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Occupational Pensions

In truth, it ought not to be me speaking in this debate, but my constituent Brian Wilson, who is one of the pensioners who had their pensions stolen. He has turned out to be an incredibly valuable source of knowledge to me. I suspect that virtually all hon. Members have someone like Brian Wilson in their patch. If they do not, they should count themselves lucky to have missed out on the problem, but they are also missing out on an education as to where we went wrong. It is puzzling to understand why we should still need to hold such debates, because if we had followed a principle of ““three strikes and you’re out””, the Government would already be out. The comprehensive and damning report from the parliamentary ombudsman sets out why the Government are responsible—not for the collapse of schemes, but for failing to set a rules framework for the schemes that made secure what the Government promised was secure. A report from the Public Administration Committee pretty much endorsed that conclusion, and it endorsed the call for the Government to intervene to set the matter fully, not partly, right. On the deliberations held in the High Court, only this week, in the case brought by the pensioners, the Government received an almighty rollicking from the High Court judge for failing to produce an outline of their defence until what was almost literally the last minute. They finally did so on Monday night. The words of rebuke uttered by the High Court judge on Tuesday morning, and the grovelling presentation made by Government legal representatives, demonstrated how poor a position the Government are in. When successive independent verdicts ultimately trace the line of responsibility back to the Government, the Government cannot say, ““We just don’t care about those independent judgments; we won’t accept responsibility for redressing the balance, whatever form that balance takes.”” It is with sadness that I approach our debate, because ultimately the courts will require the Government to accept the responsibilities set out by the ombudsman. As a result, those pensioners will be failed not just by the Government but by Parliament, which will be failing in its duty of scrutiny if it does not tell the Government of the day that they must accept responsibility, and if it does not introduce measures to provide full redress. I am pleased that it has been established that the matter does not rest solely on the Government’s shoulders. In fact, it stems from the provisions put in place after the Pensions Act 1995, and the guarantees made by the Conservative Government that were endorsed when Labour came to power in 1997. It cannot be argued, however, that the Government fail to understand the nature of weaknesses and deficiencies that were built into the scheme that they put in place. After Maxwell, the actuaries advising the Government expressed doubts on several occasions about the weaknesses of the pension guarantee. The executive summary of the review of the minimum funding requirement published in May 2000 stated:"““there is a large and worrying gap between the level of security which the MFR test actually delivers and the public’s perception of what it will deliver””." The report went on to say:"““We recommend that, in addition to the MFR test, there should be a security measure which is clearly disclosed to members…Members would be informed that the MFR test differs from a true security test and does not give 100 per cent. security, as they currently believe.””" Much of the confusion that has emerged in debates is rooted in that belief. People who argue that the Government are responsible have never claimed that they were responsible for the failures of the schemes. However, the Government failed to put in place an adequate rules base for the functioning of the schemes; they failed to disclose to members the rules that would give preference to existing pensioners, rather than non-pensioner contributors; and they failed to disclose that the guarantee was not 100 per cent., or that members would probably reclaim only 50 per cent. of their funds. There is no point quibbling about people’s distrust of the Government, and people’s wish to check information elsewhere, because in the post-Maxwell climate, Government assurances had enormous importance. We failed the Ronseal test—the notion that the product does what it says on the tin—because we told people that their pension was secure when we knew, because the actuaries told us so, that that was not the case.