| Child Support, Pensions and Social Security Bill
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Mr. Pickles: I shall not speak for long on the amendment, which gives us an opportunity to examine our treatment of the beneficiaries of pension schemes. Several references to the Robert Maxwell scandal were made this morning. For reasons that I suppose are obvious, given its location, I have many Maxwell pensioners in my patch—including one or two of the key activists. I have seen them on several occasions. Such people spend their entire working life saving up and getting everything sorted out, with the assumption that things will be okay when they retire, When they reach retirement, however, it is striking how relatively powerless they feel. Only a couple of weeks ago I had in my surgery a chap who is the beneficiary of the pension scheme of a large pharmaceutical company. Because it is a multinational company, he compared and contrasted his rights, as a British beneficiary, to those of a beneficiary in Germany and France, in terms not only of the ability to appeal and so on, but of his lack of feeling of involvement with his former employers, to whom he had devoted 30 years of his life. He felt cut off from them. The amendment would allow an interested party to go to court—as my hon. Friend the Member for Beckenham said, that can go wider than the beneficiaries of the pension scheme offer, an opportunity to challenge the order and provide further protection if any person or body were likely to be disadvantaged. Who is likely to be disadvantaged? The mechanisms could have considerable effect on the amount that various classes of scheme members—deferred or current pensioners—eventually receive. The Minister may, as he has done on several occasions, completely satisfy us on the matter, but this seemed a good place to insert such safeguards. The Hansard of this morning's debate will show that we discussed trustees and the like. Openness exists only on paper; in practice, the average beneficiary of a pension scheme feels pretty powerless. There is nothing much that he can do in relation to the election of trustees, for example. He has no idea who the trustees are or whether they are worthy. The right is given by Parliament, and we do not find ways for Joe Public to make a difference. The amendment is designed to make a difference, and, just as important, to elicit a response from the Government about people who feel that they have been materially disadvantaged as a result of a particular decision about a modified order to a scheme. Mr. Rooker: I would be distressed if I felt that I could not satisfy the Opposition on this matter. Their suggestion is entirely reasonable; indeed, I would expect my hon. Friends to say, ``Hang about.'' However, I can satisfy hon. Members—all of them—by saying that the matter is already covered in law. Section 96 of the Pensions Act 1995 makes comprehensive provision for the review and revision of Opra's determinations and orders, and for reference on legal questions to be made to the High Court, or, in Scotland, to the Court of Session. Opra's powers can be challenged in the courts. The clause is part of a package of measures designed to enable Opra to modify scheme rules in order to allow the winding up of a scheme to be completed properly, but only when the employer is insolvent. Opra will be able to make only the minimum changes necessary to allow the scheme to be wound up, so a restriction has been provided. When a scheme is set up, detailed attention is not always paid to the rules that govern its winding up, and winding up can be delayed by problems caused by scheme rules. In the absence of an employer to agree to changes to scheme rules, it may be difficult for trustees to make even the straightforward changes necessary to wind up a scheme. Trustees may ask the court to modify scheme rules to allow winding up to continue, thereby causing further delays and unnecessarily taking up more of m'learned friends' valuable time. The clause will provide trustees with a low-cost way to amend scheme rules if, and only if, amendment is needed to complete winding up. It is intended that interested parties will be told about an application to Opra for a modification of scheme rules and the reasons for that application. Regulations will ensure that the scheme's trustees tell members about such an application, and time will be available for representations to be made to Opra before the application is decided. Amendment No. 241 is unnecessary. Provision for the courts to challenge, review and revise Opra's determinations already exists. The arrangements provide an appropriate means of redress for interested parties who believe that an order made by Opra to modify pension scheme rules was made in ignorance of a material fact, is based on error, or is erroneous in law, or that a relevant change in circumstances has taken place since the order or determination was made. In such circumstances, under existing law, Opra would be called to account if it did not consider those factors. The amendment is therefore unnecessary. I freely admit that the provision is crucial, but it already exists in the 1995 Act. I hope that my response has satisfied Opposition Members. If need be, I could give more details about the procedure