believes that the tissue would have been destroyed as part of the analytical process. It also believes that although there was storage of the tissue prior to the examination, any tissue that remained would have been destroyed. Certainly BNFL tells me that no such tissue exists today. However, it is not certain at this stage what procedures were followed.

The House will appreciate that some of these cases go back 45 years. It is simply not possible, therefore, to be sure whether procedures were carried out properly. As I have said, the information held by BNFL is necessarily limited and a fuller investigation is therefore necessary. I believe that it is necessary to establish why these examinations were carried out and whether the next of kin were informed and consented to the analysis. It is also necessary to establish whether any of the examinations were carried out following the correct and proper procedures, and whether the data obtained were used appropriately and with the necessary consents.

The families and the public will want to know the answers to all those questions. I have therefore asked Michael Redfern, QC, who conducted the Royal Liverpool Children’s NHS Trust—Alder Hey—inquiry to investigate this matter. I have asked him to establish the facts, and to report to me. I will publish the full terms of reference shortly.

This is clearly a difficult situation, covering events that took place up to 45 years ago. None the less, we owe it to the families, as well as to the public, to find out what happened and why.

I thank the Secretary of State for allowing me advance sight of the statement and for notifying both the shadow Secretary of State—who is abroad and sends his apologies to the House—and me of this issue as soon as he became aware of it yesterday.

All Members are shocked and incredulous at what appears to have happened. I join the Secretary of State in expressing our deep sympathy for all the families involved and our wish to see the full facts established as quickly as possible. I therefore welcome his decision to set up an immediate inquiry under Michael Redfern, QC, who has exceptional expertise and authority in this area. That is the right way forward to alleviate the great distress that will be felt today by all the families potentially involved.

I recognise that the Secretary of State’s knowledge of this matter is very recent and that it has been hard for him to establish many of the facts so far, but I hope that he might be able to give some greater detail to the House. At present, many families of former workers at Sellafield and other nuclear locations will be profoundly concerned to know whether their loved ones had body parts removed without their knowledge. When does the Secretary of State expect to be in a position to inform families whether their relatives were among the 65 cases established so far?

British Nuclear Group has confirmed that files exist for 65 cases, but will the inquiry cover all past employees at Sellafield who died before this practice was stopped in 1992, to ensure that there are not other cases beyond the 65 that British Nuclear Group already knows about? Is it the Secretary of State’s understanding that any such post-mortem tests related particularly to those who might have been affected by the fire in pile 1 at Windscale in October 1957? Or does the information that he has received suggest that it might have been a much more general practice?

The Secretary of State has told us that those involved worked at Sellafield, Capenhurst, Springfields and Aldermaston. Will the inquiry establish whether other nuclear sites might have been involved, and is it his understanding that the issue related purely to civil nuclear personnel, or might military personnel working with our military nuclear programme have been involved?

As the Secretary of State will know, rule 9 of the coroners rules allows coroners to retain material relevant to the cause of death. Clearly, coroners would not have had the power to allow material to be retained for more general research, and we agree with the Secretary of State that it is paramount that we establish precisely why tissues and organs were retained, to see whether that was entirely legal. Have there been any previous expressions of concern by families about what might have happened? Will the inquiry establish what legal advice was given to British Nuclear Fuels at the time about the legality of removing any body parts? Furthermore, will the inquiry publish the outcome of any research that was carried out on whether there may have been a link between the deaths of those involved and their exposure to radioactivity?

Will Mr. Redfern establish whether all activity complied with the Human Tissue Act 1961, which provided for inquiries to be made whether the deceased or any surviving relative objected to the retention of organs or tissue? Will he also establish what contact took place between British Nuclear Fuels and the Retained Organs Commission, set up in 2002 after Mr Redfern’s earlier inquiry, or subsequently with the Human Tissue Authority, to ensure that all legal obligations were fully complied with?

Crucially, will the Secretary of State confirm to the House that the inquiry will establish who made the decision to stop the practice and when that decision was made? Will it also establish why the families were not informed when the decision to end the practice was made or whether it was decided simply to try to brush the issue under the carpet? At this stage, does he consider that the inquiry could lead to criminal investigations?

Finally, on the broader issue, like the Secretary of State, I have visited nuclear plants and I have seen first hand the priority that they attach to safety. The Government want a new fleet of nuclear power stations to be built. Does he accept that public acceptance for that will be undermined if people do not see this issue resolved openly and transparently, and will he therefore emphasise to Mr. Redfern the importance of this inquiry being both thorough and as quick as possible?

I am grateful to the hon. Gentleman for the way in which he put his questions. For the sake of clarity, I think that I told the hon. Gentleman and his colleague that it was last Friday when I became aware of the issue. The difficulty in getting information is as I set out. BNFL’s medical records deal simply with the examinations. There is no audit trail from the time of the post mortem that indicates who in each case asked for further analysis to be carried out or, at the other end, what happened as a result of the further consideration of the findings.

The hon. Gentleman asked several questions. I agree with him that it is essential that we have an open process. That is why I have asked Michael Redfern to conduct this investigation as thoroughly as possible. I do not intend to put any constraints on what he considers. He needs to examine all the matters that he thinks are relevant.

In relation to some of the specific points raised, the hon. Gentleman referred to “this practice”. From what I have been able to discern, I do not think that it was a routine practice. What happened was that from time to time the coroner—in the majority of cases—would ask for further analysis to be carried out. I do not know whether he decided to do that because of something that he was concerned about, or whether he was asked to do it on behalf of the family concerned. If we look at the distribution of the 65 cases over what was a very long period, we realise that it cannot be said to be a practice. Certainly, as I understand it, it was not done routinely. However, one of the issues that Mr. Redfern will wish to consider is why the decisions were taken, and then he will draw the appropriate conclusions.

I cannot give the hon. Member for Wealden (Charles Hendry) any information on whether any of the people concerned were involved in, or associated with, the 1957 incident, nor can I say whether any of them were military personnel; no doubt Mr. Redfern will want to investigate that.

The hon. Member for Wealden asked about the research. There has been quite a lot, although I understand that it has been more concerned with the methodology used to calculate radioactivity in organs than with these specific cases. However, it is important to note that the records for the individuals involved are confidential. As a result, I do not know—and neither does BNFL—what conclusions were reached for each person.

The final point raised by the hon. Member for Wealden is very important and sensitive. The company, work force representatives and Michael Redfern are urgently considering how to approach the families concerned to explain what happened. The House will appreciate that in some cases the immediate next of kin are, sadly, no longer alive. However, there will be surviving family members: contacting them must be handled sensitively and, as I have told the company today, quickly. The surviving next of kin will be concerned about what happened, and the right thing to do is to explain to them exactly what we know and what we are doing to find the answers to those questions that are not yet resolved.

Are any of the body parts radioactive, and is it possible that BNFL has been involved in a cover-up? I remind the House that Ronnie Kray was buried without his brain. Should not the Government take a wider look at the Dr. Frankenstein practice of storing body parts?

I have no evidence to back up what my hon. Friend says. As I said in my statement, BNFL has said that it was inevitable that some of the human tissue that it was asked to analyse would have been stored prior to examination. As I understand the matter, that tissue would then have been destroyed in the analytical process.

The use of body parts that I have described this afternoon has been known about for about 20 years, as research has been carried out using data derived from the examinations. However, Mr. Redfern will face the problem that attitudes have changed, as has the relevant legislation. The practices of the 1960s and 1970s would not be acceptable today, and the Alder Hey inquiry that he carried out addressed some of the same issues. What is paramount, however, is that the families of the people who died and whose organs were examined know what happened. I am determined that they will.

