HL Deb 19 March 1998 vol 587 cc818-20

3.32 p.m.

Baroness Castle of Blackburn asked Her Majesty's Government:

What steps they are taking to accelerate the programme of compensation to victims of the mis-selling of personal pensions, and to prevent any mis-selling of the proposed stakeholder pension.

Lord McIntosh of Haringey

My Lords, the Financial Services Authority is taking action to ensure that everyone who has been mis-sold a personal pension since the Financial Services Act came into force will have access to a review which will determine whether they have suffered a redressable loss.

Last week my honourable friend the Economic Secretary answered a question in another place giving data on the progress made by the 41 firms with most cases to review. The figures show that some 65 per cent. of all priority cases have now been dealt with.

The Economic Secretary also gave her support to the FSA's approach to dealing with the remaining cases, which are grouped into Phase 2 of this exercise. All cases must be fairly and quickly dealt with.

Baroness Castle of Blackburn

I congratulate the Government on the efficiency and energy with which the Economic Secretary has pursued this matter. Does the Minister agree with me that it is very alarming to read the situation in Phase 2 which is outlined in the Financial Services Authority's recent statement? That shows that something like 1.8 million smaller investors may have suffered detriment to the tune of some £6.5 billion. Therefore would he not agree that that scandalous situation shows that the profit-making private pension insurance companies are not to be trusted to provide the same security in retirement as the state insurance schemes? What steps are the Government taking to prevent the proposed stakeholder pension falling into their hands?

Lord McIntosh of Haringey

My Lords, the Economic Secretary will be very grateful for my noble friend's first remarks. As regards the second phase, my noble friend quotes the figures quite correctly. Of course, the second phase is not concerned with smaller investors but with younger investors—those who have more than 15 years to go before retirement. Priority was rightly given to those closer to retirement in Phase 1 of the investigation.

As regards avoiding that problem in the future, my noble friend's remarks will of course be taken into account. We are determined that the stakeholder pension should not suffer from the same mis-selling problem.

Lord Mackay of Ardbrecknish

My Lords, does the Minister realise that I very much agree with him on the question of mis-selling? I hope it will be put right because it has greatly damaged the legitimate private personal pension interests which many people in this country will need to have if they are to have pension provision in their old age. Does the Minister recall that I had exactly the same problem when I had to put through the Pensions Act because of the behaviour of Mr. Robert Maxwell, who was, I think, an ex-colleague of the noble Baroness, Lady Castle?

Does the Minister, like me, find it rather odd that the Economic Secretary should be the person who is throwing stones on the issue of mis-selling private pensions when she had such a close relationship with Mr. Robert Maxwell in her previous existence?

Lord McIntosh of Haringey

My Lords, the noble Lord has managed to make two "McCarthyite" accusations of guilt by association in the course of one short question. I congratulate him.

Earl Russell

My Lords, in considering measures to prevent that happening again, will the Government look again at the proposals of the Goode Report? Will they ensure also that trustees of occupational pension schemes representing the employees and pensioners cannot in future be removed by the employer?

Lord McIntosh of Haringey

My Lords, of course those matters will be considered in the very comprehensive review of pension provision which will start this summer. But the issue of trustees is somewhat removed from the original Question.

Baroness Castle of Blackburn

Is the Minister aware that I never had a close association with Robert Maxwell, and perhaps not as close an association as some Members opposite have had with other tycoons?

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