Prime Minister’s answers to David Cameron at Question Time
by Dr. Ros Altmann
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COMMENTS ON EXTRACTS FROM PRIME MINISTERS QUESTIONS 25 APRIL 2007
FULL TEXT OF PMQs ON FAS 25/4/07
Mr. David Cameron (Witney) (Con): I wish to return to the subject of the 125,000 people who lost their occupational pensions when their pension schemes collapsed. In the last week, the Minister for Pensions Reform has said explicitly that all those covered by the financial assistance scheme will get 80 per cent. of their pension. Vitally, he said that that 80 per cent. level of support will be from the taxpayer and will not depend on unclaimed assets. Of course, we would like 90 per cent. to be paid.
Given that thousands of those affected have already reached retirement age and are not getting the 80 per cent., will the Prime Minister look again at the issue of a Treasury loan so that he can start to make those payments straight away?
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The Prime Minister: Let us nail down the issue of 80 per cent, 90 per cent. or 100 per cent. I am sure that we would all like to give everyone 100 per cent. of what they want all the time, but it has to be paid for. Even with a payment of £8 billion, we can only afford as much as 80 per cent. We are prepared to look at any measures, and we have looked at the Treasury loan idea. Having looked at it, we do not think that it is a suitable or correct way to try to provide that help. In the end, it all has to be paid back. It is like the right hon. Gentleman’s policy on unclaimed assets. We are happy to look at the issue and in the next few months we will report on it, but I cannot make promises to people on the basis of some unspecified Treasury loan that would have to be paid back or the idea that there is a pot of gold lying about in bank accounts, building society accounts or pension fund accounts that we can lift up and give to people. Life does not work like that.
Mr. Cameron: I do not think that the Prime Minister understands the point. Many of those people have reached retirement age. Some of them, such as my constituent John Brookes—who is 67, has leukaemia and paid into a company pension scheme for 40 years—are desperately in need of the money. Given that the Government have said that he will get 80 per cent. of his money anyway why not use a Treasury loan and start the payments now?
The Prime Minister: That would have a financial consequence, which we would have to meet. I am totally sympathetic to the right hon. Gentleman’s constituent and to others, and it is only under this Government that any help has been available to people in those circumstances I am happy to correspond with the right hon. Gentleman about the problems with the Treasury loan idea. What I will not do is say to his constituent or any others that I will promise something unless I am sure that we can actually deliver it within the financial means that the Government have.
ROS’ COMMENTS ON THE REPLIES GIVEN BY THE PRIME MINISTER
The Prime Minister said:
Even with a payment of £8 billion, we can only afford as much as 80 per cent. It is not £8billion and not 80%!
we have looked at the Treasury loan idea. Having looked at it, we do not think that it is a suitable or correct way to try to provide that help. In the end, it all has to be paid back. The Government apparently thinks that the FAS is the right way, but the FAS has failed, so, with respect, we need a bit of new thinking here. There are two problems, firstly that the FAS level is not adequate because it is worse than PPF, but more importantly the FAS is not paying out to those who desperately need it. The Government could address both these issues at once. Let’s think clearly here: people need the money, Parliament agrees that anything less than PPF level is unfair, we know that the FAS has not managed to get the money to people, so here is practical alternative. Allow the trustees to pay out PPF benefits straight away and use emergency funding for members whose trustees do not have the money. The FAS level of payments has already been guaranteed, so we are just in need of a top up from FAS to PPF level, which should be no more than £30m a year. We know there are billions of pounds in unclaimed assets and the Chancellor has already earmarked some of these, but there are plenty more. Therefore, the sensible and morally right thing to do is to pay the PPF level to all the pensioners who need it now, fund that with a bridging loan from the Treasury if needs be, and then collect the assets in as soon as the mechanisms are in place. What is not right is to make the victims wait even longer for their money, my constituent may not have the time. We all know the unclaimed assets are there and we can take an example from Ireland which has collected significant sums in this way.
It is like the right hon. Gentleman’s policy on unclaimed assets. This is also the Chancellor’s policy – he has used some of them for youth projects already but there are plenty more which Government can access if it wishes to.
We are happy to look at the issue and in the next few months. This issue has been looked at for years, the review is just a way of stalling, we know the money is there and the Chancellor has already earmarked some.
Life does not work like that. Oh yes it does! How do you fund MPs pensions then, you make a commitment because you have an obligation and then the money has to be found. In this case, we are also saying that the commitment can be met from sources outside the Exchequer, but we cannot seriously claim, as a Government, that we cannot meet our obligations to these people to provide a fair settlement.
Government have said that he will get 80 per cent. of his money anyway Firstly, the FAS does not pay 80% of his pension and secondly, it is not justifiable to pay less than the PPF level. This needs to be paid now, with trustees paying out from assets if they still have them, or Government paying on an emergency basis if not. The Lifeboat Fund would recognize the urgency of this and that it is Government responsibility
The Prime Minister: …only under this Government that any help has been available to people in those circumstances It is only under this Government that such a scheme was needed! Maxwell was sorted within weeks for the member and then Government took a few years to find more money. This should be looked at differently. We have a problem, we have been found guilty, we have to pay. Then how can we mitigate the costs to the taxpayer longer term? We cannot just make the victims wait until we manage to find some money lying around somewhere, they have waited long enough. We have to organize a proper rescue – and clearly the FAS is not a proper rescue scheme – and use our powers as a Government to fund it in the best way.
deliver it within the financial means that the Government have. Come on, the Government obviously has the means to pay £20-£30m a year. The affordability argument is just an excuse. The Review needs to look at HOW to do this, not WHETHER it can be done. We all know the assets are there and we all know the Government has to find a fair solution for these people. The fact is that they need to be rescued now, not in a couple of years time.