I join others in expressing my deep sympathy to the families affected by what went on, and to those who fear that they might be so affected. I am sure that the whole House understands the anxiety that they must be feeling. I also thank the Secretary of State for his attempt to let me know last night about the statement that he has made: if I was elusive, it was because I was in the House.

I very much welcome the inquiry that the Secretary of State has announced. Although I recognise that he had no information about the matter until last Friday, and that the events about which we have heard took place quite a few years ago, I reiterate that we believe that it is very important that citizens are respected in death as they are in life. The ghastly nature of the events that have been described means that it is important to establish that body parts should not be used for research without the appropriate permissions.

However, I want to ask the Secretary of State a number of questions. He talked about the difficulty of accessing information and coroners’ records. When the events that have been described took place, a Government authority, the Central Electricity Generating Board, managed our nuclear power plants. Were the CEGB records fully transferred to BNFL, or have some of them stayed in the Government’s possession, perhaps even in the archives of the Department of Trade and Industry? Has he researched that angle, as the information contained in them would clearly be vital?

As the Secretary of State said, the Alder Hey investigation took place a few years ago, so it is beyond belief that other organisations, especially those associated with Government in any way, shape or form, should not have seen that event as a trigger for their own investigations into practices that might have operated in their organisation. Will the right hon. Gentleman ask the inquiry to explore why the decisions and events at Alder Hey did not lead to disclosure of the series of events in this case some years ago? That leads to the obvious question that if BNFL did not use that opportunity to examine its records, which other organisations failed to do so, too?

The hon. Member for Wealden (Charles Hendry), who spoke for the Conservatives, mentioned the other nuclear facilities that may have been involved and the possibility that the practice extended to military as well as civilian personnel, which we believe ought to fall within the remit of the investigation. Will the Secretary of State emphasise that point?

There are particular concerns that there may have been far more extensive practice at the Atomic Weapons Establishment at Aldermaston and Burghfield than has been revealed by the cases that have surfaced so far, so the question in everybody’s mind is whether the 65 cases are the tip of an iceberg or are they—

Order. May I point out to the hon. Lady that she has taken more than three minutes?

Perhaps I can deal with the points that the hon. Member for Richmond Park (Susan Kramer) has made. It is more likely that the UK Atomic Energy Authority held the records rather than the Central Electricity Generating Board, but one of the things that Mr. Redfern will want to look at is whose responsibility it was. As I said in my statement and in reply to the hon. Member for Wealden, it is important to remember that the analysis was undertaken at Sellafield because that is where the expertise was. In many cases, the analysis was being undertaken either at the request—it would appear—of a coroner as part of his wider inquiry or, in a smaller number of cases, as part of legal proceedings. It is not clear whether the families concerned knew whether further analysis was being performed in those cases, but it is clear that the main inquiry was being conducted by a third party; in other words, not BNFL or its predecessors.

In relation to the hon. Lady’s call for a wider inquiry, I want Mr. Redfern to find out what happened in this set of cases. If we go wider, we shall not get the answers that the families want in anything like a reasonable time scale. On her point about research, analysis of the tissues was carried out—often, it would appear, at the request of a coroner—to find the cause of death, and that point is fairly well known. As I understand it, the research was derived from the data found, and a lot of it involved looking at the methodology used to calculate the effect of radioactive material. I understand that the research has been fairly well published, although that is not to say that the families concerned would have known about it—a point I made earlier. Mr. Redfern will look at what should have happened with regard to the law prevailing at the time and so on. The law is quite different now and is much tighter, thanks to legislation published two years ago following Alder Hey, but those issues need to be examined.

Although I welcome the alacrity with which my right hon. Friend has moved, will he consider extending the remit of the inquiry to the nuclear submarine industry, where there is a long history of people being affected? Given the relevance of our nuclear developments at present, we ought to cover our tracks there, too, before we proceed.

No, I do not agree. I want to get to the bottom of what happened in this case—that is what the families want and there is a public interest in finding out. My hon. Friend refers to something far wider and there have been a lot of studies on such general matters, but this inquiry needs to look at what happened in these cases.

Does the Secretary of State agree that the difficult issue with which he has dealt so appropriately and sensitively today could be seen as just the latest manifestation of the nuclear industry’s past reputation for a dangerous combination of unbridled optimism, alarming scientific naivety and obsessive cold war secrecy? Bearing in mind the new consultation that the right hon. Gentleman is conducting into the future of nuclear power and, indeed, tomorrow’s debate on the subject in Westminster Hall, does he agree that the nuclear industry has everything to gain from the maximum possible openness on this and every other issue?

Yes, I do. I have said on numerous occasions that the industry could help itself enormously by being open. If there are problems, let us discuss them. If things went on the past, let us hear about them—subject, of course, to observing sensitivities and the confidentiality to which families are entitled. It is far better to be open about these things. As far as we understand, the practice stopped in the early 1990s and it was not until the company was approached to see whether it would allow the data gathered to be used for further general research that people focused on what had happened. People’s attitudes now are quite different from the 1960s, when—the hon. Gentleman is right—the whole history of the nuclear industry was that given the choice between being open or secretive it was secretive. That has to change, and I hope the inquiry will help the process along.

I thank my right hon. Friend for the thorough and swift way in which he expedited the investigation once he became aware of the facts as we understand them at the moment. When he establishes the terms of reference for the investigation by Michael Redfern QC, will he ensure that as the facts emerge the families of those affected are the first to be informed? There is already some wilfully misleading reportage in the media today, but that must not be allowed to distress the families further.

My hon. Friend is well aware of the difficulties. I agree that we need to make sure that we handle things sensitively. Michael Redfern clearly has experience of doing that from his last inquiry and he will want to do everything he can to make sure that the families are not distressed further. One of the things in which he will want to be involved at an early stage is how the families are approached, so that we can explain what is happening now as well as giving them as much information as possible about what happened to their next of kin in the past.

It will come as no surprise to the Secretary of State to hear that I have already received representations from constituents regarding Dounreay. Is he able to give any reassurance about Dounreay, or any other UKAEA site, and if not—as may be the case—does he agree that the matter should be looked at as part of the inquiry?

I have given as much detail as I possess about where the individuals worked. I have no information to suggest that any of them worked at Dounreay. If someone had died in Caithness and there had been further investigation, I am not sure that further analysis would necessarily have been carried out at Sellafield, but I have no information about that. As I said earlier, it is important that we have a fair idea about this problem and I want Mr. Redfern to concentrate on that. I do not want the inquiry to become so wide that we cannot reach conclusions from which we can learn. If it comes to light that anyone working at Dounreay or any other establishment was affected, that information will certainly be part of Mr. Redfern’s considerations.

Mr. David Drew (Stroud) (Lab/Co-op): On that note, will my right hon. Friend accept that those of us with nuclear stations, or former nuclear stations, in our constituencies would like reassurance that the practice did not apply at those facilities? Will he, at the very least, press BNFL—now the British Nuclear Group—to make a quick investigation to put our minds and the minds of our constituents at rest, so that we know what we are dealing with?

