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Mr. Illsley: The hon. Gentleman referred to the enhancements of benefits under the British Coal superannuation scheme. They were within the rules of the scheme. The Government received a half share of the surplus of that scheme because, at that time, they owned the surplus. They were the employer, having taken over from British Coal after privatisation. Those enhancements to pensions were made under the rules of the scheme.
Dr. Cable: I thank the hon. Gentleman for that clarification. One category is particularly disadvantaged by the current arrangements and needs some attention. We are talking not only about low-income pensioners but about older pensioners, particularly people who retired before 1972, which was the crucial date. Some of those people apparently have no pension whatever. A significant number of them need particular attention, and I should be grateful if the hon. Member for Barnsley, Central clarified that point when he replies to the debate.
Mr. Flight: This is a much bigger issue than merely Lloyds TSB. It was only in 1973 that the law changed
to require the preservation of pension rights. Most company pension schemes and individuals employed by government in its various forms who left before pensionable age suffer from this problem. The question is whether the big issue of preserved rights pre-1973, which applies to all pension schemes and is separate from the more particular issues, can and should be addressed.
Dr. Cable: Surely the bank had the option of dealing with this issue generously--and had the surplus to do so.
Mr. Cousins: It is perfectly true that the law changed in 1972, and some companies have addressed the problems. Lloyds TSB, with a pension fund surplus of many hundreds of millions of pounds and a pension contribution holiday of 20 years, has elected not to do so.
Dr. Cable: That is precisely the point.
Secondly, there are the anomalies. The bank argues that it had a limited number of anomalies, and that it is grinding through them and taking them seriously. There is a circularity in the argument. The banks ask, "If there is such a big problem, why aren't there more anomalies?" The trouble is that many of the people who are on the threshold of difficulty do not know whether they are the subject of an anomaly. That is why there is a search for clarity and a need for guidelines. Unless there are guidelines, many of the anomalies will not surface because people are not conscious of them. Although I accept what the right hon. Member for Cities of London and Westminster (Mr. Brooke) said about the inherent difficulties of producing guidelines and about the long and complex history involved, if we are to get to the bottom of the matter the bank must be a little more forthcoming.
A third point, which we have debated across the Chamber, is the deferred pensioner representative. The issue is no longer the fear that the bank may put up a stooge, but that it may put up someone who, although he may act independently, has been nominated and can therefore be removed if he asks awkward questions. Several hon. Members have made that point. The election process, although more cumbersome, is not only more democratic but would help to lance the boil and deal with the bitterness that lies, at least in part, behind the argument.
My final point relates to what the hon. Member for Newcastle upon Tyne, Central said--it is partly an issue of principle and partly a point of law--about members of the fund having an interest in the surplus and how that interest is to be guaranteed. I understand that legal judgments have already been made which define the extent to which members of pension funds have an interest in the surplus, but it is difficult for pensioners to pursue that. This is not an academic point; it is a legitimate one, because the bank may make new acquisitions and changes. There are press reports, which may be false, to the effect that the bank has been circling around the Nationwide building society. If there are to be changes that will have a major impact on the pension scheme and its surplus, it is important to make the interest that members have in the fund more concrete.
Mr. Eddie O'Hara (Knowsley, South):
I shall be brief and try not to cover too much of the ground that has already been covered. I declare a sort of interest as I have been a customer of Lloyds bank for almost 40 years and I have many accounts and arrangements with it.
My concern is for my constituents who are pensioners. It has been said that the question overhanging Third Reading has provided a momentum to the resolution of certain issues. However, as my hon. Friend the Member for Newcastle upon Tyne, Central (Mr. Cousins) pointed out, there is all the difference in the world between having assurances--no matter in how much good faith they are given--and having matters buttoned down. I am not satisfied that, if the Bill is given a Third Reading, the momentum will not cease; I am not satisfied that the assurances, commitments and concessions will come to fruition. Much hangs on the granting of Third Reading tonight.
The two issues interrelate and I do not think that I need to say more about the issue of the poor pensioners and the anomalies that must be addressed. I would prefer to be able to say that they have been addressed, rather than that they are being addressed, because that would make all the difference in the world.
