Views
Speech on the Pensions Bill
Danny Alexander: I was struck by the—probably uncharacteristic— partisan tone struck by the Minister in his opening remarks. There has been a lot of talk about building a pensions consensus during the debates on pensions that many of us have been involved in. During this debate, the House has to think about the cross-party interest of many hon. Members in ensuring that the 125,000 victims of the collapsed pensions, to which the right hon. Member for Birkenhead referred, have a fair and just settlement. We have an opportunity tonight to ensure that they do, and to ensure that the paralysis, quite rightly described by the right hon. Gentleman, stops and the nightmare for those 125,000 people is brought to an end. Let us ensure that those people are not presented with continuing injustice and a continuing struggle.
Let us not forget that what has brought the matter most vividly to the House's attention for a period of years was vigorous campaigning. We saw it again today, as many of the victims of collapsed occupational pensions were present in Parliament square, to lobby Members of this House about the justness and fairness of their cause. Let us not say to those people, "You have to keep struggling on." Let us back the amendments and make sure that those people have the fair and just settlement that they seek, and which they deserve. That settlement is embodied by the amendments, including amendment No. 24, which I shall come to shortly.
The background to the matter is well known. As the right hon. Gentleman said, many people have been affected during the period between the suggestion of such legislation and its coming into law. The Government's role in the whole sorry scheme has been criticised by several independent bodies, such as the European Court of Justice, the High Court, the pensions ombudsman and the Select Committee on Public Accounts. If a footballer had been shown four red cards in succession, the police would be called to get him off the pitch. The Government need to respond with more alacrity to those findings than they have displayed so far.
Jennifer Willott (Cardiff Central, Liberal Democrat): Does my hon. Friend share my surprise that, although the Government finally appear to have accepted some guilt for maladministration after the attempts by the four different bodies that he mentioned, they are still not putting right the financial injustice?
Danny Alexander: I am grateful to my hon. Friend for her intervention and pay tribute to her work in campaigning for her many constituents who have been affected by the problems. I share her surprise that, although the Minister appeared to offer a further small concession, albeit with few numbers attached, he was not willing to go the whole hog. I share the view of the hon. Member for Eastbourne (Mr. Waterson) that the Government will eventually be forced to do that. They have not done so yet, and that is gravely disappointing.
Although I acknowledge that the Government have made progress in expanding the FAS from its original limited basis to a slightly less limited basis—and, potentially, an even less limited basis—they seem to have been dragged kicking and screaming to that point. Any resultant positive feeling among the victims of the scandal has been dissipated by the Government's niggardly approach to making progress. There is genuine anger about that. I went to the demonstration in Parliament square today and saw many people wearing T-shirts, which claimed that the Chancellor of the Exchequer "stole my pension". That shows the extent to which the issue arouses genuine and justifiable anger.
The anger derives from the big difference between the PPF and the FAS. The Minister used the phrase "core pension". He has now invented a new phrase—"expected core pension". Others have drawn attention to the fact that the term "core pension" is misleading and appears to have been defined uniquely for the purposes of the debate to make it sound as if more is being offered to the people who are affected. All hon. Members should bear that in mind when they cast their votes.
John Butterfill (Bournemouth West, Conservative): The hon. Gentleman will also realise that the suggestion that a loan somehow reflects what happened in the Maxwell case is factually inaccurate. There was initially a Government loan, but nearly all the assets were subsequently recovered or squeezed out of the banks that had lent against them, so there was not a huge debt to be repaid at the end of the day.
Danny Alexander: I am grateful to the hon. Gentleman for that intervention. The amendments' point is to say, "Let's get on with it. Let's get the Government loan through the system to achieve the PPF level, not the more niggardly proposal." We can then ascertain the resources that can be released through the Young review process and other processes, and calculate how much of that money the Government can get back.
The Minister is dithering about the financial outcome for the affected pensioners while saying, "We must wait and see." There must be an end to the dithering. The House and the pensioners who suffered the injustice have waited a long time and consistently demanded PPF level benefits.
My party made it clear in our election manifesto that we believe that benefits should be paid at the PPF level. I previously referred to the figure that House of Lords written answers provided for the cost of that. At net present value, the cost would be £640 million in the first 10 years. That is £25 million a year and, as the Minister said, there is a curb. Perhaps I should not be, but I am prepared to take on trust the word of his colleague in the House of Lords for the correctness of those figures.
The difference between the PPF and the FAS is great. The 80 per cent. that is currently being offered amounts to only 60 per cent. when we consider expected pension, according to the pensions action group. That is because, unlike the PPF, the benefits paid out under the FAS have no index inflation linking. Other benefits, such as widows' benefits, are more limited under the FAS than they are under the PPF. Other dependants' benefits are non-existent. The FAS pays out at the age of 65, irrespective of the retirement age of the individual's scheme.
