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Occupational Pensions

I want to make some progress. That was predicted by David Simon, the chairman of BP, who wrote that abolishing dividend tax credits would"““reduce funds available for reinvestment?" and"““significantly jaundice… the attitudes of investors in UK projects?." If officials were saying that there would be no overall effect on investment and Ministers were warning of a negative impact, why were the public told that investment would go up? Why? [Interruption.] The Economic Secretary is peddling another claim that is simply not the case. Business investment as a proportion of GDP has been at a record low. Now, Mr. Speaker, we hear a lot of excuses from the Chancellor about his pensions tax. What we never hear is any expression of sympathy for the millions who have had their retirement funds raided. [Interruption.] Off go the boot boys. As I say, we never hear any expression of sympathy. In Budget after Budget, we hear nothing from the Chancellor about what we can do to restore confidence in pensions and nothing about how to help those who do the right thing. Unlike the Chancellor, we are listening to the pensions industry and we are working with British businesses on the tax and regulatory changes that are needed. However, there is something that we can do right now for the 125,000 people who have lost some or all of their pensions because their company went bust. I imagine that every MP has met some of those people in their constituency surgeries: their stories are heartbreaking, their dreams shattered with a lifetime of hard work and saving lost—and all through no fault of their own. We know that some of the fault lies with the Government. The parliamentary ombudsman made that clear in talking about ““maladministration?. The Labour chair of the Public Administration Committee agrees with that verdict. He says that the Government should stop quibbling over this and act to find an acceptable solution for the thousands affected. That is the opinion of the chair of the Public Administration Committee and I agree with him. I believe that all of us, Government and Opposition alike, have a duty to help those people. So far, frankly, the help has been inadequate. The Government’s financial assistance scheme has cost £9 million to administer, but has paid out just £3 million to date. Even by this Chancellor’s standards, that is pretty poor value for money. We need a new approach, an approach that meets our moral obligations to those victims—[Interruption.] Yes, the moral obligation that we all owe to those people. It is an approach that we need to adopt without placing a long-term additional burden on the public exchequer. My hon. Friend the shadow pensions Minister has, along with Government Members, tabled amendments to the Pensions Bill, which reports to the House tomorrow. The effect of those amendments would be to create a lifeboat fund for the 125,000 people under the management of the Pension Protection Fund. The lifeboat fund would start making payments immediately to top up pensions to PPF levels—90 per cent. of the total expected pension package. It would include the 6,000 people whose employers remain solvent, but whose pension scheme has gone bust. I agree with the hon. Member for Cardiff, North (Julie Morgan), who may be in the Chamber, although I cannot see her, that it is unjust to leave those unfortunate people facing financial ruin. How much would all this cost? According to the e-mail that the Secretary of State for Work and Pensions sent to the parliamentary Labour party and which we have a copy of, the net present value cost is £600 million. The annual cash requirement begins at around £30 million, rises to a peak of perhaps three times that in 20 years’ time and then falls to zero. To get the money flowing now, the Treasury should make a loan to the lifeboat fund. That is the precedent of what the Government did with Robert Maxwell. The Treasury should then recover the money, on behalf of the fund, from the hundreds of millions of pounds of unclaimed pension assets that the industry itself confirms exist. The amendments tomorrow command cross-party support and we will discover today whether they have the support of the Chancellor of the Exchequer. Perhaps he can tell us now. It is time for him to start making amends for the damage that he has done. The Chancellor has made many mistakes in his long time at the Treasury—mistakes that are now coming home to roost. But surely the Chancellor’s biggest mistake was his first: his £100 billion raid on the nation’s pensions. Why did he do it? As one of my hon. Friends says, we are told that the millions who work hard and save hard for their pension are not his kind of people. In his eyes, their greatest sin is that they want to be independent of the state. In our eyes, that is one of their greatest virtues. For 10 years, the Chancellor has twisted and turned and done everything possible to duck his responsibility and conceal the truth, but the great British pension theft was his crime. The Chancellor has raided the retirement hopes of millions and wrought desolation on the British pension system. We have no confidence in his management of pensions. We have no confidence that he has the answers for the future. Now it is time for him to stand up, face the music, and tell us all that he is sorry.