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17 July 2007 : Column 191

Ms Harman: I think it extremely important not just for us to do more to prevent women from falling into offending, but for women who are sent to prison to be better prepared for life outside it. The work of the St Giles trust in my constituency involves former women prisoners meeting women as they come out of the prison gates to help them ensure that their lives stay on track.

Mike Penning (Hemel Hempstead) (Con): At my constituency surgeries I regularly receive delegations from ethic minority groups, especially Kashmiri-Pakistani and Bangladeshi groups. They tell me that it is difficult for women to integrate and play a part in the community because they do not speak English, and that they are having terrible problems securing funding streams for the voluntary groups that are trying to help those women to speak English and become part of the community. Will the Minister tell us how that money can reach the front line? If she cannot do so today, will she meet a delegation from my community?

Ms Harman: My right hon. Friend the Secretary of State for Communities and Local Government will be examining those issues specifically. We need to ensure that women can work together to support other women in their local communities, and to support women taking up roles at work or in public life.

Mrs. Sharon Hodgson (Gateshead, East and Washington, West) (Lab): I thank my right hon. and learned Friend for highlighting the Swedish model, and that country’s treatment in law of prostitution. It criminalises the buyer, who is usually a man, rather than the seller, who is usually a woman, which is interesting in view of the fact that its Parliament is rather more representative than ours in terms of gender balance. I believe that the balance is almost 50:50, if not more. Does my right hon. and learned Friend see any correlation between those two facts?

Ms Harman: I think that women’s representation in the Swedish Parliament means that an equal number of women and men have addressed the question of how to prevent women from being trafficked into Sweden and exploited for sexual purposes. The Swedes take the view that prostitution does not involve a working relationship, that it is not a job but sexual exploitation, and that in the 21st century we should hope for a better relationship between men and women than one based on men paying women for sex. I think that they have a point.

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Motion made, and Question put forthwith, pursuant to Standing Order No. 83A (Programme motions),

Question agreed to.

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Orders of the Day

Pensions Bill

Lords amendments considered.

Madam Deputy Speaker (Sylvia Heal): I draw the House’s attention to the fact that privilege is involved in Lords amendments Nos. 1, 12 to 14, 16 to 18, 23, 24 and 27. If the House agrees to any of these Lords amendments, I shall ensure that the appropriate entry is made in the Journal.

New Clause

Lords amendment: No. 15, after clause 18, to insert the following new clause— Financial assistance scheme: scheme manager.

5.25 pm

The Minister for Pensions Reform (Mr. Mike O'Brien): I beg to move, That this House disagrees with the Lords in the said amendment.

Madam Deputy Speaker: With this we may discuss Lords amendment No. 16 and the Government motion to disagree thereto and amendment (a) in lieu thereof, and Lords amendments Nos. 17 to 24 and the Government motions to disagree thereto.

Mr. O'Brien: The Government have great sympathy for those who have lost pensions through no fault of their own. They saved in a pension scheme and deserve certainty in retirement. That is why the Government set up the Pension Protection Fund—to ensure that what happened to 125,000 people does not happen to others. That is also why we set up a more powerful pensions regulator, and it is why this Government—and this Government alone—thought it right to help people whose pension schemes failed in the past.

Many Members of both Houses believe that more help should be made available, even if it should come from the taxpayer. We have already significantly extended the financial assistance scheme, and we have amended the Bill to get more money to more people immediately after it is enacted—it increases the interim payments from 60 to 80 per cent. If the Bill’s progress is delayed, that will delay payments to pensioners. We also set up the review of scheme assets, led by Andrew Young, the senior Government Actuary; and last week the Prime Minister reaffirmed our desire to lift assistance levels closer to 90 per cent. Following the publication yesterday of interim findings, I am optimistic that the Young review will help us to do that.

Mr. Nigel Waterson (Eastbourne) (Con): Will the Minister give way?

Mr. O'Brien: If the hon. Gentleman allows me to say a little more and he wishes to intervene later, I will happily give way to him then.

The interim findings of the Young review strongly suggest that by making better use of assets within failed pension schemes we will be able to go beyond 80 per cent., and I am confident that we will be able to do so.

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Our response to the interim findings constitutes part of our ongoing reconsideration of the ombudsman’s first recommendations. As part of that ongoing reconsideration, I am delighted to be able to announce that the interim findings have persuaded us that more money can be made available. The findings of the asset review do not show that some more money should not be made available.

