Pensions Reform

I understand what the hon. Gentleman is saying. Hindsight is a wonderful thing. I remember a report at the time that said that the stock market would go on rising and that there was no need to worry. That proved to be plainly wrong. We should be a lot wiser in this day and age. It is important to recognise that, in the context of big, global forces, the lives of ordinary men and women are being affected. My hon. Friend the Member for Cardiff, North (Julie Morgan), who is not in her place, secured an Adjournment debate in Westminster Hall earlier this month about the financial assistance scheme, and made vivid points about workers in her constituency. My hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) has also made such points, as has the hon. Member for Hemel Hempstead. I am not as eloquent as those hon. Members, but I echo their points on this issue. Far too many of my constituents have been caught up in these large forces as the risk of providing for retirement is being moved away from employers towards employees. Those men—in my constituency, they are predominantly men—did everything that was expected of them. They are decent, ordinary, hard-working, working-class men. They wanted to provide a secure and enjoyable retirement for themselves and their wives and families. They did not want to be a burden on the state. They paid into a pension scheme, often for decades, because they had an implicit understanding with their company that a definite level of payment would be provided for them when they retired. Now, because companies are trying to shift the risk, as I keep mentioning, those people are being left with nothing—often months before retiring. That is surely not fair. I have a number of constituents who are part of the Roxby pension scheme. The scheme is in the process of being wound up, but because that is taking some time and it is still classed as operational—it started to be wound up in 2003—the Roxby pensioners are not eligible for Pension Protection Fund money. I understand that they may be entitled to financial assistance scheme money, but have not heard anything yet. This issue is taking some time to resolve, causing stress, anxiety and uncertainty to my constituents and their families. Like my hon. Friend the Member for West Bromwich, West (Mr. Bailey), I urge the Government to consider streamlining the processes to provide a swift judgment for those pensioners and others. The plight of those people is exemplified by Mr. Robson, a constituent of mine. After paying into the Roxby scheme for decades, he would have been entitled to about £14,000 a year at the normal retirement age. We are not talking about footballers’ salaries. Now, he is forecast to get nothing, and, given his age, he is not really in a position to do anything about it. Although the financial assistance scheme is a good idea, it fails to take account of length of service and concentrates instead on the length of time before retirement. If the likes of Mr. Robson have paid into a pension scheme for some 30 years, surely there is a moral, if not legal, obligation for commitments to be honoured by firms. Mr. Hughes came to see me in my constituency surgery only last Friday. He has worked at Carpets International for many years, but the firm is now being wound up. He was told in 2002 that his fund was worth £67,000 and that he would be entitled to a pension of about £8,000 a year. Now, some four years later, that fund is worth £18,000, which has to last him a full retirement. He has an estimated 10 years of his working life in which to sort that out. I know that the financial assistance scheme will, I hope, help people such as Mr. Hughes, but there is a strong case for providing even more help for people such as Mr. Robson and Mr. Hughes, who have done everything right, yet find on the eve of their retirement that all their plans have been destroyed. I just want to mention one final pension scheme. Expanded Metals, or Expamet, is a staple firm—I hope that hon. Members will forgive the pun—of my constituency. However, the pension scheme is in the process of being wound up because the firm cannot meet its liabilities. Expamet is still trading, so the workers and former workers who are affected fall between two stools. I understand that the financial assistance scheme applies only when a firm has gone bust, while the Pension Protection Fund covers future victims. Will the Minister explain what can be done for people such as Paul Whitton, who has worked for Expamet for some 30 years, yet will now receive only 40 per cent. of his planned pension, and Mr. and Mrs. Edwards, who, together, were members of the scheme for 53 years, but are now contemplating a pension of £12,000 a year, rather than close to £30,000 a year, as was originally planned? I stress again that these people—my constituents—did everything right, but are being penalised for a combination of global factors that were outside their control. I understand that those forces are pushing firms to move risk away from themselves and towards individuals. I do not want to tip firms such as Expamet into liquidation, which would lead to the loss of valued jobs in my constituency. However, I urge Ministers and, indeed, the whole House to reach a consensus that people who have planned for their retirement in the correct manner, using occupational pension schemes, should have such commitments honoured as much as possible. As the White Paper rightly identifies, pension provision will become more problematic as the general population gets older and there is a greater squeeze on the working population. I have tried to acknowledge in my contribution that these forces are great and cannot be reversed with any great ease. However, I still think that both firms and the Government, to some extent, have a moral, if not legal, duty to people who did what they should and planned for retirement properly.