Financial Assistance Scheme (Miscellaneous Provisions) Regulations 2008

I thank the Minister for his introduction of these regulations. I welcome the order as an important step in a five-year battle by 125,000 of the earliest victims of the Prime Minister’s economic incompetence to get as much as possible of the pensions they were due. Let me remind the Committee that during that time some died, others had to work beyond normal retirement age, sometimes with serious medical conditions, and all faced the prospect of penury. I would not usually rehearse the history of this unhappy matter, but the circumstances surrounding it are exceptional. The measures in the regulations could have happened much earlier if the Government had not chosen to reject out of hand the Conservatives’ lifeboat fund amendments to the Pensions Act 2007, which your Lordships supported. Those amendments could have raised the compensation by the FAS to the 90 per cent offered by the Pensions Protection Fund. The treasury would have immediately made a loan to ensure that higher payments could be distributed as soon as possible. That loan would then have been paid back fully out of unclaimed assets, ensuring no cost to taxpayers. What happened instead was the Government’s hurried announcement that unclaimed assets should be spent on youth centres, and that our policy was an unfunded spending commitment. The Lords amendment was duly rejected by another place on the grounds of financial privilege, and we in this House could not push the issue further. It has taken nearly a year to happen, but once again the Government have adopted a Conservative policy to repair the disastrous consequences of Labour financial mismanagement. It has taken constant pressure from my party, and even more from dedicated lobby groups, before the Government have finally realised the scale of the problem. They have still not accepted their own part in its creation. The Prime Minister’s tax rise on pension funds, the department’s misleading leaflets, the Government’s refusal to accept the independent ombudsman’s report—they have denied it all, delaying and quibbling over every solution that has eventually been forced on them. They have had to accept that they grossly underestimated the number of people affected by the crisis that they have created. They had to commit to funding the FAS properly, and now, finally, they admit that everyone else was right all along and that they must compensate these pensioners adequately. It is imperative that there are no more delays. Prior to last year’s election that never was, my party promised that, if we won, we would ensure within three months of taking office that payments reached those who were waiting. Will the Minister give us a clear idea of when the Government will implement this U-turn and when the pensioners will finally get what is due to them? During the consultation on the regulations, questions were asked as to whether the Government would continue to hold the view that the FAS payments relate only to periods after the date on which the FAS was first announced. Although it has previously been made clear that enhanced payments would be made only for the period from 14 May 2004, the consultation document disclosed that the Government would continue to consider this point. Will the Minister expand on the department’s current thinking? A number of respondents were also concerned about the implications of maintaining the existing definition of the normal retirement age in the draft regulations. It is possible that doing so will enable the enhanced payments to be delivered more quickly, easing the administrative burden. However, does the department have plans to alter the definition of the normal retirement age? If so, will the Minister elaborate on the process? It is also worth taking a moment to consider the wider pensions picture. Although today’s measures repair the damage caused to individual families, the lasting impact of this sorry story on confidence in the pensions system still remains unknown. Years of headlines detailing pensioners battling with the Government to receive compensation will undoubtedly have influence on a younger generation’s investment habits. I fear that the consequences of the Government’s resistance to compensate these victims of the pensions crisis are far from over. It is therefore essential that we rebuild confidence in our pensions system and restore the prospect of security in retirement to millions of people. Finally, I once more pay my respects to all the campaigners who have spent their time and money trying to get this Government to write their pension wrongs. For most, there will be few victory celebrations, but there will at least be the welcome satisfaction of at last receiving the compensation that they deserve.