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Occupational Pension Schemes (Levy Ceiling) Order 2010

My Lords, these are pretty standard uprating orders but they give us an opportunity to discuss a consequence of Labour’s great recession that is often overlooked. When a company goes into insolvency, an employee does not just lose his job and his salary; he is also in danger of losing his pension entitlement. A record number of companies went into insolvency during the recession that we have just barely come out of—over 3,000 more than went bust in the previous recession in the 1990s. It is no surprise that the Pension Protection Fund website shows a record number of pension schemes seeking compensation. The list of transferred schemes is pretty bad, with a rise from 12 schemes in 2007 to 53 in 2008 and 41 in 2009, and, as the Minister informed us, the number of schemes still in the assessment period is much higher. Ensuring that the Pension Protection Fund stays sufficiently funded to meet its commitments to these schemes is critical. I hope that the short-term cash flow problems that the recession caused are now over. However, the board of the fund has decided to amend its insolvency probabilities in order to take into account the effect of the economic climate on companies. The board notes that even companies regarded as low-risk have seen increased levels of failure, and previously healthy companies that survived the recession will now face the greatest increase in levies. These changes will not be implemented until the financial year 2011-12. Therefore, it is clear that the effect of Labour’s mismanagement of the economy will continue to be felt throughout the UK for many years to come. However, the biggest elephant in the room whenever the health of the Pension Protection Fund is discussed continues to be the Royal Mail pension fund. We are fast approaching the date by which the revaluation of the scheme will have to be announced. Since the Prime Minister bottled the Postal Services Bill, postal workers across the country have been left in limbo, knowing that their scheme is running an unsustainable deficit that the Pension Protection Fund cannot possibly afford to compensate. The current problems that the PPF is facing as a consequence of the recession will be as nothing compared with the demands that will be placed on it if that scheme is forced into insolvency. I hope that the Minister will be able to reassure us that his department has not just brushed that problem under the carpet until the election. Remaining in denial until May in the full knowledge that every delay to the necessary reforms will only make it harder in the long run would be deeply irresponsible. Are discussions with the Royal Mail pension plan ongoing, and are the Government still committed to implementing the Hooper review, with its plan for saving the pension fund, in full?