Financial Assistance Scheme

Oral Answers to Questions — Work and Pensions – in the House of Commons at 2:30 pm on 4 June 2007.

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Photo of Andrew Robathan Andrew Robathan Opposition Deputy Chief Whip (Commons) 2:30, 4 June 2007

How much has been distributed by the financial assistance scheme; and if he will make a statement.

Photo of James Purnell James Purnell Minister of State (Pensions Reform), Department for Work and Pensions

As at 25 May 2007, the financial assistance scheme had paid out more than £4.6 million gross—more than £3.6 million net—to more than 1,200 qualifying members. We are paying everyone we can, and members who believe that they are eligible for assistance but are not being paid should ask their pension scheme trustees to apply on their behalf.

Photo of Andrew Robathan Andrew Robathan Opposition Deputy Chief Whip (Commons)

I do not think that that will be of much comfort to the members of the pension scheme of British United Shoe Machinery in Leicestershire, who are still waiting for money after the collapse of their scheme. Will the Minister confirm that more than 9,000 people are eligible and that only a very small fraction of that number have been paid from the FAS; and that, even going by the figures that he gave, it has cost more than twice as much to administer the scheme as has been disbursed?

Photo of James Purnell James Purnell Minister of State (Pensions Reform), Department for Work and Pensions

My understanding from meeting people from the scheme is that people in the BUSM scheme are being paid. I believe that 18 members' survivors have been assessed for initial payments and six are in receipt of initial payments.

The more general point is that we cannot pay people if the schemes do not give us the information on what people are owed. We are working with some trustees, such as those at BUSM, where we get good co-operation, but there are others who are not co-operating with us to give us the information we need. My right hon. Friend the Secretary of State has made it clear today that he is prepared to use criminal sanctions against those trustees who persistently refused to give us the information we need.

Photo of Mike Penning Mike Penning Conservative, Hemel Hempstead

The Minister said a few moments ago that more than 100,000 beneficiaries of the FAS scheme are now getting the money, but how many of the 125,000 are getting their full entitlement under the scheme and how many of the 700 Dexion workers whose pensions were stolen from them have received the full amount that they were promised?

Photo of James Purnell James Purnell Minister of State (Pensions Reform), Department for Work and Pensions

The hon. Gentleman's question demonstrates a misunderstanding that is quite prevalent. There is no system to pay all 125,000 people now, because the vast majority have not reached pension age. No one is saying that all 125,000 should be paid now. The key point to make is that trustees should be giving us information on people who have reached pension age, so that we can pay them—

Photo of Mike Penning Mike Penning Conservative, Hemel Hempstead

You have not answered the question.

Photo of James Purnell James Purnell Minister of State (Pensions Reform), Department for Work and Pensions

I have. The hon. Gentleman asked that all 125,000 be paid, but no one is proposing that because the majority are below the age of retirement.

Photo of Nigel Waterson Nigel Waterson Shadow Minister, Work & Pensions

Will the Minister disown the claim made on GMTV recently by the Chancellor that every single one of the 125,000 will get at least 80 percent. of their pension? Does he accept that that claim is inaccurate and cynical, and that most FAS claimants, when they get paid at all, will get only half of their original entitlement, with many receiving much less? Why is this Government treating them like second-class citizens?

Photo of James Purnell James Purnell Minister of State (Pensions Reform), Department for Work and Pensions

The hon. Gentleman will not be surprised to hear that I do not disagree with the Chancellor, for the good reason that there is no difference between the hon. Gentleman's party and mine on the issue. The only difference is on whether more taxpayers' money should be put into the scheme. A few weeks ago, the hon. Gentleman said that there should not be more money for it, but when we found money to put into it and doubled the scheme to nearly £2 billion in net present value, the Conservatives agreed with us. The difference is that we were prepared to put more taxpayers' money into it, and they were not.

l

This has not answered the question, it is merely a political sidestep. If ministers don't answer questions what is the point of presenting themselves to the house?

Submitted by leslie dalton