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Pensions Bill

It was the Young report, not the Government, that torpedoed the lifeboat, but it was pretty leaky anyway. Rafts were mentioned in various analogies, and the lifeboat was a cobbled-together raft that sank of its own volition. We warned the Opposition that it would sink, and it did. Let us move on and see how, realistically, we can help the pensioners involved, because that is the important thing. The hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) asks, reasonably, why the funding will not be to the PPF level. The answer is that the PPF is essentially an insurance scheme and people make contributions to it, as a result of which they are entitled to payments from it. If we were to go to PPF levels, that would have to be funded. The hon. Gentleman has made it clear that the Liberal Democrats would be happy to put Government funding into that. That is a straightforward point of view, and I understand and respect it. However, the Conservatives have always said that they would not put loads of Government money into the scheme. They would not be prepared to spend an extra £1 billion. They are silent on that point, and as far as they are concerned, there would be no extra money. They claim that the funding would somehow be obtained from the unclaimed assets, but that has now been torpedoed. The various claims being made by the Opposition parties differ. I give the hon. Gentleman credit for saying straightforwardly that he would spend more taxpayers’ money. However, I think that we should be cautious about deciding to spend large amounts of Government money on ensuring that those who have not paid the insurance premiums into the pot, as the people in the PPF scheme have paid, should get the same benefits because the Government chipped in. We have to get the right balance between the rights of the pensioners and the rights of the taxpayers. By saying that they would not spend large amounts of taxpayers’ money, the Conservatives recognise that that balance needs to be struck, but they claim that they can magic the money from somewhere else. I do not accept that. The claim is made that a threat has somehow been made to withdraw the increase to 80 per cent. if the Bill goes into the spill-over period. That was the substance of a letter that Conservative Front Benchers sent out earlier today, but it is complete nonsense. It is true that I warned in the last debate that if the Bill was delayed into the spill-over period the increase from 60 per cent. to 80 per cent. in the cover under the financial assistance scheme would also be delayed, and pensioners would not get it over the summer—and I think that they deserve it. That is why I am pleased that the Opposition have agreed to the amendments and that the Bill can receive Royal Assent so that the increase to 80 per cent. can begin to be paid by the FAS operational unit. That will happen within days of Royal Assent, which I hope will occur shortly. The hon. Member for Eastbourne made several other points, which I shall address briefly. He mentioned that Lord Skelmersdale had drafted the amendment, but for the sake of clarity I suggest that he had a little help from his friends. As far as the Young report is concerned, the total assets are £1.7 billion. He asked what percentage was likely to be effective, and the answer is that almost all of that sum will be covered, as he suggested. As for the regulations and the timescale, I have already said that we would like to introduce the regulations as quickly as possible. We will happily show them to Opposition Front Benchers, but we want to put them into operation quickly. That means that we will not consult widely on them. I am happy to put a copy of the letter that I sent last week in the Library, and send one to Opposition Front Benchers. I apologise for not ensuring that that had been done before. The hon. Gentleman also asked whether seeking the consent of the Secretary of State was likely to be rare. From our point of view, it would be rare. It might happen if an otherwise fully funded scheme were close to being wound up, but found that it had a small gap. It would therefore not stand to benefit very much from the FAS, so the trustees might ask the Secretary of State whether they could annuitise in those circumstances. The Secretary of State would look at the facts and take a view. Such circumstances would be rare, which is why we do not want annuitisation to proceed for funds engaged with the FAS—and that would be the purpose of the amendments. The only other question that I was asked had to do with the nine-month period, and I can tell the House that we are looking at the nine months from September. We hope that Young will report in November, and we expect to be able to make some decisions fairly quickly thereafter. We do not yet know the full terms of the Young report, so we will have to wait and see what it contains, but we want to put various alternative courses of action before the House as quickly as possible. Details of any substitute scheme will be made known in regulations put in place before the nine months elapse. Finally, despite the bit of political knockabout that we had, I am grateful for the positive reaction of the hon. Member for Eastbourne to the amendments, and I hope that he will adopt a similar approach to the next group. Lords amendments agreed to. Lords amendment: No. 28.