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Pension Schemes

Volume 460: debated on Thursday 10 May 2007

9. What his latest estimate is of the number of people who have lost pensions through the collapse of company pension schemes following the entering into receivership of companies. (136453)

One hundred and twenty-five thousand—and all of them will be entitled to help, thanks to my right hon. Friend’s Budget announcement on the financial assistance scheme.

Will the Minister confirm, or categorically deny—he may confer—that when referring to the 125,000 extremely unfortunate people who have lost the prospect of a secure and prosperous old age through the collapse of their pensions, the Chancellor said, with his usual compassion, “These are not our people”?

No, that certainly was not said. Those people have suffered an appalling loss, and every Member of the House will have met people who have been in that position. Certainly no one on this side has made any such remark. I hope that the hon. Gentleman will welcome the expansion of the financial assistance scheme that my right hon. Friend has announced. That will mean that people will get 80 per cent. of the pension that they were expecting to get at 65.

I know that my right hon. Friend will welcome the strengthening of company pension schemes over the past couple of years. With many companies now making record profits, what steps is he taking to persuade them to divert more of those profits into their company pension schemes?

It is certainly welcome that we have seen a big increase in employer contributions to pension schemes. Under Tory tax rules, companies were encouraged to take pension holidays and, in far too many cases, not to contribute to their schemes at all. One of the most important steps that we have taken to build confidence was to introduce the Pension Protection Fund, which is boosting confidence in pension savings. It is a scandal that although the US equivalent of that fund was in place by 1979, for 18 years the Tory Government did nothing to protect pensions. However, the fund is now in place.

Perhaps the Chief Secretary would care to answer the question that the Economic Secretary did not answer earlier. According to independent experts, the abolition of dividend tax credits in 1997 has cost pension funds a minimum of £100 billion. What assessment has the Treasury made of this? Does it disagree with that figure, and if so, what is the figure?

I certainly do not agree with that figure. As my hon. Friend the Economic Secretary said earlier, pension fund assets have risen. They actually rose immediately after that announcement. I suggest that the hon. Gentleman look at the assessment made last year by the Pensions Policy Institute, which came up with a figure a great deal lower than the one usually cited by the Conservatives.

The workers at H. H. Robertson in my constituency are extremely grateful for the increases in the financial assistance scheme introduced in the Budget. Their pension scheme collapsed under the previous Conservative Government, partly because of the practices of that Administration. Will my right hon. Friend have a word with the usual channels to ensure that the regulatory changes necessary to bring about those Budget increases are brought before the House at the earliest opportunity? My constituents, whose scheme collapsed in 1996, are now getting elderly, and the small amounts of money that some of them get from their pension scheme are very important to their economic well-being.

I agree with my hon. Friend. The matter is urgent, and I shall ensure that his concern is passed on to my right hon. Friend the Secretary of State for Work and Pensions.