The investigation needs to centre on the post mortem investigations and further analysis carried out at Sellafield. That is what we are talking about. In respect of the deaths of people working in other parts of the industry, it is not possible to say whether the coroner, the families or anyone else asked for further analysis to be carried out elsewhere. That would be a different body of work. I am keen to resolve the questions that have arisen about examinations carried out at Sellafield; we need to know why and on what authority and whether the families were told. We then need to learn from whatever conclusions Mr. Redfern draws.

I welcome the Secretary of State’s swift action in setting up the inquiry under Michael Redfern. However, to follow up the question from the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), it is important that we do not get into a situation in which a drip, drip of cases come out from other nuclear installations—if there are such cases. The Secretary of State will be aware that there is no coroners’ system in Scotland. There is a different system for unexplained or sudden deaths—such deaths are presumably why the coroners were looking into these matters. Will he assure us that, should there be any indication that any Scottish installation or anyone resident in Scotland has been involved in this matter, there will be a full investigation with the relevant Departments in Scotland to ascertain what information is held in the Scottish system?

The hon. Gentleman is right to the extent that a sudden death is a matter for the procurator fiscal. I suppose this point follows on from the point that was just made by my hon. Friend the Member for Stroud (Mr. Drew). There could be cases where someone has died and the procurator fiscal, or coroner in England, or members of the family, have asked for further analysis. That could have been carried out anywhere in the country, but not at Sellafield. I am not sure whether it would be a practical proposition to find out whether—and how often—that has happened over the past 45 years.

We know from the information that we have now that in the 65 cases to date, those involved were subject to further examination at the Sellafield site. We also know that the data that were obtained from those examinations have been used in subsequent research. That is something quite distinct and we know that much about it. We need to find out more. As I said to the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso), if further information comes to light that is relevant to the consideration that I have asked Mr. Redfern to look at, of course he will look at it.

I thank the Secretary of State for the speed with which he has tackled the problem and come to the House with the information at his disposal. I welcome the inquiry and share the sympathy for the families and the deep concerns about the great distress that the matter will cause them. I hope that the inquiry is comprehensive enough to alleviate the distress and the concerns of the families. Where I am coming from, I see the problem for British Nuclear Fuels Ltd. and for the Government as a very different problem from that perceived by the public. There is a Frankenstein implication when it comes to people and nuclear radiation.

I would like to persuade the Secretary of State, if at all possible, not just to include in the inquiry the whys and wherefores of the unauthorised retention of tissue, but to spend a small amount of time on what medical information was gleaned from the biopsies and what other research was established. People’s minds are uneasy about this matter. It has serious implications for those of us across the Irish sea, where there appear to be significant pockets of cancer created by nuclear spills at Sellafield. [Interruption.] People may say that that is not true, but it is true. They should talk to some of the people with whom I live. The coastal areas of Antrim and Down are contaminated at times. People in Northern Ireland have concerns, and they will approach me with those concerns.

The hon. Gentleman is one of a small number of hon. Members who have spoken today who are asking for something that seems more akin to a general inquiry into the nuclear industry, and I will not agree to that because it is not right in the context of this inquiry. I have asked Michael Redfern to look at the matter, primarily because I am greatly aware of the sensitivities in relation to the individual families and because it is in the public interest to find out what happened. What was published is freely available, but I will arrange to put in the House Library those publications that I understand derived from the research. I will endeavour to do that in the next day or so.

May I add a historical perspective? It is sadly needed. Anybody who worked or trained as a doctor in the ’60s and ’70s knows that the standard of obtaining consent for post-mortems was abysmally low. In hospitals, it was left to the most junior houseman to ask. No detail was mentioned. It was also well known among members of the medical profession that it was automatic to retain certain amounts of body tissue for examination afterwards. In the ’60s and ’70s, and until the desperate Alder Hey disaster, it was not recognised that that should form a separate request. In 2007, it is probably hard to recognise that, but we have to be realistic about what the standards were at the time. Regrettably, it is probably still necessary—another hon. Member drew attention to this fact—to remove a whole brain if one has to examine it, because it cannot be fixed in the short period of time during the post-mortem. Obviously, that is now asked for specifically.

The hon. Gentleman makes a good point. I said earlier that it is difficult to judge those who were responsible for these matters in the 1960s by today’s standards, because the mores, law and practice are different. However, the question has arisen and the relatives are entitled to know what happened. They may be distressed by what happened and they may strongly disapprove of it, but they are entitled to know. I hope that the inquiry will help us to establish what happened. I entirely agree that it is difficult to judge people who were working 40 years ago by the standards that we might apply today.

The Secretary of State rightly said that people need to know, where possible. I put it to him that he should consult the Health and Safety Executive and the royal colleges on the terms of reference. Even though the inquiry may be limited, its implications for research for medical purposes, and for our safety and the analysis of risk, will matter. If people are not able to reuse data in the future, we may find that that has implications—as in the past, when we did not pick up on the dangers of asbestosis or pneumoconiosis or other things that have killed many more people than any possible deaths attributed to the nuclear industry. He should take great care in not letting the matter go beyond his proper purpose into some way of saying that nuclear is uniquely dangerous, when we know that it is not.

As I told the House, what is important, first and foremost, is to find out what happened. In my short statement, I quite deliberately avoided widening the inquiry into matters that, frankly, would be difficult to resolve within anything like a reasonable time. I understand the point that the hon. Gentleman makes about the repercussions. One of the reasons why I asked Michael Redfern to look at this matter is precisely that he has some experience, following the Alder Hey inquiry, and he will be well aware of the fact that his recommendations led to a change in the law just a couple of years ago. In relation to the final point: yes, the workers were employed in the nuclear industry, but we need to get these things into perspective. The nuclear industry has had its problems in the past, but it would be a big mistake to draw any conclusions from what we know today or to develop that into a wider criticism of the whole nuclear industry per se.

This is a serious matter and an inquiry is justified, but we have to be aware of the unforeseen and damaging consequences of the fallout from the Alder Hey inquiry, with the impact on hospital interest post-mortems and recruitment and capacity in the pathology profession. Will the Secretary of State endeavour to ensure that the comments made reflect the value of properly consented post-mortem examinations and the fact that the storage of tissue, properly consented, is not a Dr. Frankenstein practice, but a vital part of diagnosis, research and training? Finally, will he ensure that doctors are not demonised when they are acting in good faith by the standards of the time?

I largely agree with the hon. Gentleman. It is important to reiterate the value of post-mortem examination and further analysis, because only by that can we learn for the future. Many people working in medicine and science could not do their work if they were unable to carry out that research—and most members of the public understand that. The law now is, broadly, that the next of kin have to consent, though there is an obvious exception in respect of coroners. The position now is, of course, different from 40 years ago. As I said to the hon. Member for Wyre Forest (Dr. Taylor), it would be wrong to judge people who were operating in the 1960s by the laws and standards of 2007, as that would be unfair. I agree that it is important to recognise the value of these further investigations. I reiterate that what I want to find out and what the families—and the public—want to know is what happened in this particular case. We should be very careful about drawing premature conclusions for which there is no evidence one way or another. We should address the issue in a measured and balanced way, with all the sensitivity that the situation requires.

I beg to move,

That leave be given to bring in a Bill to make further provision in relation to child care facilities in Wales, and for connected purposes.

There are people who believe that poverty is a fact of life, and there are people who believe that many should live in poverty because that is the way of the world. I profoundly disagree, as I believe that poverty is not some mysterious dispensation that descends from heaven on some families and not on others. I also believe that one of the first duties of Government is to try to tackle the inequalities between rich and poor, between rich countries and poor countries and between rich areas and poor areas of a country. It is particularly important to tackle the inequity that is child poverty.

