Pensions Bill

– in a Public Bill Committee on 30th March 2004.

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Mr. Win Griffiths in the Chair]

Photo of Malcolm Wicks Malcolm Wicks Minister for pensions, Department for Work and Pensions 2:30 pm, 30th March 2004

On a point of order, Mr. Griffiths. I welcome you to the Chair. The hon. Member for Eastbourne (Mr. Waterson) raised a point of order at the beginning of play this morning. I thought that it would be helpful to reciprocate with my own point of order. I welcome the opportunity to clarify the position on the two points that he raised. He referred first to a weekend press report concerning Allied Steel and Wire workers and other workers that we discussed at length last week.

The hon. Gentleman may recall that I have already told the Committee—indeed, it was last Thursday—that we are working with the pensions industry to establish firmer estimates of the numbers and costs involved in such cases. I said that

''we are currently exploring with industry representatives a basis on which we can establish firm estimates of the extent of the problem of defined benefit schemes winding up underfunded. We are also assessing the numbers affected and the potential scale of losses.''—[Official Report, Standing Committee B, 25 March 2004; c. 446.]

I do not think that the Sunday newspapers added anything to what I said to the Committee.

Secondly, it seems that there has been confusion about the priority order. The hon. Gentleman and my hon. Friend the Under-Secretary may have been talking at cross-purposes last week. The Bill introduces a priority order that will broadly ensure that, for schemes that do not enter the pension protection fund because of their funding position, individual scheme members should not be worse off than if their schemes had fewer funds and entered the PPF. They were the priority order measures to which my hon. Friend was referred.

However, there is a separate question about the current priority order regulations. I wish to take the opportunity to remind members of the Committee that my right hon. Friend the Secretary of State for Work and Pensions said:

''I can confirm that we shall move forward in the very near future to rebalance the order so that the basic benefits of those in the run-up to retirement and other deferred members take precedence over the indexation of pensions in payment. That will achieve a substantial rebalancing. Many members may gain 20 per cent. of their pension, so it is a worthwhile interim change before the pension protection fund comes into effect.''—[Official Report, 24 February 2004; Vol. 418, c. 214.]

I hope that I have provided the necessary level of clarification sought by the hon. Member for Eastbourne. I shall be happy to write to him, so that we can all be absolutely clear about the two separate issues in respect of the priority order.