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Occupational Pensions

I congratulate the hon. Member for Cannock Chase (Dr. Wright) both on a compelling speech in support of his Select Committee’s report and on chairing what must have been a difficult report to produce, as it has some uncomfortable recommendations for the Government. I also congratulate the Committee on not simply rubber-stamping the findings of the ombudsman, but going round the course again and satisfying itself about the integrity of her arguments. Many Members want to speak in the debate, so I shall intervene only briefly. I do so for three reasons. First, like other Members, I have constituents who have been hit by the failure of their occupational scheme. Secondly, I believe the matter raises constitutional issues, which were touched on by the hon. Member for Cannock Chase at the end of his speech. Thirdly—perhaps uniquely, in relation to this debate—when I was Secretary of State for Transport, my Department had a similar run-in with the ombudsman, which was satisfactorily concluded and might offer a model for a way out of the impasse in which we find ourselves. Like everyone else, I have constituents who have lost money in occupational schemes, and who are hoping for justice from the ombudsman’s findings. Former employees of Croydex, a manufacturer of bathroom accessories in Andover, are now members of the Lionheart pension scheme. In 2000, the scheme was funded 98 per cent. on a minimum funding requirement basis, but by the end of 2001 the amount was only 87 per cent. and the company stopped making contributions. Following some complex legal arguments, the trustees had to accept a final settlement that left the scheme with a deficit of £8 million. If they had not agreed, they would have been even worse-off, as the company, which had negative net assets, would have gone into receivership. None of the approximately 600 deferred members of the Lionheart scheme will receive any assistance from the financial assistance scheme, because Croydex continues to trade. None of them will receive any assistance from the Pension Protection Fund because the scheme entered wind-up before April 2005. Most will receive only 10 to 20 per cent. of their pension. One employee who had worked for the company since 1958 found out two years before his retirement that he would lose 90 per cent. of his pension. He will receive no assistance whatsoever. My constituent, Mr. Hawkes, has campaigned tirelessly on behalf of these constituents and, along with others, he is understandably bitter about the recent letter that I and others received from the Secretary of State that made it clear that he may seek the costs of judicial review from the pensioners. Mr. Hawkes’s confidence in the democratic process, and that of others who have read the Select Committee’s report, will depend on how the issue is resolved.