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Pensions Bill

I am grateful to the Minister for his concise introduction to the amendments. As you know, Mr. Deputy Speaker—this is probably about as much as I can say on the matter—the debate on many of the amendments that form the lifeboat fund has been ended by the invocation of the Parliament Acts. In short, I believe that the Government realised they were losing the arguments and decided to shut down the debate. That is a blatant affront, not only to this House but to the victims who have lost their pensions. This is probably our last opportunity to debate this Pensions Bill, although the joy of my job and the Minister’s is that another Pensions Bill is always just around the corner. Only recently, our new Prime Minister told the nation that he believed in"““restoring power to Parliament and rebuilding public trust in democracy.””" He said:"““I want to lead a Government humble enough to know its place—where I will always strive to be—and that is on the people’s side.””" He should tell that to the 125,000 people who were looking to the lifeboat fund for help. The big clunking fist has crashed down, and the Government have invoked the Parliament Acts and stopped any further discussion. They have, in effect, torpedoed the lifeboat. Even before the Government did that, however, there were dark threats from Government sources that if the lifeboat fund amendments did get through, they might abandon the whole Bill, leaving victims with even less money than they would have received under the Government’s latest proposals. I hope that the Minister will take the opportunity to dissociate himself from such threats. I can assure him that the campaign to get proper help to those victims will continue both inside and outside Parliament. If the Prime Minister thinks that he has heard the last of this issue, he is very much mistaken. The amendments on annuitisation are the remaining vestiges of the raft of lifeboat fund amendments. It is also perhaps worth reminding the House that that approach to bulk annuity purchase has been advocated by the Conservatives for at least a couple of years and by campaigners such as Ros Altmann for even longer. Can the Minister make an estimate of the pension fund assets that have already been committed to annuity purchase in the time scale and are therefore no longer available to provide direct help to the victims? The Minister touched on the recent report by Andrew Young and his team. It is worth quickly reviewing some of the major conclusions on this subject. On page 13, they concluded that there was some £1.7 billion of uncommitted assets in schemes eligible for FAS assistance that are in the process of winding up. What we do not know is where they are in that process at this precise moment. Andrew Young also concluded in chapter 4:"““The current process of annuitisation on a scheme by scheme basis is unlikely to offer the best use of residual scheme assets.””" I am delighted that that is now accepted by hon. Members on both sides of the House in considering what should happen next to those remaining pension assets. The latest amendments are a compromise. I am delighted to hear that the Minister is prepared to accept them. They were drafted by my colleague Lord Skelmersdale in the other place and they cover the issues of real concern to hon. Members on both sides of the House. The most important is amendment No. 22B, which places a temporary restriction on the purchase of annuities. It would fair to describe the others as consequential. The noble Lord McKenzie said:"““It strikes a pragmatic approach by putting a hold on annuitisation for the benefit of all members of qualifying pension schemes who hope to see the extra funds generated by the assets within their schemes matched by the Government, while allowing trustees to purchase annuities with the permission of the scheme manager where it would be appropriate to do so.””—[Official Report, House of Lords, 24 July 2007; Vol. 694, c. 711.]" I have some questions, which the Minister may be able to deal with today, with the leave of the House, or in correspondence. First, the Young report talks about total unallocated assets of £1.7 billion in pension funds within the FAS. What proportion of those assets is likely to be affected by the proposed regulations? Secondly, the Government have promised to publish regulations. I think that that was made clear by Lord McKenzie. Can the Minister give me an idea of the time scale during which he expects to be able to do so? Thirdly, the Minister told us that he has written to trustees. Is he prepared to put a copy of that letter in the Library and perhaps supply copies to Front-Bench spokesmen in this and the other House so that we can see exactly what he has said to them? May I also touch on the issue of those circumstances in which some trustees may wish to proceed with purchasing annuities in the usual way? That was dealt with by Lord Skelmersdale in the other place when he made the point that his principal amendment gives the FAS scheme manager—the Secretary of State—discretion to allow annuities to be purchased in"““some—I expect rare—instances. For example, that could be where a scheme is only lightly under-funded and therefore members are unlikely to benefit from the FAS overall.””—[Official Report, House of Lords, 24 July 2007; Vol. 694, c. 713.]" I must say in parentheses, however, that one wonders why they might be in that situation in the first place. Will the Minister confirm today or in writing that it is his understanding that the scheme manager—the Secretary of State—would permit such a purchase only in rare circumstances, and usually when there were merely small amounts of underfunding in a scheme? If that is not his understanding, will he tell us what circumstances he envisages triggering the purchase of annuities? My understanding of the Government position—I am happy to allow the Minister to intervene if I am overselling it—is that in almost every case they are now expecting trustees in schemes that are in the FAS not to bulk-purchase annuities for the foreseeable future, and that in the rare cases when they might want to purchase annuities they would almost certainly be almost totally funded and would seek the permission of the scheme manager. There is consensus between Ministers and Conservative Front Benchers that from this day forward the bulk purchase of annuities for FAS-based schemes will be rare, and that assets will be husbanded with a view not to buying annuities but to providing benefits directly to scheme members. On that basis, I commend the amendments—I call them the Skelmersdale amendments —as providing a sensible and practical resolution of an honourable and decent difference of opinion on how to approach the issue. I hope that they are workable, and I look forward to seeing the regulations in draft and I would be interested to know when they are likely to appear.