House of Commons Hansard Debates for 28 Jul 1998 (pt 26)

8.34 pm

Mr. John Hayes (South Holland and The Deepings): My hon. Friend the Member for Gainsborough (Mr. Leigh), as ever, has been excessively modest and excessively moderate. He was really saying--I think that this needs to be said, as the context of the debate is important--that, as the Minister knows perhaps even better than my hon. Friend, unbridled and unfettered capitalism is a harlot.

The debate is really about small, ordinary people against the big battalions. The House is at its best when it articulates the needs of small, vulnerable people. What greater or more noble goal can there be for hon. Members than to articulate the needs of the most needy and the case of those who are least able to make their own case? Surely that is the most noble role to which hon. Members can aspire.

There have been unacceptable delays in the matter. I join the debate not because of a specific interest in banking or mergers, but because of a particular interest in

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the needs of individuals who have approached me, as they have approached hon. Members from both sides of the House, with very painful stories. Hon. Members on both sides of the House have told us some of those individuals' very distressing stories, which--although it would be wrong to repeat them in detail--have moved many hon. Members to take a specific interest in a subject in which otherwise they might not have taken such an interest.

Some specific questions have to be asked. It is all very well to talk about the difficulties of implementing ex gratia payments--I respect the judgment and knowledge of my right hon. Friend the Member for Cities of London and Westminster (Mr. Brooke) on the matter--but some notional figures or estimates could have been given and a firm timetable could have been offered. Such information has not been forthcoming since the Second Reading debate.

The Government have a critical responsibility in the matter. I ask the Minister to give three specific assurances.

Mr. Illsley: The hon. Gentleman and other Opposition Members might be under a misapprehension about the Government's role in the Bill's passage. The Government play no role and have no locus in private Bills. It is, therefore, unlikely that the Minister will respond to the issues that the hon. Gentlemen are raising.

Mr. Hayes: It would have been helpful if the hon. Gentleman had waited for me to articulate the specific points before he stated the Government's responsibilities. Ministers do have a responsibility to give us a view on the more general issues aired by the specific matter dealt with in the Bill: ownership of pension funds.

Mr. Illsley rose--

Mr. Hayes: I shall not give way again, because I want to speak only briefly. It would be surprising if the Minister did not deal in a reply with this general matter, which has been mentioned by so many hon. Members speaking in the debate.

Who is responsible for the delay? We have heard about protracted negotiations with the Revenue, but why were those negotiations so protracted? As my hon. Friend the Member for Gainsborough said, one might have thought that the negotiations should be relatively straightforward for some of the individuals involved. We certainly deserve more than the brush-off of claiming that there are private matters upon which the Government should not take a view.

We have to receive from the Minister at least some commentary and observations. I am not suggesting that the matters are directly within his competence, but I certainly presume that he will want to make known his and the Government's views on them. If he does not do so, it will not bode well for the Government's reputation among the many pensioners who are very appropriately and reasonably seeking redress and answers to queries.

I come to the debate in that spirit, and hope that the assurances that various hon. Members have given will come to fruition. I hope also that we will use this matter as an opportunity to explore the wider and broader issues.

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I hope that the matter throws some light on those issues, and that the problems will not be repeated in similar situations.

8.38 pm

Mr. Desmond Swayne (New Forest, West): I come to the debate late. I must confess that my eye has not been on this ball over the past few months and that my mind has been exercised by other issues. However, I have been alerted to the problem by constituents in recent weeks. As a consequence, I have been in correspondence with Lloyds TSB and had conversations with colleagues on the issue. I have found this evening's proceedings enlightening.

However, I am still in the dark on a fundamental question. I hope that the hon. Member for Barnsley, Central (Mr. Illsley) and those on the Front Benches may cast some light on it. What great injustice is to be avoided by giving the Bill a Third Reading and what great public good is to be lost--what opportunity is to be missed--if the Bill is denied a Third Reading?

Mr. Illsley: The issues that we have discussed on pension enhancement and anomalies will not be addressed. If the Bill is not passed, what incentive is there for Lloyds TSB to address those issues again?

Mr. Swayne: I am thoroughly mindful of those issues. I want an explanation of that and of what is to be achieved by the Bill. I am in the dark about the primary purpose of the Bill. I should like that to be explored in the winding-up speeches.

8.40 pm

Sir Geoffrey Johnson Smith (Wealden): I do not want to go over the ground that has already been covered expertly by hon. Members on both sides. I do not have the deep knowledge of some on the problem. I have been alerted by a distinguished constituent who was a public servant for many years and, on his retirement, became an employee of Hill Samuel. He has written to draw my attention to his case and that of a woman who served Hill Samuel in a more humble capacity for more than 20 years.

While serving with Hill Samuel, the gentleman paid the maximum allowable amount of additional voluntary contributions. When he retired, he was advised that those AVCs should be used to ensure that his pension was index-linked. As his Hill Samuel pension has been upgraded to meet the cost of living increases under the terms of the scheme, it has not been necessary for the trustees to draw on his accumulated AVCs. He considers that he was wrongly advised when he retired at the end of 1991 and requests that the mistake be rectified. It seems straightforward to request that the AVCs should be used to increase his pension, as intended.