The Government believe that the cost of extending the FAS towards the 90 per cent. mark can now be met by making better use of the assets remaining in pension schemes, matched by a further contribution from the Government. To achieve that, we will need the co-operation of every pension scheme. The commitment that we are announcing today is to match the extra funds that the review identifies with the goal of moving towards 90 per cent. of expected core pension for all recipients.

Those extra funds will be based on the amount of assets remaining in schemes. Trustees must continue to act in their members’ best interests, but we hope that they will now take the view that those interests might not be served by expending scheme assets on annuities. The Government will match the extra funds that the Young review identifies as and when they are released by trustees, and we expect that to be achieved as quickly as possible. We will write to trustees of the schemes concerned later this week to explain our proposals in more detail and to urge them to co-operate with us in getting a better outcome for all members.

I hope that that commitment will convince the House that the Government’s intentions are genuine and that this group of costly, complex and contradictory amendments should not be supported. They could involve significant undefined Government spending and damage our ability to help those who most need it.

Mr. Waterson: I would not like the Minister’s speech to get off on the wrong foot. Can he please clarify that there is a world of difference between a core pension and an expected pension, so talking about an expected core pension is a total nonsense?

5.30 pm

Mr. O’Brien: Some pension schemes start at 60 or another defined retirement age, but we have made it clear that the financial assistance scheme will start at 65. There are some other aspects of particular schemes, including lump sums and so on, that might have been funded out of some of the schemes had they been properly funded. We know that they were not properly funded, but the Conservative party appears to suggest that the taxpayer should fund a lot more—

Mr. Waterson indicated dissent.

Mr. O’Brien: It appears that the hon. Gentleman is not proposing that the taxpayer should fund such things. He suggests that it should be done, but he is not prepared to will the means to do it —[ Interruption. ] He accepts that he is saying that things should be done, but he is not prepared to put in place the means to do them. Well, as the Government, we need to ensure that what we promise we can deliver. The Opposition have shown, by the way in which they pursue these issues, that they will make all sorts of commitments but do not have the capacity to deliver on most of them.

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Mr. John Redwood (Wokingham) (Con): Can the Minister tell us how much money he is budgeting for the matching promise, which will be a welcome improvement?

Mr. O’Brien: It is the case that the DWP has within its funds sufficient money to be able to match fund the amounts that may come forward. It is a matched funding commitment and we expect that the Young review will identify some extra funding that will enable us to increase the amount of funding available for the pensioners. We have said that we will look at that issue, and our view is that we will be in a position to match demand in the approaching comprehensive spending review period and deliver the increase from existing departmental assets.

In terms of the Conservatives’ approach, let us consider amendment No. 17, which would launch the Conservative lifeboat—it is in many ways an opportunistic attempt to generate party political controversy on this issue. The interim report of the Young review has, essentially, debunked the notion propagated by the Conservatives that there are large amounts of unallocated assets in pensions and insurance accounts waiting to be plundered. That means that the increased costs of the proposal—the Conservatives want to go right up to Pension Protection Fund levels—would inevitably fall on the taxpayer. That is a potential cost of almost £2.7 billion over the next 60 years or £640 million net present value. The Conservatives have made no real provision for that. They told us that it would cost the taxpayer nothing and could all be paid for by the supposed unclaimed assets.

It is worth reminding ourselves that the Conservatives were repeatedly warned by, for example, Lord Turnbull, who said that using unclaimed assets would represent

We now have the evidence from the Young review that shows this to be an uncosted amendment.

Mr. Gordon Prentice (Pendle) (Lab): Does not the review specifically exclude bank and building society account assets? Would they not make a big difference if brought within its purview?

Mr. O’Brien: The unclaimed assets in bank and building society accounts are not included in the review, but—my hon. Friend may have missed it—those funds have been allocated to young people. I hope that he or the Conservatives, given that their lifeboat has been sunk by the Young review, would not advocate that we should raid the boat of the young and take their assets. That money is spoken for and is going to young people. The Conservatives may be shifting their ground, but we must not rob our young people to pay the old.

Chris Grayling (Epsom and Ewell) (Con): I have two quick questions for the Minister. If his analysis is correct, why is the Young review continuing to look at the question of unclaimed assets? What is his assessment of the case study in appendix C of the review, which appears to set a clear precedent for recovering assets at a level more than sufficient to fund the lifeboat?