I believe that the single best means that Governments have of tackling child poverty is to enable parents—whether they be lone parents or happily married or cohabiting couples—to work. I think so for two main reasons. First, work brings money into the household, and what better way is there to tackle poverty than by ensuring that money is available in the household? I am glad that the Government have done so much over recent years—through child tax credits, working tax credits and the national minimum wage—to make sure that work pays. Secondly, it is also important for parents to be able to work because it gives them the social contact that is essential for their families to flourish.

The statistics clearly support my case. International figures for child poverty and parents in work show a remarkable correlation. The country with the lowest level of child poverty is Sweden, with only 4.2 per cent. of children growing up in child poverty. What is the number of women with children in work in that country? It is 76.6 per cent.—70 per cent. of women with children under three and 80 per cent. with children over three. That shows a clear correlation because Sweden is the country with the highest proportion of mothers in work and the lowest proportion of children living in poverty.

In the United States of America, on the other hand, merely 58 per cent. of women with children are in work and 21.9 per cent. of children grow up in poverty. Sadly, Britain is closer to the American level than to the Swedish level, with 57 per cent. of women with children in work and 15.4 per cent. of children growing up in poverty. When the Government came to power, we were at the bottom—the absolute bottom—of the league for child poverty in Europe. I believe that that was because there was systematic ignorance and deliberate carelessness about child poverty on the part of previous generations of Governments. I am glad that we have managed to lift ourselves from the bottom of the league, but we are still only half way up. That is why I want us to tackle, with increased energy, the issue of child care provision, particularly in Wales.

I am proud of some things that the Government have done. I am proud of Sure Start and how its rolling out made it possible for many parents to get into work. I am proud of the additional 23,000 child care places introduced in Wales over the past eight years. I am proud of the £12.5 million of European Union structural funds that have been secured to spend on child care in Wales. I am proud, particularly in respect of the Rhondda, of Flying Start—the new scheme now coming on track, whereby significant extra resources of health visitors are being provided. As well as making a difference on child care, we need to ensure that parents with health problems have the support that they need to get into work. Also important are free part-time child care for the poorest members of our community and tackling deprivation in the poorest wards in my constituency. I am proud of all of that.

Very significant problems remain, however. There is still not enough child care available. Quite simply, there are not enough places for everyone who wants to go to work to place their child in proper child care. There are many reasons for that. One is that child care is not greatly valued in society, which is why it is still not valued highly as a career. Many of the people working in child care are on the national minimum wage. At a time of relatively high levels of employment and relatively low levels of unemployment, alternative careers are available, which has made it difficult to recruit people to work in child care.

There is also a significant problem with buildings. Should we not have a sense of shame about the fact that very few Members could cite a single child care building that was expressly built for that purpose? In other countries, many thousands of buildings were expressly built for that purpose, yet we end up using buildings that were built in the 19th century for completely different purposes.

The cost of child care is still prohibitive for many parents, which makes it difficult for them to make the choice to work. There is still a lack of flexibility. Many child care facilities insist that parents have to use them for a full week rather than just two days. Parents say that they want only part-time child care and if they cannot have it, they cannot decide to go into work. We need to meet more accurately the pattern of work by which people live their lives. That often means making provision close to home and close to places of work. Many people in the Rhondda who may work in Cardiff, Newport, Swansea or elsewhere need very flexible arrangements if they are to take the opportunity of going into work.

We also need to make it possible to cope with crises. Many lone parents who have courageously gone off benefits and into work with excitement and glee are able to cope with the expected crises of the year, such as school holidays, because members of their extended family may be able to help. What is really difficult for them to cope with, however, is the unexpected crisis, when a child or parent is ill. That is why the new idea espoused by the Welsh Assembly Government, to which Labour is committed in its manifesto for Wales, is so important. I refer to the idea of having mobile mammas who will be able to provide the crisis support for child care at the moments when lone parents really need it. It will make a dramatic difference in the years to come.

Sometimes child care provision does not feel as inclusive of every young parent as it might. One young parent told me that it was great going along to many of the new facilities and everyone was very welcoming, but it sometimes felt like a gathering of the middle classes. Everyone was chatting away about how to cultivate organic pears, but they did not seem to have a proper understanding of how child care might fit their particular personal needs. We need to go much further in making child care available, particularly to those who have gone forward with teenage pregnancies.

Two very important principles are relevant. First, there should be no compulsion. We should not be forcing every single parent to put their child into child care and go into work, but we certainly should make it possible for every single parent to have that option. Also, child care should not mean just warehousing. Some people have been concerned about recent reports suggesting that children who have grown up in child care that effectively places babies in a row and leaves them there for several hours turn out to have more social problems later in life than others who did not go through that.

The role of the mother will always be vital in bringing up a child, and child care should not be an alternative to the role of the mother. It is vital that every child learn the difference between a frown and a smile from one person, and the primary person in that role will always be the mother. But it is important, too, that we give opportunities for people to go into work. It is absolutely vital that we get this right. We should not have a stop-start approach to child care; there should not be a new idea every two or three years, because we must introduce a generational change.

I wholly support the Welsh Assembly’s idea of mobile mammas, because that will make it much easier for young mums in particular to cope with crises. It is important that we investigate whether we should have a universal right to child care, as parents enjoy in Sweden. It is important that we have a recruitment campaign to ensure that more people have access to child care. Finally, there are 1,420 lone parents on benefit in the Rhondda. We must not fail them, and we must not fail their children either.

Question put and agreed to.

Bill ordered to be brought in by Chris Bryant, Jessica Morden, Julie Morgan, Mrs. Moon, Chris Ruane, Ian Lucas, Albert Owen, Alun Michael and Mr. David.

Childcare Provision (Wales)

Chris Bryant accordingly presented a Bill to make further provision in relation to childcare facilities in Wales; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 19 October, and to be printed [Bill 91].

I beg to move, That the clause be read a Second time.

With this it will be convenient to discuss the following:

Amendment (a), in line 9, leave out from ‘than’ to end of line 11 and insert

‘the amount that would be paid in the same circumstances in payments made in accordance with the pension compensation provisions set out in Schedule 7, save that references to “the Board” shall be read as references to the Scheme Manager defined in subsection (3).’.

New clause 11—Financial Assistance Scheme—

‘(1) The Secretary of State shall commission an independent review of the Financial Assistance Scheme having regard (among other things) to—

(a) the efficiency and cost effectiveness of its administration;

(b) whether it could be more effective if administered by the staff of the Pension Protection Fund;

(c) whether it is adequately financed;

(d) what other sources of finance could be made available, including but not limited to unclaimed assets;

(e) whether it should be engaged in the purchase of bulk annuities.

(2) The Secretary of State shall publish the findings of such review within six months of this Act coming into force.’.

New clause 24—Financial Assistance Scheme (No. 2)—

‘(1) The Pensions Act 2004 (c. 35) is amended as follows.

(2) In section 286 (financial assistance for members etc.) insert after subsection (3)—

“(3A) Regulations under subsection (1) must provide that the payments to be made to or in respect of qualifying members shall be of the same amount, and shall be paid in the same circumstances, as payments made in accordance with the pension compensation provisions set out in Schedule 7, save that references to “the Board” shall be read as references to the scheme manager defined in subsection (3).”.’.

New clause 25—Financial Assistance Scheme: eligibility where employers remain solvent—

‘(1) The Pensions Act 2004 (c. 35) is amended as follows.

