I tabled an amendment or two to the clause, but I am sure that for all the right reasons they have not made it through to the final round. I wanted to make a point about our preferred method of dealing with the 60,000 people—the ghosts at the feast, as I previously described them on the Floor of the House—referred to by the hon. and learned Member for Redcar, the hon. Member for Cardiff, West and others.
The Government have made it quite clear that the Bill should not be retrospective. In principle, I can see the logic. We have already expressed our concerns about the vulnerability of the fund in its earliest years, and it is difficult to justify a retrospective role for the protection fund as it stands in the legislation. Equally, all members of the Committee feel most strongly that those 60,000 people cannot simply be ignored.
The Minister neglected an earlier opportunity that I gave him to reveal more to us—and I am not privy to any ongoing discussions—about how those 60,000 can be compensated. The hon. and learned Member for Redcar gave Her Majesty's official Opposition a fair old tongue lashing, but on the issue under discussion, which she regards as important, we were the first to table amendments to the Bill, and I do not think that they have attracted her signature or those of her hon. Friends.
We at least proposed a possible solution, which was in part based on the Private Member's Bill of the right hon. Member for Birkenhead (Mr. Field), to use so-called unclaimed assets to compensate the 60,000. At last, despite the unwillingness of the Secretary of State to allow an independent inquiry into the numbers involved, it now seems that 60,000 is the right figure; I think that the Secretary of State said so on the Floor of the House the other day.
The most practical way to deal with the issue is to have a separate fund, known as the interim pension protection fund, running parallel to the pension protection fund and administered largely by the same people—there is no point in reinventing the wheel and there must be economies of scale in having a separate fund run under the same umbrella as the 100 to 150 people that we have heard will be working for the PPF—with the sole task of administering those assets. They would be used to deal with the people who have already lost or who will have lost—I am sure that the process will not have stopped by April next year—pension rights before the Bill is enacted and the fund is set up.
The interim fund would take its place alongside the pension protection fund and the fraud compensation fund. There would be three parallel funds, all administered by the same people but kept quite separate because of the point I have already made about retrospection.
That approach would be fair and sensible. We are not impressed by the Treasury's argument that just because funds are unclaimed does not mean that they do not have any owners. Everyone has a shrewd suspicion that the Treasury has other plans for those funds—possibly to prop up falling receipts from the lottery for charitable purposes. I have no doubt that the Treasury wants to get its own sticky fingers on those assets.
Given that some estimates state that there are £15 billion of unclaimed assets across the country, there is plenty of scope for meeting those claims. Subject to whatever work is going on behind closed doors in Government—perhaps the Minister will fill us in on that—it seems that the only ones doing any serious work are the unions, and people such as Dr. Ros Altmann, to whom we should all pay tribute for raising the profile of the issue and doing some hard number crunching.
We take the view that, in an ideal world, the board should have that function. So far, that idea has not found favour with the Government, as is their prerogative. I am slightly more surprised that it has not found favour as a way of tackling the problem with some Government Members who take a close interest in the subject. It is a little rash to back just one horse—namely, the hope that the Government will decide to use taxpayers' money to compensate those 60,000 people—because that horse may not even make it to the finishing line.
I commend our thoughts on the clause. Bluntly, we think that the board should have wider functions. I
hope that I have set out clearly how we believe that that would work.
If we are to back a horse, perhaps we should back Best Mate. Usually in such matter, that is one's own side.
The hon. Gentleman is wrong to say that the idea of an interim protection fund did not occur to some Government Members. As he probably realises, I had the same thought: that one might try to amend the Bill in Committee to create a third fund, to be known as the interim protection fund or whatever. The Ways and Means resolution on the Bill is drawn up in such a way that it is impossible at this point to draw up an amendment that amends the Bill in that way—or, at least, we could not do so. However, I accept that the idea might be a way to provide more clarity on the issue of assistance, compensation or whatever one calls it for those affected by the occupational pension insolvency problem of recent years.
Of course, how that fund would have been funded, had it been possible to introduce it in the clause, is a matter for debate. There is a problem with the orphan assets proposal of my right hon. Friend the Member for Birkenhead. That proposal is worth looking at; the Conservatives find it attractive because it means that they do not have to make any spending commitments in their consideration of the issue, so it seems like an easy way out. The problem with the proposal is that building societies and banks have objections to it.