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Mr. O'Brien: I notice that the Conservatives are apparently still claiming that there is funding in insurance and pension assets—or are they? It is not very clear what they are suggesting. The Young review said that it is very unlikely that those assets would lead to anything. Shall I read the foreword to the review? I do not want to risk embarrassing the hon. Gentleman.

Rob Marris (Wolverhampton, South-West) (Lab): Go on, embarrass him.

Mr. O'Brien: I am being encouraged to embarrass the Opposition, but the Young review debunks the Conservative myth about pensions. Those involved in that review are continuing to look at the question of unclaimed assets, because that is what some people—including Opposition Members—have suggested. They do not think that that approach will lead anywhere, but they do believe that some of the assets in current pension funds should be aggregated. They believe that those assets could be sweated more efficiently, and combined so that annuities could be purchased in bulk, more money will be raised than was anticipated under the previous proposals.

Several hon. Members rose

Mr. O'Brien: The Young review has made it clear that neither the national insurance fund nor national savings are credible options. It makes it clear that defined benefit pensions and orphan assets will not provide the new source of funding that is needed. The Opposition should accept that their lifeboat amendment has been holed below the waterline: it is sinking fast and the time has come for them to abandon it. Our charge that the Opposition are guilty of fiscal irresponsibility is plain to everyone.

Additionally, the Opposition proposal adds complexity as pensioners could receive income from three different agencies—their pension scheme, the FAS, and the lifeboat top-up. That would make for a mangled bureaucratic nightmare, caused by the Opposition. They complained about the FAS, but now it seems that they want to duplicate it. The real question is whether the Government will do more for people, and what we have said today shows that we are prepared to look at ways of moving forward. In contrast, the Conservatives have merely brought forward uncosted proposals.

Geraldine Smith (Morecambe and Lunesdale) (Lab): As a former trade unionist, I know a good deal when I see one. I think that what the Government propose is a good deal for people who have lost their pension funds. Will my hon. and learned Friend remind us how much taxpayers’ money is, quite rightly, being used to fund the Government’s scheme? Will he assure me that payments will be speeded up, so that people receive some income as soon as possible? Finally, does he agree that Opposition Members have displayed a touch of opportunism with their amendment?

Mr. O'Brien: I agree that Opposition Members have displayed a touch of opportunism. The Young review has ably demonstrated the vacuity of their lifeboat proposal, which is going nowhere else but down.

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My hon. Friend the Member for Morecambe and Lunesdale (Geraldine Smith) is right that there is concern about the speed at which some of the payments are being made. I acknowledge that we have spoken to some of the trade union organisations that want the payments to be speeded up. I went to York recently to talk to the people running the FAS operational unit about why there were such delays. One of the major problems has been getting the required information from trustees, some of whom are good at providing it and others are a bit slower, but others have taken the view, for legitimate reasons, that this is not the right time to provide the information. They have taken legal advice, considered it and come to the view that they do not want to give the information at present. A variety of reasons are involved.

I have looked at how some of the payments are being made and we stand ready to make payments as soon as the trustees decide that information should be forthcoming. Many more people are now receiving payments and we stand ready to make further payments as soon as possible. The money is there. We are ready to make the payments and when we get the information we shall do so.

Richard Burden (Birmingham, Northfield) (Lab): May I take my hon. and learned Friend back to his comments about the matched funding commitment? The message I seem to be getting from the review team’s interim report is that there could be more money than was initially thought, including well over £1 billion in the assets of failed schemes. When my hon. and learned Friend talks about matched funding up to the level of the core pension, does he realise that above what is designed as core pension there are things such as widows and dependants’ benefits? Can he assure me that he will not impose a limit by saying that those things will not be funded if it turns out that there is enough money from the other assets recommended by the review team and the matched funding commitment he made today?

Mr. O'Brien: My hon. Friend raises an important issue. We have to look at where we are going in terms of the Young review, which was asked to see how much we can sweat out of the assets. My hon. Friend is right to say that the amount in failed schemes is well in excess of £1 billion. That gives us a fair amount of resources and if we can aggregate them, bulk them up and bulk buy, we can certainly go beyond 80 per cent., as the Government have indicated. However, what I cannot tell my hon. Friend at present is how much will be available in terms of the Young review. The review needs to come to fruition and we need the report. It was scheduled for the end of the year, but I have asked for it to be brought forward to November so that we can see it earlier, because I am conscious that a large number of people are waiting on the outcome of the review.

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