(2) In section 286 (financial assistance for members etc.) insert after subsection (2)—

“(2A) Conditions prescribed under paragraph (c) in the definition of “qualifying pension scheme” in subsection (2) shall not exclude schemes which have been wound up in the absence of an insolvency event as referred to in Part 2.”.’.

New clause 26—Financial Assistance Scheme (No. 3)—

‘(1) Section 286 (financial assistance for members etc.) of the Pensions Act 2004 (c. 35) is amended as follows.

(2) After subsection (1) insert—

“(1A) The regulations must provide, save for any necessary changes, that each person who would have had an entitlement to payment as compensation under Schedule 7 (Pension Protection Provisions), if each qualifying pension scheme had been an eligible scheme for which the Board had assumed responsibility as specified in paragraph 1 of that Schedule, is given an equivalent entitlement to payment.”

(3) Omit subsections (6) and (7).’.

New clause 27—Financial Assistance Scheme (No. 4)—

‘(1) Section 286 (financial assistance for members etc.) of the Pensions Act 2004 (c.35) is amended as follows.

(2) After subsection (4) there is inserted—

“(4A) The regulations must provide (subject to any changes which the Secretary of State may consider necessary) that each person who would have been entitled to compensation under Schedule 7 (pension compensation provisions) is given an equivalent entitlement to such compensation, whether or not each qualifying pension scheme has been an eligible scheme for which the Board had assumed responsibility as specified in paragraph 1 of that Schedule.”.’.

New clause 39—Amendments to Financial Assistance Scheme Regulations 2005 (No. 1)—

‘(1) The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) are amended as follows.

(2) In regulation 5(1) for “Secretary of State” substitute “Board of the Pension Protection Fund (“the Board”)”.

(3) In regulation 5(2)(a) leave out from “Secretary of State” to end of sub-paragraph and insert “the Board”.

(4) In regulation 5, sub-paragraph 2(b) is omitted.’.

New clause 40—Amendment to the Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) (No. 2)—

‘(1) The Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) are amended as follows.

(2) In regulation 9, paragraph (c) is omitted.

(3) Regulations 11 to 13 are omitted.’.

New clause 41—Pensions Protection Lifeboat Fund—

‘(1) There shall be established as soon as reasonably practicable a Pension Protection Lifeboat Fund (“the Lifeboat Fund”) which shall be administered by the Board of the Pension Protection Fund (“the Board”).

(2) The purpose of the Lifeboat Fund shall be to make supplementary payments to persons who are qualifying members of qualifying schemes as defined by the Financial Assistance Scheme Regulations 2005 (S.I. 2006/1986) (or who would be qualifying members if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age), in addition to the sums payable in any event under those regulations.

(3) The supplementary payments made to any person in accordance with subsection (2) shall equal the amount that, taken together with any amounts payable to that person under the Financial Assistance Scheme and amounts payable to that person as scheme benefits under the qualifying pension scheme in respect of which he is a qualifying member of the Financial Assistance Scheme (or would be a qualifying member if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age), is the amount that would be payable to that person if that qualifying pension scheme was accepted into the Pension Protection Fund.

(4) The Secretary of State shall make such loans to the Lifeboat Fund as are necessary to allow the discharge of its functions and in particular its obligation to make supplementary payments under subsection (2).

(5) The Secretary of State shall make such loans from time to time having regard to—

(a) requests for such loans received from the Board;

(b) the amount of assets transferred or to be transferred to the Lifeboat Fund under the Scheme (as defined in section [Transfer of unclaimed assets] (“the Scheme”));

(c) the level of any claims on the Lifeboat Fund in respect of assets transferred to it under the Scheme.

(6) Loans made in accordance with this section must be repaid to the Secretary of State as soon as, in the reasonable opinion of the Board, it is prudent to do so having regard to—

(a) the obligations of the Lifeboat Fund;

(b) the amount of assets transferred or to be transferred to the Lifeboat Fund under the Scheme; and

(c) the level of claims on the Lifeboat Fund in respect of assets transferred to it under the Scheme.

(7) Loans made under this section shall be interest free.

(8) The assets of the Lifeboat Fund shall be held separately from the assets of any other fund under the control of the Board.

(9) The Secretary of State may by regulations make further provision in connection with the Lifeboat Fund.

(10) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.’.

New clause 42—Pensions Unclaimed Assets Recovery Agency—

‘(1) There shall be a body called the Pensions Unclaimed Assets Recovery Agency (“the Agency”).

(2) The Agency must be established no later than three months after the passing of this Act.

(3) The Agency shall consist of not fewer than six nor more than twelve members to be appointed by the Secretary of State, and the Secretary of State shall appoint one member to be the chairman, and another member to be a deputy chairman, of the Agency.

(4) In appointing a person to be a member of the Agency, the Secretary of State shall have regard to the desirability of appointing persons who have knowledge of, or experience relating to, matters relevant to the functions of the Agency.

(5) A member of the Agency may hold office for such a period as the Secretary of State may determine, but not exceeding—

(a) six years, in the case of the chairman, and

(b) four years, in the case of other members.

(6) The Secretary of State may make payments to the members of the Agency by way of remuneration and make payments to them in respect of expenses incurred by them in the performance of their duties.

(7) The Secretary of State may also defray any other expenses of the Agency.’.

New clause 43—Functions of the Pensions Unclaimed Assets Recovery Agency—

The functions of the Agency are—

(a) to obtain such information about such classes of unclaimed assets as may be prescribed by the Secretary of State by regulations;

(b) to provide the Secretary of State with that information and any other related information held by the Agency which the Secretary of State may from time to time require;

(c) to administer the scheme to be established by virtue of section [Transfer of unclaimed assets].’.

New clause 44—Pensions Unclaimed Assets Recovery Agency: provision of information—

‘(1) Subject to subsection (2) below, the Agency may, by notice, require any person to supply it, within a specified period or at a specified time or times, such specified information as the Agency considers it needs for the purposes of carrying out its functions under section [Function of the Pensions Unclaimed Assets Recovery Agency].

(2) This section does not authorise any requirement in relation to information to be imposed on any person unless that person carries on a business in the United Kingdom; but a requirement may be imposed under this section on a person in relation to information in the possession or control of a connected person or undertaking outside the United Kingdom.

(3) Any person who, when required to do so under this section, fails without reasonable excuse to supply any information, shall be liable on summary conviction—

(a) to a fine not exceeding level 5 on the standard scale; and

(b) in the case of a continuing offence, to an additional fine not exceeding £200 for every day during which the offence continues.

(4) Any person who knowingly or recklessly supplies any information which is false or misleading shall be liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years, or to a fine, or both; and

(b) on summary conviction, to a fine not exceeding the statutory maximum.’.

New clause 45—Transfer of unclaimed assets—

‘(1) The Secretary of State shall by regulations, not later than twelve months after the passing of this Act, establish a scheme (“the Scheme”) for the transfer of such unclaimed assets as the regulations shall prescribe to the Lifeboat Fund.

(2) Regulations made under this subsection shall provide for—

(a) a definition of those unclaimed assets to which the Scheme applies, including the extent to which the Scheme is applicable to assets whose ownership is known, or can be determined;

(b) the transfer to the Lifeboat Fund of a prescribed proportion of such unclaimed assets as the regulations shall prescribe, and the manner and timing of such transfers;

(c) the transfer to the Lifeboat Fund of liability for any claim in respect of assets transferred under the Scheme to the Lifeboat Fund;

(d) penalties to be imposed on any person holding assets prescribed under subsections (1) or (2)(b) who fails to transfer them or such proportion of them as is prescribed in accordance with the Scheme.