The pension fund is very buoyant--£1 billion--with 20 years' contributions stretching up to about 2015. The treatment of the victims of anomalies and the poor pensioners is dependent on the future health of the fund. No one is suggesting that the group will raid the fund, but it is vulnerable to weakening and dilution through being merged with the funds of companies that are taken over by the group. There is also concern that the TSB pension fund, in particular, may be managed in the interests of the shareholders rather than the pensioners. That is why the issue that I have raised several times during the debate is crucial.
The pensioners have been assured that their interests are protected under the 1995 Pensions Act. However, if they wish to defend their interests in law, that may involve litigation that is far beyond their means, especially if it is resisted by the bank, with all the resources at its disposal. Therefore, it is crucial that their interests are protected by the trustees. They cannot be confident of that if the trustees are management appointees and current employees--who, as has been suggested by some hon. Members, might feel vulnerable. That is why the appointment of the pensioner trustee is so important.
Mr. Edward Leigh (Gainsborough):
Like other hon. Members, I come to the debate because constituents have raised the issue with me. I was chided by the hon. Member for Barnsley, Central (Mr. Illsley) for not having
I come new to these matters, like many hon. Members. We are dealing with a large company, and a large and buoyant pension fund of some £1 billion. I was horrified by the appalling hard luck stories of people who had given a lifetime of service, but were receiving derisory pensions, which is why I decided to come here and try to put the company on the spot. As has been said, this is our last opportunity to do that.
It is an important issue, especially for Conservative Members, because although we believe in capitalism and in management being given adequate rewards--I do not want to follow the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) in criticising the top management because no doubt it has been instrumental in building up a successful company and fund--we also believe in the principle of morality. We believe in looking after people who are not part of the top management and who have very little power to wield, but who look to us to protect their interests. It was the appalling stories that provoked my interest in the matter.
I came here tonight with a simple question--will the hon. Member for Barnsley, Central explain the nature of the one-off payment? When he said that that was a fair question, but that difficult negotiations were continuing with the Inland Revenue, I was satisfied. I assumed that those were terribly complex matters which would delay the Treasury for some time. However, the more that I have listened to today's debate, the less I am convinced by those arguments.
The Second Reading debate was on 20 April; we are now at the end of July. I have been informed that the company went to the Inland Revenue only in June to discuss the matters. I am worried that there has been some dragging of feet, although I may be wrong about that. Perhaps the hon. Member for Barnsley, Central can reassure me that that has not happened, and that the company immediately started discussions once the commitments were given in the Second Reading debate. Why did the company even have to wait for the Second Reading debate before starting discussions? Surely the matters must have been considered long ago. Surely Parliament has been considering the Bill for the best part of a year.
Why--at this last gasp--are we still waiting for the figures? The hon. Member for Newcastle upon Tyne, Central has informed the House that he and other hon. Members have been given some intimation of the figures. I have been told by those who briefed me on behalf of the action group that my hon. Friends the Members for Aldershot (Mr. Howarth) and for Arundel and South Downs (Mr. Flight) also have been given some intimation of them. Hon. Members on both sides of the House now tell us, "Of course we cannot share those figures with you." Why is that so? Although I realise that it would be invidious to mention individual cases--people by name, what they receive now and what they might receive in future--I can discern no clear reason why the figures should not now be shared with the House.
We are debating the Bill's Third Reading. Once the Bill is passed, we will have no more power over those matters. Why cannot the information be shared with us now?
Why have the negotiations been so complex? I am very conscious that the Paymaster General is in the Chamber and presumably will be replying to the debate. He thoroughly understands the matters that we are debating and is well-respected for that knowledge. As I said in earlier interventions, we are talking about pensioners receiving very small sums under fairly easy-to-understand schemes. We are talking not about great complexity, but about saving public money by getting people off of social security.
The British Coal point was made by the action group in its briefing for hon. Members. The hon. Member for Barnsley, Central dealt with that point, saying that the British Coal scheme was a different type of scheme and that the rules were, therefore, not so complex. However, surely there must have been many other schemes that are similar to the one that we are debating now. Surely similar negotiations have been held in which it has been fairly easy to resolve similar matters.
It is very important that, when the Minister replies to the debate, we should put him on the spot and discover who is delaying a resolution. I have been told that, when Lloyds TSB was asked whether Inland Revenue consent was the only condition precedent to an additional payment for the worst-off, it was stated that it was not, and that the Lloyds TSB representative--the deputy chief executive, Mike Fairey--was equivocal about what other issues he had in mind.
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