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Pensions Bill

My Lords, financial privilege has been raised again. I dealt with the position in relation to that when we discussed the previous amendment; that is, the Lords accepts those judgments of the Commons and the reasons given. It is also not right to say that the use of financial privilege has stopped debate on this issue. What have we just been doing? It would be perfectly in order for someone to move an amendment in lieu of the amendment that came forward so long as it did not impair the financial privilege of the other place. There was the opportunity to do that. We have not been stifling debate on this issue. Our exchanges have been reflective of the strength of feeling on this issue expressed in both Houses during the passage of the Bill. The Government have always been sympathetic to those who have lost their pensions. Given this sympathy, we have always sought a satisfactory solution for those who suffered. We have had to balance this desire with the responsibility to ensure that any solution is fair on the taxpayer. The contributions of noble Lords and Members in the other place have helped us clarify where we might strike this balance. We have moved forward. An amendment introduced by the Government during Report stage in the other place will guarantee that all 125,000 people affected will receive at least 80 per cent of their expected core pension. Let me make it clear: I believe that we have always used that term. If I have not in my earlier presentation, I reiterate it now. It is to do with core pension, which I accept is not the same as what would otherwise have been a full pension entitlement. That is of course subject to the cap. Indeed, with immediate effect from Royal Assent to the Bill, hundreds of people will be eligible for increased initial payments while their scheme is in wind-up. During the other place’s consideration of amendments originally tabled in this House, my honourable friend the Minister of State for Pensions Reform gave a further commitment: we will use the assets that we expect to be identified in the Young review, together with a matched contribution from the Government, to raise the levels of assistance towards 90 per cent of expected core pensions. The noble Lord, Lord Skelmersdale, said that that was an uncosted commitment, and we chided the Opposition for their position, as that was not a fair analysis. Our pledge to match the extra value available from scheme funds as a consequence of the assets review is not an uncosted commitment. The Government will match funds to get to 90 per cent, up to a maximum, we estimate, of £225 million in net present value terms. The lifeboat amendment promised PPF-level benefits. That is a £640 million commitment without any real evidence for where that money might be found. We will be working with trustees in order to maximise the assets in their schemes to make a real, not a possible, difference to the assistance level for members. The noble Lords, Lord Skelmersdale and Lord Oakeshott, asked whether we accepted the recommendations of the Young review that we could do better out of the assets of those schemes. That comes from the interim work that he has done, although we will have to await the final report. He believes that by a variety of mechanisms we can do better, and the amendment we are coming to next will illustrate the Government’s support for the position he has taken. There are tangible commitments that will make a difference to the lives of thousands of those who have suffered. Both the noble Lord, Lord Skelmersdale, and the noble Lord, Lord Oakeshott, quoted the figure of 125,000 people. That is right, but it should be borne in mind that most of those have not reached pension age. To date, about 10,000 people have reached the age of 65 and are eligible. We are currently paying 1,367 people, 246 of them in annual payments and 1,111 in initial payments. A further 67 members will be paid once personal details are confirmed. Gross expenditure on payments to date is £5.28 million. One hundred and two schemes have completed notification, 867 schemes have completed qualification, 682 schemes have qualified and 288 schemes have provided data on their members that have been assessed. I am sure that this issue, like the other amendment we have just discussed, will not go away, but I hope in the circumstances that the House will accept the Motion I have put to it. On Question, Motion agreed to. 22: Insert the following new Clause- ““Purchase of annuities The Secretary of State shall, as soon as is reasonably practicable, by regulations require the trustees of qualifying schemes as defined by the Financial Assistance Scheme Regulations 2005 (S.I. 2005/1986) which have not yet completed winding-up to desist from purchasing (except where, on or before 18th April 2007, they have entered into a binding contractual commitment so to do) or making binding commitments to purchase annuities on behalf of scheme members, for a period of nine months from 18th April 2007.”” The Commons disagree to Lords Amendment No. 22 for the following Reason- 22A: Because the Commons consider that the prohibition on the purchase of annuities may have undesirable effects.