(3) The power to make regulations under this section is exercisable by statutory instrument.

(4) A statutory instrument containing regulations under this section is subject to annulment in pursuance of a resolution of either House of Parliament.’.

New clause 46—Purchase of annuities—

‘The Secretary of State shall, as soon as is reasonably practicable, by regulations require the trustees of qualifying schemes as defined by the Financial Assistance Scheme Regulations 2005 which have not yet completed winding-up to desist from purchasing (except where, on or before 18th April 2007, they have entered into a binding contractual commitment so to do) or making binding commitments to purchase, annuities on behalf of scheme members, for a period of nine months from 18th April 2007.’.

New clause 47—Duty to make on-account payments—

‘(1) Pursuant to his powers under section 286(3)(d) of the Pensions Act 2004, the Secretary of State shall as soon as is reasonably practicable make regulations requiring trustees of qualifying pension schemes to make on-account payments to qualifying members, or persons who would be qualifying members if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age.

(2) The Secretary of State may make such loans to trustees of qualifying schemes as appear to him to be expedient to enable them to make such on-account payments where adequate scheme assets appear to him not to be available to them and regulations may prescribe for the recovery of such loans upon completion of wind-up of a qualifying scheme.

(3) Regulations made under subsection (1) above shall provide that on-account payments shall equal the amounts that would be payable if the qualifying scheme was accepted into the Pension Protection Fund.

(4) The regulations shall provide for payment to trustees of a qualifying pension scheme of payments due to a qualifying member of that pension scheme (or a person who would be a qualifying member if the qualifying age for the Financial Assistance Scheme were set at the level of the qualifying scheme retirement age) by the Financial Assistance Scheme or by the Lifeboat Fund (as defined in section [Transfer of unclaimed assets]) in respect of periods for which on-account payments to that member have been made in accordance with subsection (1).’.

Government amendments Nos. 19, 20 and 21.

Amendment No. 14, in schedule 7, page 69, line 38, at end add—

‘Part 7

FINANCIAL ASSISTANCE SCHEME

Amendment No. 17, in title, line 4, after ‘Authority;’, insert

‘to establish the Pension Protection Lifeboat Fund;’.

Amendment No. 18, in title, line 4, after ‘Authority;’, insert

‘to make provision for the transfer of a proportion of unclaimed assets to the Pension Protection Lifeboat Fund;’.

Amendment No. 22, in title, line 4, after ‘Authority;’, insert

‘to make provision about the establishment and functions of, and to confer powers on, the Pensions Unclaimed Assets Recovery Agency;’.

New clause 38 deals with the important issue of failed company pensions and the financial assistance scheme. In my speech, I want to set out three things: first, how the scheme will now guarantee 80 per cent. of expected core pensions to all 125,000 people affected, in contrast to the Opposition, who said that they would not put any more taxpayers’ money into the scheme; secondly, how a review, led by industry experts, will look at topping up that 80 per cent., looking in particular at pooling assets; but thirdly, how we should wait for the outcome of that review, rather than voting for the Conservative amendments, which have already been condemned by the Association of British Insurers.

Many Members in the Chamber today have constituents who lost their pensions because their companies went into insolvency with the scheme underfunded. I have met dozens of people who have been affected. I think of Willie Riggins, Bill Adams and Bob Duncan—people who worked all their lives and whose pension was taken away through no fault of their own. Members on both sides of the House have experience of that and have great sympathy for people in that situation. That is exactly why, in the Pensions Act 2004, we introduced the financial assistance scheme, and why we put in place the Pension Protection Fund, to ensure that today’s workers do not face the same threat again.

Will the Secretary of State give way?

I am not the Secretary of State, but I am happy to give way.

Apologies—I am getting ahead of myself. The Minister talks about the financial assistance scheme. Changes are welcome, but many people’s schemes have been wound up when the company is not insolvent, and the scheme does nothing to help them. Has he given any consideration to what help, if any, can be given to those people?

I am just getting into my stride, but I will come to that at the end. The issue throughout has been whether we could make a clear difference between companies that were affected before the financial assistance scheme came into place and companies that are still trading today. We would not want to open up a loophole—I am sure that the hon. Gentleman would not want to do so—whereby perfectly healthy companies could dump their scheme on the taxpayer, but I will come to that issue later.

Given that sympathy, the Government have always sought a satisfactory solution for those who have suffered, but there has always been a debate about the level of that assistance. As the ombudsman herself made clear,

“it was the sole responsibility of Government or that the taxpayer should pick up the tab was not what I said... I did not say, ‘Write a blank cheque’, but organise a remedy”.

The Government have organised a remedy, but let us be clear about why have we had to do so. As the European Court of Justice found during our proceedings in Committee, the then Tory Government failed to implement the 1980 insolvency directive and to protect people’s pensions. As the judicial review found, the 1996 leaflet published by the then Tory Government was misleading and maladministrative. In 1995, when the Labour party in opposition proposed creating a pensions lifeboat, the now shadow Foreign Secretary, then the Pensions Minister, opposed it, and this Labour Government had to introduce the PPF.

The hon. Member for Runnymede and Weybridge (Mr. Hammond) said during his winding-up speech yesterday that there was no need to introduce a pension lifeboat in 1995. If he and the Conservative party had taken our advice, there would be no need to introduce one now, and we needed to wait for a Labour Government to do so. The Government had previously defended that Tory record, but those court cases have made it clear that those actions were wrong, and we have therefore reconsidered the level of the financial assistance scheme.

By contrast, the Conservative Front Benchers have always resisted putting more taxpayers’ money into FAS. The hon. Member for Eastbourne (Mr. Waterson) said in the House that

“at no stage have the official Opposition ever committed taxpayers’ money to this issue above and beyond what the Government have already committed.”—[Official Report, 27 June 2006; Vol. 448, c. 175.]

We look forward to finding out whether they will support the money that we are putting in, but there is a very clear difference for people between the Conservative amendments, which would try to find money by taking it from one set of pensioners and giving it to another, and our amendments, which will guarantee money from the taxpayer to get to at least 80 per cent. of people.

Perhaps I should just make it clear to the House that Conservative Members will support new clause 38, and that our amendments are not an alternative to that new clause; they assume the acceptance of new clause 38, which will essentially implement the commitments that the Chancellor and the Secretary of State for Work and Pensions made at Budget time and build upon them.

We will be grateful for that support, but the House will notice a pattern in Conservative policy making: not to make any policy, and when we come up with a policy, to back it. The Conservatives said that they would not put in any more taxpayers’ money; now that we have done so, they are saying that they want to. The problem with the hon. Gentleman’s policy is that, even before it has been debated in the House, the Association of British Insurers has been condemning it as another raid on pension funds. So the Tory party was yesterday complaining about a raid on pension funds, and today it is having a row with the ABI about one that it is proposing. The Conservatives need to decide which way they are facing.

Is there not a pattern in Government policy making as well: three times, the Government have been dragged perhaps not kicking and scheming, but kicking and screaming into providing some pension compensation, first with the financial assistance scheme and then with two increases in its size? Given the amount that is now being put in and the feeling of concern and injustice, why on earth cannot the Government go the final step today to deliver what most hon. Members on both sides of the House want: fair compensation at PPF level, with the other changes that are in the cross-party amendments?

