Pensions Bill

I am delighted to stand shoulder to shoulder with the Conservatives on this amendment, and I am equally delighted to see them show as much vigour on behalf of some of the poorest and most destitute people in our society as they showed on the previous amendment for a rather richer group. This has been a shameful story. The noble Lord, Lord Skelmersdale, identified very well some of the financial aspects of this problem, and I shall return to them; but there is also an issue of principle about democracy and how the Government have brushed aside repeated rulings from independent bodies and requests to think again. We have had a ruling from the European Court of Justice, a very serious and well argued ruling from the High Court, a thorough,well argued and comprehensive report from the ombudsman and a report, which went into considerable detail, from the Public Administration Committee of the House of Commons. Those bodies are four important pillars of democratic society in our country and in the European Union, of which we form part, and in each case the Government’s attitude has been simply disgraceful. They have not accepted that anyone apart from them can rule on these issues, particularly when we are talking about a charge of maladministration. No one is suggesting that the Government are wholly responsible for these problems—far from it. However, it is arrogance of the highest order to suggest that they have no responsibility and that their view should prevail—almost saying that the ombudsman, in particular, has no standing—including the things that have come out recently about the defence that the Government are trying to put in the High Court against the ombudsman’s case. That is where this Chamber of Parliament comes in. There is a wider issue: when the Government ignore these reports and rulings, we can say that they should and must think again. The issue is wider than the injustice and real hardship that these 125,000 pensioners have faced. The Government have been forced kicking and screaming to improve, slowly, this miserable little scheme. During the passage of the previous Pensions Bill, we repeatedly pressed them to explain how the scheme was going to work, but we were given nothing. These Benches repeatedly suggested that it would be better to combine the scheme with the Pension Protection Fund, and the history of delay and incompetence in beginning to pay people because of having to set up a completely separate organisation has vindicated us. So far, about £3.6 million has been paid out to 1,200 people, an average of £28.80 for each of the 125,000 people who have lost their pensions; that is simply pathetic. Even today, at Prime Minister’s Questions, we had the slippery—that is probably the fairest way of putting it—pretence that people under the present arrangements will get 80 per cent of their ““core pension””, the specious phrase that the Government have invented. I was asked on television at lunchtime why we were so worried about the difference between the 80 per cent of pension that people will get under the FAS and the 90 per cent they will get under the Pension Protection Fund. We are worried because the difference is much greater than that. Under the FAS, people will not get 80 per cent of their genuine expected pension; there is no inflation-linking; the scheme starts from the age of 65, whatever the scheme pension age was; there is no tax-free lump sum; there is no ill-health benefit; and widows’ benefits are far worse. If separate proof is wanted about how much worse the FAS is than the Pension Protection Fund, even under the present arrangement the estimate of the net present cost of giving PPF benefit as opposed to FAS benefit is £2.5 billion as against £1.9 billion. The FAS benefits are something like one-third less, so the figure of 80 per cent that the Government are bandying about is deeply dishonest. We never would have got even this far in improving the financial assistance scheme had it not been for a roll of honour of campaigners for justice for these people, led by the indefatigable Dr Ros Altmann and the Pensions Action Group. The media have also been exceptionally effective. I pick out in particular Liam Halligan of Channel 4 and the Sunday Telegraph and Patience Wheatcroft of the Sunday Telegraph. There is no doubt that public pressure has played a great part in getting the Government to move even this far. The key point for Liberal Democrats is thatthe PPF benefits should be guaranteed and the pensioners who have suffered for so long should know that they are going to get them. We talked in our manifesto at the 2005 election of more than 60,000 workers who were affected; that shows how little information there was and how much the figure has increased. We said then: "““We will bolster the Government’s compensation scheme””—" meaning the PPF, as it then was— "““to make sure that these workers are compensated at the same level available under the new Pension Protection Fund””." We were prepared to make a manifesto commitment; that has been our position all along. We would have preferred a straight commitment of that type—we believe that it is affordable. Obviously, we have to co-operate to achieve justice for the 125,000 people. On the basis that the amendments which were very nearly passed, with cross-party support, in the Commons are the only ones that will command support on the Conservative Benches and our own, we are supporting them. We very much hope that they will be agreed to today by a thumping majority which will make the Government think again—long, hard and often, if necessary. The High Court, the European Court of Justice, the ombudsman and the Public Administration Committee have stripped away, one by one, the Government’s threadbare defences against a chargeof maladministration. Now Britain’s new Prime Minister—Gordon Brown has been behind this all along—has no more clothes left with which to hide his meanness to these pensioners.