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Budget Resolutions and Economic Situation

That was the justification that the Chancellor used at the time for the abolition of tax credits on pension funds. However, with the benefit of hindsight, actuaries calculate that the cost to pension funds has been something like £100 billion since then. Clearly, some occupational funds have been severely affected. The hon. Gentleman raised the point about the financial assistance scheme. He welcomed what was said. The issue is important for Members on both sides of the House. I have former workers of Dexion who have been left without their occupational pensions. There has been widespread concern about the plight of those people as a consequence of their occupational pensions no longer being available to them. A lot of us have worked, campaigned and raised the profile of this issue. A lot of us have worked with Ros Altmann, a former Treasury adviser who has won the respect of pensioners and MPs on both sides of the House. I spoke to her last night about her assessment of the announcement of £8 billion extra for the financial assistance scheme. She pointed out that there was no new money identified in the Red Book for that. It is going to be paid for a long time in the future. No additional funds have been allocated to it within the Department for Work and Pensions budget. There is a reference to getting 80 per cent. of the core pension. A core pension is a concept that has been created by the Government. Essentially, we are talking about only 60 per cent. of the expected pension. The FAS pays out only from the age of 65, whereas many people were looking to retire at 60, and would like to be able to do that. There is no inflation linking. All FAS payments will be taxed, although to some extent perhaps the tax changes announced yesterday will be of some assistance. There is no tax-free lump sum. Widows lose out significantly. On the basis of Ros Altmann’s comments—we should at least respect what she has to say—it seems that what the Government have done has not been quite as generous as it first appeared. Indeed, the word used by Ros Altmann was ““spin””.