Even if the Minister goes up to 90 per cent. of his "expected core pension", it will amount to perhaps only 65 per cent. of actual expected pension—that is, two thirds of the sum to which people would have been entitled had their schemes not collapsed. Hon. Members should bear that in mind when they cast their votes this evening.
The core pension concept, which was invented for the purposes of the scheme, varies a great deal according to individual circumstances. I met one pensioner today who told me that his personal circumstances meant that his core pension amounted to 32 per cent. of his expected pension. There is a wide difference, which means that the Government's talk of 80 or 90 per cent. is simply not in keeping with many affected pensioners' individual circumstances.
The PPF method of delivering benefits gives a great deal more certainty and we should aim to achieve that.
Jennifer Willott (Cardiff Central, Liberal Democrat): Does my hon. Friend share my concern that my constituents who are affected are mainly people who worked in the former steelworks and were not on especially high incomes when they were employed? Their expected pension was not generous in the first place and getting two thirds of that can mean a small amount on which to live in retirement. That has implications for pensioner poverty.
Danny Alexander: I agree with my hon. Friend. Many of the 125,000 people whom we are discussing this evening are in the position that she describes. We are not considering pensioners who are expecting—as Cabinet Ministers might expect—large sums in retirement, but people who built up small amounts of pension. We should record our indebtedness to the pensions action group, and especially to Dr. Ros Altmann, for the way in which they assiduously brought such matters, including my hon. Friend's point, to the House's attention.
The Minister referred to the Young review. It is an interesting document, which rewards further detailed study—I am sure that all hon. Members have studied it. It includes much that should give aid and comfort to those who support the amendments. For example, it emphasises the importance of stopping the annuitisation of the assets that are left over in the collapsed pension schemes. That is precisely the outcome that amendment No. 22 would achieve. The Minister wants to wait until November, when I presume that we will have the next phase of the report. Who knows how much longer Government action will then take? It could be attached to another pensions Bill. The process could take some time. If, during that time, many of the assets are annuitised, the benefits that could accrue to the FAS will be lost. Even if the Minister rejects all the other amendments—I wish that he would not—amendment No. 22 is in his interests as much as those of everyone else who pursues the matter.
I fail to understand the basis of the Government's opposition to the proposals. Although the amount of money required to increase benefits to PPF level— £640 million at net present value—is significant, it is not a great deal of money in overall annual public expenditure terms. I cannot understand why Ministers are so unwilling to do the right thing by a group of pensioners who have been treated so unjustly.
Gordon Prentice (Pendle, Labour): The hon. Gentleman will agree that the Young review tells us that, of the £1.7 billion in assets that have been identified, £1.3 billion has not yet been committed to annuities. That is why we must act this evening.
Danny Alexander: The hon. Gentleman is right. "Action this day" must govern us. It is not enough to delay a little more and simply take the Government's word. The Select Committee gave cautious advice about the extent to which we should listen to the Government. We need to act now because, tomorrow, the amount that has been annuitised may be greater. The next day, it may be greater still. We need to act to ensure that that does not happen and that the maximum amount of resources is available to benefit those who have suffered so long because of the collapse of their occupational pension.
The Young review makes the point—perhaps it is a rebuttal to the Association of British Insurers, among others—that there are unclaimed assets potentially available in life insurance policies. However, the main point the review makes is that there is a need to create the lifeboat now. People need the guarantee of the benefits at PPF level. The Minister can have a review to ascertain the level of resources, but let us get the lifeboat going to give people outside the certainty that they require.
Amendment No. 24 is simple and makes it clear that PPF-level benefits should be delivered by regulation as a matter of right. The other amendments make it clear that the process of allocating resources should be gone through, but the uncertainty of the level of resources that might be delivered by the various programmes should not stop us voting for these amendments. There may be a small cost attached—the hon. Member for Wolverhampton, South-West (Rob Marris) has referred to it repeatedly, from a sedentary position and otherwise—but answers to parliamentary questions show that it is not great. Let us float that lifeboat now to give hope to all concerned.
The Minister presented his statement as an attempt to offer progress but it amounted to little more than more dithering and delay. Victims of this scandal cannot wait and, with the exception of those to whom the hon. Member for Eastbourne referred who have sadly passed away, will not go away. They will knock at our door every day they can. That is another reason why the House should act today. The amendments establish the lifeboat and start the search for the resources to fund it. That is the right order in which to do it. Let us not spend weeks, months or years reviewing the assets that might be available before we decide to float the lifeboat and give the guarantee of the appropriate level of benefits. Let us vote for the amendments tonight.
The Prime Minister has made clear his wish to present an ethical dimension to his Government's domestic policy. What better way to start than to ensure that the amendments are passed tonight and that the victims of collapsed occupational pensions in the FAS get the levels of benefits that they desire? The Prime Minister has also made it clear that he wishes to restore the role of Parliament. What better way could there be for the House to show that if the Government are not willing to provide that ethical dimension to their domestic policies, then it is? I hope that the House will support the amendments.
Read and comment on the full debate in the House of Commons
Posted on: 17/07/2007