that the 1995 Act requires Opra to follow and how Opra could be called to account. Mrs. Lait: I am grateful to the Minister for that explanation. I accept that the 1995 Act already makes provision for appeal to the courts. We are reassured by his comments. I could not imagine that a Labour Government would not allow appeals to the courts, despite the aspersions that were cast on my learned friends. In general, the Committee has been quiet during our discussion of pensions, but I am sure that it would not have remained as quiet if the appeal provision had not been in place. I beg to ask leave to withdraw the amendment. Amendment, by leave, withdrawn. Mrs. Lait: I beg to move amendment No. 242, in page 39, line 46, leave out subsection (9). I assure those civil servants who are listening to our discussion and those who read Hansard that I have no intention of attacking their pension scheme. I was a recipient of that pension scheme until I moved to the parliamentary pension scheme—I, too, have an interest in the public pension scheme. When I worked in the civil service, there was very high inflation under the Labour Government, of about 25 per cent.— Mr. Laurence Robertson (Tewkesbury): Twenty-seven per cent. Mrs. Lait: I stand corrected—it was 27 per cent. I was giving a broad-brush figure. I was asked how I could justify the civil service index-linked rules. I discovered—I hope that this is no longer true, although it was the case in the 1970s—that the reason that the civil service could afford the scheme was that civil servants are so devoted to their jobs that about 50 per cent. of them had died within two years of retiring. That is the most appalling statistic and I sincerely hope that the situation has improved. That was the justification that was used to explain how the Great British public could afford to index link the public pension scheme. I was reminded of that fact by an article that recently appeared in Money Mail. For those who have not read that journal, I am afraid that I have sad news for civil servants—there is a plan to close the pension fund and to put civil servants in the same position as the many people who are in a closed pension fund. The plan is to introduce a money purchase scheme. The public sector pension fund will be similar to other occupational pension funds, and it will suffer all the problems that are associated with those funds, including difficulties in winding up or with trustees. I hope that the civil service will not experience difficulties in securing taxpayers' money to pay pensioners. One could argue that the public sector pension fund should be brought under the Bill's provisions because it will be similar to an occupational pension fund and will experience similar problems. That might suggest a way to solve some of the problems that the police and the fire brigade have with their pension funds. Does the Minister believe that there are stronger similarities between the civil service pension fund and a private sector occupational pension fund than in the past? If so, should it be governed by similar rules to occupational pensions?
3 pmMr. Rooker: The hon. Lady tempts me to have a debate about the differences between public and private sector schemes. I did not know that she was a former member of the civil service pension scheme. I know that she has had two spells as a Member of Parliament, but I have forgotten when she entered the House— Mrs. Lait: 1992. Mr. Rooker: She would therefore have been present, and would clearly have voted for what is now section 72 of the Pensions Act 1995. Mrs. Lait: I was on the Committee. Mr. Rooker: The hon. Lady probably spoke to it. Under that section, public service pension schemes can be modified by a Minister or the relevant Government Department. The powers given to Opra in the narrow area of winding up as a result of insolvency are therefore already in existence, because they are exercised by a Minister of the Crown or a Government Department. Public service pension schemes are set up by statute, and their framework is totally different from that of private sector schemes. I accept the point about the fire service pension scheme: one of the people running the scheme in the west midlands, which is a huge area, said that there was a danger of becoming a pension scheme that occasionally fights fires instead of a fire department that runs a pension scheme. All hon. Members are aware of the problems of the fire service pension scheme, which are the same as those of the police pension scheme. Although I feel accountable as a Member of Parliament and a Minister, my Department does not run those schemes. There is no plan to wind either of them up as a result of insolvency. I am neither a lawyer nor a parliamentary draftsman, but given that the relevant powers are already available to a Minister of the Crown or Government Department, I am not sure why the Bill should say, ``Opra cannot do that''. Opra clearly cannot do that, because someone else does it. However, it is necessary for the drafting to be specific on what Opra can and cannot do. That is the reason for subsection (9). That explanation may be inadequate, as I have nothing more to add, but I hope that the hon. Lady will withdraw the amendment.
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