Tony Lloyd (Manchester, Central)

5.35 pm

I certainly hope that Opposition Front Benchers have taken note of the comments of my hon. Friend the Member for Cardiff, West (Kevin Brennan). If any package can be made available to rescue the 60,000 people whose various schemes have been abandoned, we need all political parties to make it clear that they would support movements in that direction. It would be irresponsible to make party politics out of something that is based so centrally around individual human tragedies. I would like to hear something about that when Conservative Members make their wind-up speeches.

In common with many of my hon. Friends, I should like to step back from the immediacies of the Bill to say that the Government have gone a long way towards helping people who are already pensioners. Pension credit actually works: it is not a means test, but it needs identification, which is a very different process. Labour Members are proud of the fact that we are now helping many millions of pensioners. There are many pensioners in my constituency, and pension credit makes a material difference to their lives. I trust that we shall intensify our efforts to find imaginative ways of helping people with particular needs.

I want to tell the Minister that we nevertheless need to examine the basic pension in our society. It is not high enough, even though the Government have made some increases. If we look at the projections for gross domestic product spending on state pensions, we find that they are at a fairly low level—about 5 per cent.—by western European standards. The projections for the next 50 years are worrying. My hon. Friend the Member for Aberdeen, South (Miss Begg) made the point that many people, particularly women, do not benefit from the state pension. About six out of 10 women do not have occupational pensions, and about one in six do not have full access to the state pension. We need to examine access to the state pension more fully: with the continuation of differential incomes in our society, the state pension will remain an important part of many people's basic income in retirement. I therefore hope that we can look into the whole basis of funding the state, as opposed to the occupational, pension in the round.

Like many of my hon. Friends, I hope that one of the consequences of the present review of the pension system will be a commitment to compulsion in pensions. Without it, the 20-year-olds mentioned by the hon. Member for Chesterfield (Paul Holmes) will take decisions based on short-term gain, when we need to persuade them that it is in their best interest to make contributions to the pensions system.

I want to join the call from hon. Members on both sides of the House for a proper rescue package. My hon. Friend the Member for Cardiff, West made a powerful moral, economic and legal case for providing it. The Government should consider seriously the fact that the law is likely to push them in a particular direction anyway, so it would be far better for them to get there first, long before the lawyers take a large slice.

We must address the question of trust in the private pension system. Hon. Members have talked about restoring trust in the system, but I do not think that there ever was much trust, as the odds have been stacked against employees in pension schemes for many years. Although the Labour Government have changed that balance, the Bill will finally begin to put some sanity into that equation. Even the professional advisers have let down pensioners. In the various schemes that have failed, it was not the professional advisers who made people aware that the situation was becoming dire. I do not want that to sound like an attack on all professional advisers, but those who represent the interests of long-term pensioners were not able to get access to information or to the trust structures that are important if we are properly to change the balance and restore confidence in pension schemes. I welcome the Government's commitment to proper employee consultation.

I hope that the Minister will make it clear in his winding-up speech or as the Bill progresses through the House that, with regard to nominated trustees, there will be a transparent and open process, so that employees are properly represented. I urge him to give proper recognition to the value of trade unions in this area. There should be no conflict between the political parties, as this is not a matter of trade unionists fighting for something that is against the interests of the employer. This is employees' money: deferred wages, as Labour Members have clearly stated. In that situation, the people who can give the best possible advice are from trade unions that have properly trained their trustees, can provide access to an adequate information base and have experience that is invaluable to people serving on boards of trustees.

The pensions regulator must be tough and competent, and will be well served if the regulatory process includes access to trade unions at the highest level to reflect the interests of working people through their representative organisations. This is not an ideological plea: just a commonsense recognition of the profound role that trade unions can play and have played across the pensions debate.

I should like to draw the Minister's attention to particular issues on which I hope we will have a change in the law, or at least a recognition in the Bill of the need for change. I urge him to consider the implications of the Bradstock judgment, which was a court judgment that ruled that when employers significantly change the

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terms of their debts to the pension fund, they can do so by negotiation with the trustees. I shall refer to two companies that did so, massively to the disadvantage of long-term pensioners.

The pension trustees at Merchant Ferries accepted a £400,000 payment in lieu of a debt of £8 million. The company argued that without agreement it would become insolvent. The trustees agreed—almost with a gun to their heads. Six months later, the company declared itself insolvent anyway, and the trustees lost all entitlement to the other £7.6 million. They were not even considered to be a creditor along with other unsecured creditors. That is not fair and it is not right. That situation could have been improved if the trustees had had to take the matter to the Occupational Pensions Regulatory Authority, as they no longer had to do under the Bradstock judgment.

I urge the Minister to provide that one of the duties of the regulator should be to examine the process of renegotiation by trustees, not because there are no circumstances in which the trustees should agree to such a change—perhaps they should, in the interests of the survival of the company—but because agreement should not be reached by the trustees if the work force whom they represent are in total ignorance of what is going on. I urge my hon. Friend the Minister to re-examine that matter.

Will my hon. Friend the Minister also closely examine the operation of the new TUPE arrangements? Although employee protection is welcome, where there is a transfer of undertakings the Bill will oblige employers to match employees' contributions up to the level of 6 per cent. That is a big improvement, but I urge him to re-examine whether contributions should be equivalent, because otherwise we will build in a financial incentive to companies to take over other companies, when we should simply be making sure that pension funds are economically neutral.

I wish my hon. Friend the Minister the best of luck with the Bill. As I have said, there have been no serious arguments against it, and it is important that the protections that it contains should be available to current and future pensioners.