New Clause 34 — Financial assistance scheme for members of certain pension schemes

Part of Orders of the Day — Pensions Bill — [2nd Allotted Day] – in the House of Commons at 1:44 pm on 19 May 2004.

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Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions 1:44, 19 May 2004

I may be able to cover some of those issues in a moment. The scheme is very much for the insolvent employer. It cannot be about any disappointments in a range of pension schemes. Where an employer is solvent, the responsibility rests with that employer.

Over the past few months we have been clear with the House that a potential action for the group I was describing raises a number of complex issues. In particular, we have been clear, and I am sure the House will understand, that we cannot accept liability for private pension losses in general. Indeed, it would be quite wrong to do so, and would mean the taxpayer writing a blank cheque. No Government can undertake to nationalise financial risk. While we do not accept any Government legal liability, we do accept that the situation is very serious. It is right that the Government take action to provide some assistance.

The new clause requires the Secretary of State to establish a financial assistance scheme for people who are in underfunded occupational pension schemes that have begun winding up before the pension protection fund is set up. The Government have put forward £400 million over 20 years to help address the serious losses that some now face. It is open to industry to offer further support. We hope that that support will be forthcoming. This money will not cover everyone who feels aggrieved, nor will it give those it does help everything they might want, but it represents significant help to those who have lost the most.