Again, I will turn to that in my speech slightly later on, but I want to contest what the hon. Gentleman has just said. We could have just looked at the outcome of those court cases and continued to defend them. That would have benefited only a very small number of people. The ECJ made it very clear that it thought that damages would not be payable, so the case would have affected only people who went into insolvency after the case. Similarly, the judicial review only asked us to reconsider the decision. Given that the courts had made it clear that the Conservative Government’s decisions that we have defended had been wrong, we decided that it was time to come up with a scheme that would provide at least 80 per cent. and to listen to the suggestions that the hon. Gentleman, other Opposition Front Benchers, the ombudsman and my honourable colleagues have been making and set up a review. That is the right way to proceed, but I will turn to his precise point later in my speech.

The Minister again mentions the review. It is important that we clarify the situation because hon. Members will have heard the Prime Minister talking about the review. The Minister has carefully talked about the review considering pooling assets, but the Prime Minister said that it will consider the use of unclaimed assets. Will the Minister confirm that the Prime Minister made a mistake?

No, the Prime Minister did not make a mistake. The hon. Gentleman knows very well the terms of reference, which say that we will consider all suggestions that people put forward—we look forward to his submission. All that we are saying is that this needs to be based on proper work by experts, rather than amendments that, with great respect, the hon. Gentleman does not know are workable.

May I take the Minister back to what the ABI said? If it was saying that Members on either side of the House wanted to transfer the unclaimed assets of pensioners, they could not have misunderstood the position more severely. We have been saying that we should use the unclaimed assets of banks and building societies, which are separate from any unclaimed assets of pensioners and from unclaimed moneys that insurance companies hold that have clear owners—either policyholders or shareholders.

We will be happy to read any submission that my right hon. Friend makes to the review. However, this debate shows exactly the need for that review. Rather than accepting amendments that people do not know are workable, it is right to hold a review involving experts, such as lawyers, people from the insurance industry and scheme administrators, who can come forward with proposals that will be workable and properly thought through.

Given that Conservative Members are happy to support Government new clause 38, are there any Conservative new clauses before the House today that Labour Members would accept equally graciously?

The right thing to do is to look at the outcome of the review.

The logic of what the Minister says is that he is happy to accept only Government new clauses ahead of the review and that any new clauses that we have tabled cannot be accepted until after the review.

The problem with the Conservative amendments is that they could expose the Government to compensation if annuity rates were to fall. They could expose the Government to moral hazard if people started to manipulate the rules. They could also expose the Government to legal challenge, including in the European Court of Justice. The last thing that the House should do is to raise pensioners’ expectations on the basis of amendments that have been hastily drawn up for this debate. Instead, we should have a proper review.

I want to return to an issue that was raised before. I know that the Minister said that he would address it later in his speech, but I hope that this is the right time to make this point. I have visited him with pensioners from my constituency who worked for the firm Tinsley Bridge, which is still in existence. Given that the firm is not in liquidation, its workers cannot at present be covered by the financial assistance scheme. However, the firm is not in liquidation only because the pension scheme decided not to pursue from the company the full amount due to it. The pension scheme has thus been wound up, so the workers in the scheme cannot join the PPF. The company’s pensioners and future pensioners are thus caught in a situation in which they cannot be part of the PPF or receive any help from the FAS. About 8,000 people in the country are affected in such a way. Can my hon. Friend give us any assurance that those workers will now be included in the FAS?

I was going to come on to this point later, but I will deal with it now because I have been asked about it twice. My hon. Friend has campaigned on the matter long and persuasively and brought a delegation to see me. The Public Administration Committee has raised the matter, too. We have always been clear that we wanted to ensure that we did not create a loophole, as I said to the hon. Member for Angus (Mr. Weir).

I am delighted to be able to tell my hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) that we can announce today that we will further extend the FAS to cover members of schemes that began winding up between 1 January 1997 and 5 April 2005—I believe that that covers the Tinsley Bridge scheme—when a compromise agreement is in place and when enforcing the debt against the employer would have forced the employer into insolvency. We estimate that that will benefit an additional 8,000 members of some 15 schemes.

May I put on record my thanks and those of my constituents, the workers at Tinsley Bridge and those at all the other firms? A lot of people woke up this morning worrying about their future because they thought that their pensions would be either non-existent, or greatly reduced. My hon. Friend’s statement has certainly given those people a lot of cause for cheer.

I thank my hon. Friend for his comments. I hope that hon. Members will thus think that it would be inappropriate to press new clauses 25 and 40 to a Division. Those measures would bring into the FAS any failed scheme, regardless of the solvency position of the employer.

rose—

Will the Minister give way?

Does the hon. Member for Stone (Mr. Cash) wish to intervene on this point?

The Minister has met—

Order. We cannot have the Minister partially giving way. I think that he has allowed the hon. Member for Stone (Mr. Cash) to intervene.

The Minister was good enough to meet Mr. Richard Nicholl and me to discuss amendments that are adequately covered by the excellent new clause 25, which was tabled by the hon. Member for Cannock Chase (Dr. Wright), who also wishes to intervene at this stage. Would the Minister be good enough to confirm that the arrangements proposed in new clause 25 would come into effect under the proposals that he has announced in response to the questions raised by the hon. Member for Sheffield, Attercliffe (Mr. Betts)?

I will have to write to the hon. Gentleman to set out the situation for the precise scheme to which he refers. We are trying to create a separation between schemes that decided to put in place a compromise agreement before the introduction of the FAS and schemes that did not do so. The danger of creating a procedure as set out in new clause 25 is that perfectly viable companies could dump their pension commitments on the taxpayer, which would not be right.

I am pleased by what my hon. Friend has said, but I do not understand the basis on which he argues that he therefore could not accept new clause 25. The new clause refers explicitly to schemes that are eligible for assistance under section 286 of the Pensions Act 2004. That measure specifies that its provisions apply only to schemes that were in the process of winding up before the specified date on which schemes became eligible for the PPF. His argument that the new clause would open the door to problems thus simply cannot be true.

I am advised that new clause 25 would open the door to a wider range of schemes. When people talk about solvent employers, I believe that they are talking about the category that we have identified today. We have no intention of doing anything other than delivering for those schemes. I hope that my hon. Friend will be reassured by what I have said. If he makes a speech, I will try to intervene on him to confirm the exact situation.

rose—

I think that I should make some progress because we have been debating the group for 15 minutes.

I am delighted that the Government have committed more money, as the Chancellor announced in the Budget on 21 March. The scheme was going to benefit 45,000 people; now it will benefit all 125,000 affected, in addition to members of the solvent schemes that I have just mentioned. The scheme was going to benefit people up to £12,000 per year, but it will now benefit people up to £26,000 a year. It was going to taper down to 50 per cent. and then to nothing for people who were not covered. Now it will be at 80 per cent. for everyone, and an extra 100,000 people will get more benefit. In all, we are allocating a further £5.6 billion in cash terms. The original amount committed to the FAS in 2004 was £400 million in cash. We then extended that figure to £2.3 billion. With this further extension, we have reached £8 billion in cash, or £1.9 billon in net present value. That represents a significant commitment to helping the people whom we are aiming to address through our measure, which I hope that the House will welcome.