I have been following carefully what the hon. Gentleman says, because I know that he has built up a genuine expertise on the matter. It is not that we do not want to make spending commitments; we are just trying to find out the size of the spending commitment, if the measure is one of the options. The Government have set their face against an independent inquiry, so the only figures available are those of Dr. Altmann. With the best will in the world, she does not have the resources of the Government. I just wanted to clarify that point.
My view is that it is right to decide whether it is correct to assist in principle, and then to look at the scale on which one can assist, and the funding that should be put into that. Over a very long period—that is what we are talking about—occupational pensions will be undermined if no form of assistance is available. The pension protection fund might not perform the role that it is intended to perform if lots of people are wandering around the country saying, ''You can't believe in pension protection; we thought we had such protection, and a guaranteed pension and security. Look at what they said to us, and look what it meant.'' It is therefore in the public interest to say that we will assist, and to look at the scale on which that assistance could be offered and the cost of that.
The hon. Gentleman is quite right that Dr. Ros Altmann has made estimates, and she has ensured that they are overly generous, in order to give some idea of the maximum scale of contribution that the Government would have to make. That maximum scale, whatever it is, pales into insignificance, and seems a tiny sum, when held against the massive sums
involved in subsidising private pensions in the UK. That costs £14 billion a year, half of which, as we now know, goes to the top 10 per cent. of earners, and 25 per cent. to the top 2.5 per cent. of earners. Huge sums are involved and we must restore confidence in occupational pensions. The provision would have a broader impact on restoring confidence in pensions and it is worth the Government's investing in that. Nevertheless, if it was decided that it was appropriate for unclaimed assets to be used to fund assistance or compensation, I would not object, not least if unclaimed assets in national savings, for example, were used. That is money that people have lent to the state rather than to the private sector, and huge sums may be involved. I have not asked how much money there is, but I am sure that there is a significant amount of unclaimed money that could be used for this purpose.
It might have been better if the Ways and Means resolution had made it possible for an additional function to be added to the board to create a separate fund to avoid confusion when administering any compensation. If that is to be done—I hope that it will be—we must wait and see exactly how.
We shall return to the subject when we come to later amendments because we have had to find other ways of trying to get around the Ways and Means resolution.
Hon. Gentlemen have used a broad-brush approach to clause 84, if not a paint roller, but I understand why and we have had this debate on many occasions. It is important for the Committee to recognise that, as we have always said, the pension protection fund will apply to the future and cannot be made retrospective. To pay pension protection fund compensation to companies that have already gone bust, leaving members with less than their expected pensions, would mean compensating those who had not paid the PPF levy and an unfairly bigger bill for those who had.
I thank my hon. Friend for that comment.
We have had this discussion, understandably, in the context of a specific clause on the pension protection fund and I want to make it absolutely clear for those who read Hansard that we cannot discuss retrospection. However, as my hon. Friend and other hon. Members know, the Government are sympathetic to those whom my hon. Friend has represented so effectively and who worked so hard to build up their pensions for their future retirement but now, as he so eloquently said, have lost both their jobs and their security in retirement.
As my hon. Friend the Minister and my right hon. Friend the Secretary of State said earlier, they have both met people who are affected and their representatives and have considered all the options, but have had to be very straight and tell them that they do not know whether a solution can be found to their current plight. In the Bill we are trying to do everything possible to ensure that it never happens
again, but we must be clear that expectations should not be raised because we may not be able to deliver all that.
As I said, that is a broad-brush approach to a clause that relates specifically to the functions of the pension protection fund, which are set out in part 2, and to the fundamental functions of the board—namely, that it must manage the pension fund and the fraud compensation fund, and that it may levy contributions to those funds under clauses 137 and 151. The clause also states that the board has the functions that are set out in other enactments, as well as all the functions set out in the Bill.
Functions in other enactments may include those that have been transferred to the PPF from the Pensions Compensation Board. Those functions were originally set out in the halcyon days of the Pensions Act 1995. It is worth mentioning that the clause sets out the functions of the board in a similar way to the way in which clause 4 sets out the functions of the regulator, which we discussed earlier. If we were still talking about the regulator, we would refer not to the ghost at the feast, as certain Members have suggested, but to the phantom at the opera.
The clause should be read with clause 85, which we shall discuss in a moment. Clause 85 states:
''The Board may do anything which . . . is calculated to facilitate its functions, or . . . is incidental''
to them. We shall debate those functions in our debate on clause 85.
Question put and agreed to.
Clause 84 ordered to stand part of the Bill.