Financial Assistance Scheme (Modifications and Miscellaneous Amendments) Regulations 2005

My Lords, I am grateful to both the noble Lords, Lord Skelmersdale and Lord Oakeshott, for their comments. Although they made some criticisms of the Government’s handling of this measure, I am grateful for their general support for the regulations. I start by dealing with the issue of errors and, again, I apologise to the House. It is most unfortunate. Noble Lords will know that, when I was chair of the Merits of Statutory Instruments Committee, I took a particular interest in the proper production of statutory instruments and the ability of this House properly to scrutinise them. I do not depart from that, and it is a matter of great disappointment to me that I have to come before your Lordships’ House to apologise for an error that has occurred. I can assure noble Lords that I will do everything in my power to ensure that this does not happen again and we will try to put it right as soon as possible. I turn to the specific comment of the noble Lord, Lord Oakeshott, and the Merits of Statutory Instruments Committee about the pace and timing of the various statutory instruments that have to be brought forward. Much of that reflects the need to get this new FAS system up and running as quickly as possible. Inevitably some problems have arisen in the timing of the regulations and some of the changes that have had to be made because of the need for speed. In answer to the noble Lord, Lord Skelmersdale, I am advised that the FAS unit intends to make payments by the end of the year. I take that to be the calendar year and will stand by that. If I can give the noble Lord any more details, I will write to him, but clearly it is very important to get payments out as soon as possible. We debated the issue of running costs in July. The figure is the same as I gave then—that is, £16 million—and at present there is no change to that estimate. Obviously, in the light of experience, we will have to look at the matter again but that is the figure that I have. We shall be employing about 60 people in the York office of the FAS. IT has had to be produced and I want the administration of the scheme to be as efficient as possible. I am sure that we are working towards that. None the less, the scheme will cost money and we must accept that. I do not know whether I should respond to the general points raised by the noble Lords, Lord Oakeshott and Lord Skelmersdale. I think that the matter has been debated and, in the end, Parliament has reached the decision that this is the route down which we should go. Inevitably, hard decisions have had to be made in setting up the assistance scheme—I do not think that anyone would disagree with that. Any government in our position would have to make similar decisions, although there may be disagreement about the approach taken. No one can be in any doubt whatever about the personal consequences for individual pension scheme members when their pension schemes go down. We discussed that in a debate last week and one can only have extraordinary sympathy for anyone affected in that way. The £400 million is the amount of money that we have set aside. I believe I said in July that that will be reviewed in the next spending round cycle, and we will then know more about the number of schemes that the FAS has accepted and the number of scheme members involved. At the moment, we envisage that up to 15,000 members who are within three years of the scheme’s normal retirement age will benefit from the FAS topping up their pensions. I say to the noble Lord that it is early days. The period during which applications have to be made ends on 20 February and we will know much more after that date. When that date is reached and we have more up-to-date estimates, I shall of course be very happy to write to both noble Lords.