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Pension Protection

Volume 464: debated on Monday 8 October 2007

8. If his Department will review the compensation rate for those who lost out when their occupational pension schemes were wound up. (156110)

As the Minister will be aware, more than 120,000 people work for companies that have gone out of business leaving insufficient money in their pension funds. When will he agree that the Government’s compensation scheme should be bolstered to ensure that those workers receive the same compensation as is available under the Pension Protection Fund?

The financial assistance scheme assets review is being led by the Government Actuary, Andrew Young, and is considering the better use of the assets currently in failed pension schemes. The Government have indicated that we are prepared at least to match any extra funding that might arise out of the assets review. Further funding is therefore available. The Government have the goal of moving towards a 90 per cent. top-up rate, and we are determined to seek justice for pensioners.

I welcome my hon. and learned Friend’s comments, especially on behalf of the HH Robertson’s pensioners in my constituency, whose scheme, which is covered by the rules, failed in 1996. Many people have now received payments from the scheme, and there have been many letters of thanks. I pay credit to the staff who have dealt with the complicated casework. Will he ensure that complex cases such as bridging pensions are dealt with as a priority before moving on to the kind of detail suggested by the hon. Member for Dunfermline and West Fife (Willie Rennie), because such pensioners deserve support now?

We are trying to get as much support as possible to pensioners, and I have made changes to the rules in the past month—for example, agreeing that trustees will be able to make payments directly rather than having to go to the financial assistance scheme first. The FAS has now paid out just under £9.1 million to 2,560 qualifying members. A further 868 members will be paid as soon as they have confirmed their personal details, and an additional 814 members have been assessed as eligible for FAS payments when they reach 65.

The Conservative party promised last week to refloat the lifeboat and ensure that pensioners receive a payment within three months of a Conservative Government taking office. Does the Minister recognise that the British people feel cheated of the opportunity to vote for an incoming Government who could bring justice to pensioners rather than the injustice that they have suffered under Labour?

Tory fantasy finances will not help those pensioners. Last week, the Conservatives tried to refloat a lifeboat proposal that sank last July following Andrew Young’s report. It was sunk not by the Government, but simply by the fact that the cost of increasing the fund to PPF levels, as proposed by the Tories, is £2.7 billion in cash terms over 50 years. The Tories have not shown how they can provide that money, and fantasy finances will help no one. There are two realistic ways of providing finances: one is better use of assets in the failed schemes; the other is through the taxpayer. We are awaiting further information from Andrew Young on how we can better use those assets, and we have indicated that we will provide Government funding. That is the realistic way of getting justice for pensioners. The proposals that the Tories have made will achieve nothing: they are pure fantasy.

Why does the Minister show passion only when he says no to pension victims? Why cannot he have the courage of his convictions and follow what the Conservative party pledged to do if it won the election, but which the Prime Minister bottled out of—get the first payments to victims from a proper lifeboat fund within three months, by 1 February? Why cannot he do the same?

The Conservative party made a proposal that simply does not float. The Government Actuary clearly set out why it is not credible to try to manufacture such funding from something vaguely called unclaimed assets. The Government have offered taxpayers’ money and a realistic proposal to bring together the assets of failed pension schemes better to ensure that they can provide for those who need justice. The Tories proposed nothing realistic; it was pure fantasy. This Government are determined to do justice to pensioners, and to do it properly.