My constituent understands that those who retired from Hill Samuel received enhancements to pensions. He has written more than once to find out the basis on which the enhancements were made and why he was not included. That is a legitimate question. Like many who have spoken in the debate, he does not know the reason for the delay.

My constituent's secretary worked at Hill Samuel for 20 years until she was made redundant in 1992. She received a lump sum, but no pension, because she had not reached the age of 50. I do not have the figure of the lump

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sum, but my distinguished constituent believes that it was not generous, given her long and faithful service. He wants to know why the initial figure that was quoted to her orally was later reduced for no apparent reason. The lady in question has been unable to get a satisfactory answer.

Those two cases--one involving a gentleman who received a pension from his previous service and then another one for which he paid AVCs; the other involving a lady who was employed in a more humble capacity--show that something has gone wrong with the company's pensions.

8.43 pm

Mr. Peter Brooke (Cities of London and Westminster): I declared my interests on Second Reading. I shall not declare them again. We agreed on Second Reading that the Bill did not have specific relevance to pensions, although we were allowed to discuss the issue. The concession letter of 20 April to my hon. Friends the Members for Aldershot (Mr. Howarth) and for Arundel and South Downs (Mr. Flight), to which frequent reference has been made, was an imaginative lubrication to the Bill's passage, but it did not speak to the tone and text of the Bill.

I should like to add a personal note to the comments of the hon. Member for Twickenham (Dr. Cable). He and I blocked Third Reading initially with a cry of, "Object." In that respect, we have played some part in bringing this evening's proceedings about.

I would have dwelt on the issues raised by the hon. Member for East Antrim (Mr. Beggs) had he still been here. I have taken the trouble to verify the actuality in the case of the part-time former employees of TSB in Northern Ireland, and satisfied myself that the company has behaved properly. I shall not detain the House on that.

We are addressing three issues, relating to those on low incomes, those with anomalies and the deferred pensioner trustee. I shall dwell on each of those briefly.

Like many great companies, Lloyds TSB has a team, consisting mostly of former employees of the company, who go round visiting pensioners to verify that their conditions are satisfactory. The team reports back on the conditions of those pensioners. Before the Hill Samuel action group was created, Lloyds TSB visited the Inland Revenue to verify whether there were ways in which it could augment those pensions, provided that that augmentation would not be treated simply as a substitute for social security payments, which would be reduced pari passu with the extra pension. The Inland Revenue politely showed the Lloyds TSB team the door, and said that no action could be taken.

The visit of Lloyds TSB to the Inland Revenue in June, which was brought forward, was a response to the commitment to conduct a full review of all those on low incomes. Lloyds TSB said that that would take six months. We were told on Second Reading how long the review would be. With the debate taking place on 20 April, it would go through to 20 October. The Inland Revenue said that there was no point in discussing the issues unless Lloyds TSB came back with its proposals. The Revenue said that it could not discuss anything without specific proposals to consider.

We may feel that fate is being unfair and the Inland Revenue is being unimaginative, but Lloyds TSB is doing its best to deliver in line with the Inland Revenue's

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request. That request goes back to the issue of ensuring that what is given by Lloyds TSB is not taken away by the Treasury to return to the Department of Social Security.

I may be the only Member speaking tonight who does not know the figure that Lloyds TSB has in mind, so there is no need for anyone to intervene on me to ask what the figure is. I see the hon. Member for Barnsley, Central (Mr. Illsley) saying that he is in the same position.

I should tell those who are concerned that the process should be accelerated that, when Lloyds TSB is in a position to know the outcome of its review, it will in all courtesy want to discuss that with the unions that represent 58,000 people before going public on it, so that the issue is agreed. The hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) said that people have to know what they might be given before they can make up their minds, but that is not the issue. The issue is what the Inland Revenue rules will be. Until Lloyds TSB knows the Inland Revenue rules, it cannot come forward with a proposition, because it does not know from which pocket of its coffers it would be paying.

As for the anomalies, there has been some criticism about the length of time it is taking to produce the guidelines, although some charity has been exercised in recognising the complexity of the matters concerned. One problem is exactly the same as exists in the context of pensions mis-selling: when pensions were originally granted or arranged, the law of the land did not require the holders of pension funds to keep much of the information that is now required. An enormous amount of archival work therefore needs to be done to examine what circumstances applied to particular individuals at the time. That affects the time it takes to produce guidelines.

My best understanding of the timetable for the issuing of the guidelines marches with that of my hon. Friend the Member for Arundel and South Downs--that, although they are now before the lawyers, they still have to be run in front of the chairman of the pension fund. We are talking about weeks, and I am confident that, although 30 September is the deadline by which people should raise their anomalies, if Lloyds TSB fails to produce the guidelines before the middle of August so as to allow a further six weeks for anomalies to be brought forward, we can expect the company to be flexible. However, I have no direct authority for saying that.