I appreciate the Minister’s clarification about the increase in overall funds. However, the last figures on payouts from the FAS that I received suggested that the amounts were not in the region of billions. So far, £12 million has been allocated to 1,000 of the 10,000 eligible pensioners. Of that £12 million, £4 million has gone to the pensioners, while £8 million has been spent on administration. Can the Minister give us any indication of how we can address this incredible delay during which the vast majority of pensioners have received nothing?

I am afraid that there is a misunderstanding about the task that the financial assistance scheme has had to undertake, which the PPF or whoever else was tasked with running it would have had to undertake. The FAS has had to go through hundreds of schemes to see whether they are eligible; it has had to set up a new IT system; and it has had to get data from the trustees about exactly what people are entitled to and compare that with FAS. That is why there has been a significant up-front cost. That work is now largely complete, and we are paying everybody whom we are in a position to pay. Everybody who has asked for initial payments is being paid. There is no delay in FAS; the delay is in requests for initial payments. We need schemes to come forward and ask for those. I will return to that matter later in my speech.

Because people outside may not understand what the Minister has just said, will he clarify that he is talking about the trustees having asked for payments to be made? This is not a question of individual potential recipients having failed to ask for payments.

That is absolutely right; it is the trustees who we are encouraging to ask for payments. I have written to a number of them, which has helped in certain cases. I encourage all Members of the House who are aware of schemes in which there are delays to contact the trustees. Some are very good and some have been too slow. The right way to seek to get more money for people is to encourage the trustees to apply for initial payments.

I want to pay tribute to Community and Amicus for their tireless work at the forefront of the campaign on this issue. They have been joined in that by many Members in the House, including my hon. Friends the Members for Aberdeen, South (Miss Begg), for Ayr, Carrick and Cumnock (Sandra Osborne), for Jarrow (Mr. Hepburn), for Cardiff, North (Julie Morgan), for Sittingbourne and Sheppey (Derek Wyatt), for Aberavon (Dr. Francis), for St. Helens, North (Mr. Watts) and for Vale of Glamorgan (John Smith), and my right hon. Friends the Members for Cardiff, South and Penarth (Alun Michael) and for Islwyn (Mr. Touhig). That list shows the strength of feeling in the House about this policy. We believe that 80 per cent. of the funding is the right amount for the public purse to bear.

New clauses 24, 26 and 27 all call for the taxpayer to fund FAS assistance at the same level as the pension protection fund, which would essentially be 90 per cent. with some limited indexation. What is the Tory position on the new clauses? We look forward to finding out later. We have a clue, however. The hon. Member for Runnymede and Weybridge has obviously been pestering the shadow Chancellor for more money. We had evidence of that in yesterday’s debate, when it emerged that the shadow Chancellor had said that

“there are lots of Conservatives who come up to me and say we’ve really got to put more money into pensions”.

Presumably, he was referring to his Front-Bench colleagues. Unfortunately, the hon. Member for Runnymede and Weybridge has been slightly disappointed because the shadow Chancellor is obviously feeling under such pressure that he had to say publicly, at the Conservative party conference, that

“part of the test of whether we are ready for government is whether we can resist those additional draws on public expenditure.”

If the Conservatives vote for these new clauses, they will be failing that test. They will be making an unfunded commitment to an additional £2.7 billion. If they vote for the new clauses, they will be tearing another hole in their already tattered reputation for fiscal discipline.

Let me be clear: the Conservatives’ proposal for a lifeboat fund is just another uncosted policy. They propose to make a loan from the Treasury. What is a loan from the Treasury other than public expenditure? It is a bit like going to a bank and saying, “Give me a mortgage. I am going to find someone round the corner to pay it back.” It is a public spending commitment, and if the Conservatives vote for it that is exactly what they will be making. [Interruption.] Oh, it is a costed public spending commitment—costed, but not funded. That is the problem with the Conservatives’ policy. They make commitments, but they have absolutely no idea of how to fund them.

I thank the Minister, who is obviously in a combative mood, for giving way. He implied that our new clauses and amendments were put together on the back of a fag packet over the weekend. Is he not aware that Ros Altmann, the pensions expert who has advised the Government, supports them? She has made it clear that she believes that they are workable and affordable, and that the Government should accept them.

I have great respect for Ros Altmann, but as far as I know she never worked as an adviser to No. 10 or No. 11, as is often said. We are happy to look at her suggestions as well as others made by Conservative Front Benchers. My point is that the Conservatives are starting to emulate the hon. Member for Yeovil (Mr. Laws) in making policy proposals that they have no idea how to fund. No wonder they are reputedly trying to lure him to their Front Bench; they are obviously learning from his example. We believe that there is a better approach.

We are very entertained by these parts of the Minister’s speech, but before he wraps up his comments—we never know when he is going to sit down—will he explain the point that he left unresolved earlier? What is the difference between the proposal that he makes today, for the first time, to the hon. Member for Sheffield, Attercliffe (Mr. Betts) and that in new clauses 25 and 40? What would be the problem with accepting those new clauses? How many people who would be included in that proposal are left out of the one that he is making? Surely we need to know that before we vote.

Healthy, solvent employers may have wound up their scheme when employer debt was set at the minimum funding requirement. Such employers should have made good their pensions promise—they were funded at the MFR—so new clause 25, which would allow those schemes in, is inappropriately wide. That is a consequence of the drafting of the new clause rather than any difference of policy. People were asking for the scheme to cover 6,000 pensioners in solvent companies; we are actually covering 8,000. The House is getting slightly over-excited about a point on which there is not a difference.

The Minister has given a very technical answer to the question asked by the hon. Member for Yeovil (Mr. Laws). How many additional scheme members would get through the gateway if new clause 25, rather than the Minister’s proposals, were accepted?

The whole point is that people do not know—[Hon. Members: “Ah!”] We can quantify the people who have compromise agreements because we know exactly who they are. They are people for whom the ombudsman and Members of the House have been campaigning. We have done exactly what people have asked us to.

This is important so we must be clear about it. Is the Minister saying that he accepts the substance of new clause 25, reflecting the announcement that he has made this afternoon, but he thinks that it is technically deficient—although I am advised that that is not the case—so he will incorporate it in the Bill at a later stage, to remedy its technical deficiency?

I am saying that we have the same intention and that we will make proposals to make sure that what we have said is exactly what happens. I am happy to meet my hon. Friend to discuss the matter, but I am pretty sure that he will be happy with what we have done because our intention is the same.

We believe that 80 per cent. is the right amount from the taxpayer, but we are not saying that that is all that should be considered. The taxpayer should fund up to 80 per cent. but there should then be a review of alternative sources of funding that have been suggested. The taxpayer does not fund the 90 per cent. level provided by the PPF. There is no taxpayer money at all in the PPF. There will now be nearly £2 billion of taxpayers’ money in net present value terms in FAS. In contrast, the PPF is funded entirely by the levy payments of member companies, which are paying to insure themselves against future possible insolvency. We therefore think that the balance that we are striking of nearly £2 billion of public money in FAS and no public money in the PPF, with a review to look at what more could be done, is the right one for the taxpayer and for the people involved.

Can the Minister tell the House what would be the additional net present value cost of granting the PPF level of benefits after the offsets for tax and lower means-tested benefit payments?

Yes, if the hon. Gentleman can tell me what tax and benefit policy will be for the next 50 years. So far there is very little interaction between FAS payments and pension credits. Very few of the current recipients get pension credits, so that will not reduce the cost significantly. The difference for the payments that I set out earlier is the additional £2.7 billion, which in net present value terms is about £600 million, or an increase of a third in the current scheme.