HC Deb 12 January 2004 vol 416 cc523-4
11. Angela Watkinson (Upminster) (Con)

What measures will be taken to address the problems surrounding the closure of final salary pension schemes. [146792]

14. Mr. James Clappison (Hertsmere) (Con)

What plans he has to protect the pensions of past and present members of final salary pension schemes. [146795]

The Minister for Pensions (Malcolm Wicks)

Improving protection for members of final salary pension schemes is a Government priority. Through new legislation and, in particular, the pension protection fund, we are taking action to ensure that a pension promise made is a pension promise honoured. The pension protection fund will be introduced in the forthcoming pensions Bill.

Angela Watkinson

I thank the Minister for that response. What specific hope can he give to my constituent, Mr. Clothier, a former employee of Bradstock? Bradstock's pension scheme was terminated by a commutation prior to insolvency and was extremely underfunded, and Mr. Clothier finds that the product of 19 years of contributions will barely cover his council tax.

Malcolm Wicks

Having met many workers in that kind of situation, I have a clear understanding of the heartbreak and impact on health and family life that can be occasioned by that kind of disaster for individuals. We had a full airing of this issue when my right hon. Friend the Secretary of State took not dissimilar questions on the matter, and I cannot add to what he said on that occasion. While there is an issue about the present, at least we now have a Government who, by legislating for a protection fund, will ensure that that kind of scandal never occurs again in Great Britain.

Mr. Clappison

May I take the Minister on to another aspect of final salary insolvencies and the future in such cases? Does he agree—perhaps he will do so in the light of the experience that he has just described—that one of the most distressing features of such insolvencies is that workers who have lost all their pension rights were in many cases very close to retirement age and had accumulated substantial pension rights? I know that the Government have been consulting on the question of the priority order in winding-ups. When will some action be taken on the matter?

Malcolm Wicks

We have been consulting on the important issue, which the hon. Gentleman brings to the House's attention, of the priority order. We think that the existing priority order is unfair, not least to that group of workers whom he mentioned, some of whom I have met, who are just about to approach retirement age and who lose out under the current scheme. That is why we will take action. When we have formulated proposals, we will bring them to the House.

Mr. Bill Tynan (Hamilton, South) (Lab)

While I welcome the pension protection fund, my hon. Friend the Minister has indicated that the Government are currently considering proposals. Will he bring those proposals to the Floor of the House as soon as possible, because the pension protection fund will do nothing for the individuals in my constituency who have lost their occupational pension scheme? Will he also accept that the Conservative party has selective amnesia when it talks about the—

Mr. Speaker

Order. The hon. Gentleman must not go into that.

Malcolm Wicks

Therefore, Mr. Speaker, I will try to forget the remarks that my hon. Friend has just made. As I said, our proposals on the priority order will come to the House. As we discussed earlier, however, in the questions to my right hon. Friend the Secretary of State, we are listening to all suggestions about how we can tackle immediate problems. It must be repeated again, however, that it would be wrong to offer false hope in what is a complex situation at which we are looking carefully.