Skip to main content

Financial Assistance Scheme

Volume 495: debated on Monday 29 June 2009

3. When she next expects to meet occupational pensioner groups to discuss the operation of the financial assistance scheme. (282348)

I am glad to hear that. Is the Minister aware that I represent a number of constituents who were members of the Albert Fisher pension scheme, which unfortunately failed? They all qualify for assistance under the financial assistance scheme and were originally promised that they would receive about 90 per cent. compensation, but they have now discovered that they will receive much less than that. The fine print shows that many will receive less than 60 per cent. Why have my constituents had their hopes raised only to see them dashed in such a cruel way?

I am happy to have more detailed discussions with the hon. Gentleman about the particulars of the pension scheme that he mentioned, but through the financial assistance scheme we have provided 90 per cent. assistance, subject to a cap of £26,000. That is what the scheme is designed to deliver, and it will do so.

Nothing is more frightening to people than paying into a pension scheme for many years only to find that it does not produce the benefits that they were expecting, so will my hon. Friend join me in congratulating the 53 members of staff in York who run the FAS, which has rescued 834 pension schemes and has some 12,000 pensioners in payment? Does she also agree that when the state provides a safety net it is important that that safety net is not so gold-plated that it creates perverse incentives for employers to close down schemes, and that it is extremely important, too, that the state safety nets that this Labour Government have introduced are maintained?

Order. It is also extremely important that the reply should be a little bit briefer than the question.

I shall see what I can do, Mr. Speaker.

Currently, 12,031 people are being helped by the FAS, which has paid out £55 million gross so far. It was never intended to replace benefits completely if schemes begin to be wound up without being fully funded, but it does provide 90 per cent. assistance subject to a cap of £26,000.

May I congratulate the Minister and the Secretary of State on their new appointments? Does the Minister not accept that the FAS pensioners feel like the poor relations because they are told there is not the money to give them full compensation, when there was money, for example, when building societies were bailed out to put 100 per cent. of the shortfall of those pension funds in at the time? So this is clearly a matter of priorities. Does she also accept that this 90 per cent. figure that she uses is highly misleading—I am sure not deliberately so—because it is not just capped, but there are big issues about the inflation protection? Does she accept that many pensioners will get much less than 90 per cent., and that over the years they will see annual falls in their real pensions? Will she look at those cases again?

Without this Labour Government’s having introduced the FAS, there would have been no help whatever. Clearly, there is indexation at 2.5 per cent. for post-1997 accruals. We have also extended early access for those with ill health who have had to retire within five years of retirement age, and for those with a progressive disease we have introduced early access which is unreduced. This is more than we promised to do when the FAS was created. I am happy to keep looking at this, but I think the hon. Gentleman ought to acknowledge that we are providing great assistance where there was none before.