I have been working on the subject for 19 years, so I think I might be permitted to resume my campaign for just 19 minutes. If I do not go over this ground, my attempt to do something for the early leaver today will be as futile as my other attempts over the last 19 years. Therefore, I hope that the House will give me the indulgence of allowing me to explain my case in my own way.
The genuine difficulty that still remains and that I am seeking to address head-on in my new clause 1 is that, in a final salary scheme, the calculation of the amount of benefit that the employee would get if he or she stayed until the normal age of retirement has to relate to what the person is earning at age 62, 65 or whatever is the normal age of retirement in the scheme. If someone goes to their employer at age 45 when they are not earning anything like the full amount that they might hope to get if they stayed with that employer and continued to get annual increments, promotion and the rest, somebody has to make a guess as to what the person might get if they followed their normal trajectory to retirement and got as much as they could, even staying in a firm that, in the opinion of the employee, will not give him or her the full amount of entitlement that the employee is entitled to and that they think they will get if they go to another firm that might put a higher value on their work.
Even if one stayed with an employer where one thought that one was not being fully used, once one has achieved a certain level of seniority, it is a reasonable expectation that one will continue to get increments and possibly promotion that will take one up to a final salary when one eventually leaves that will give one a handsome pension. However, if one related one's pension to what one was earning at the time of severance 10 or 20 years before, one is worse off, because one might be only half way to one's ultimate final remuneration, quite apart from the effects of inflation.
Under the system that is almost invariably in use at the moment, when someone notifies their employer that they wish to leave, they tend to have their transfer — or preserved value, if they chose to leave their money in the first employer's trust—valued on the basis of what they are earning in mid-career, which is not the same as what they might reasonably expect and hope to earn if they stay another 10, 20 or however many more years it might be, in that pensionable service.
In calculating the final salary on the basis of the salary in mid-career, the employer's trustees are taking advantage of the early leaver in a way that is sometimes exceedingly damaging, quite apart from the inflation expectation. Although we have made progress in recent years, we have not made nearly enough. I am reliably informed that the amount of money that early leavers are losing every year from their entitlement under the present regime is of the order of £1,000 million. The House must reflect on that figure.