Local Pension Schemes (BUSM)

A number of people have been affected by the collapse of their private company pensions schemes - like those at BUSM in Leicestershire.

Along with other Labour MPs I campaigned to seek some form of positive response from the government, during the passage of the Pension Bill, to form a compensation package for lost pensions.

Pension Bill Debate - why amendments were wrong

On the 18th April the Pension Bill came back to the House of Commons and this gave the opportunity for the government to write into the legislation the new rescue for the failed pensions schemes like BUSM. I welcomed this and the package - which went further than I had ever thought possible.

Some cynical amendments were moved to create an artificial political divide. They were amendments that were not properly thought through and certainly not properly costed or the money identified to pay for them. This is the worst cynical type of politics - playing to the gallery or campaign group knowing you don't have the means to fulfil your responsibilities. Being in government is about making the hard choices and balancing the thousands of competing demands. Quite rightly I, along with the majority of MP rejected this cynical approach for the reasons set out in the document linked below. It is therefore pathetic that MPs and the Leicester Mercury and certain constituents should call this decision hypocritical. The hypocrisy is those who tell people what they want to hear for an easy headline and raising expectation above those that can be delivered. I have always been clear and honest about the BUSM situation. Right from the start I have told local campaigners that I support their case but have never been convinced that it should be solely taxpayers money bailing out the collapse of private pension schemes. I remain firm in this and that is why I believe the government have done more than I have ever expected and certainly more than I have told campaigners to expect.

MP Leads BUSM Lobby to see Minister

Before the really welcome Budget announcement outlined below I had already arranged to take a group of Leicestershire BUSM pension campiagners to see Pension Minister James Purnell. Instead of having to lobby the Minister about the government stepping into help thos epensioners not provided for by the Financial Assistance Scheme we were there to lobby over exaclty how it operates and benefits my constituents! An excellent meeting at which further ideas for how we find other non taxpayer contributions to make up pension recovery to over 90%.

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Victory for BUSM Pensioners (March '07)

In yesterday's Budget, Chancellor Gordon Brown announced substantially increased compensation for those who lost out in the collapse of BUSM.

"I was not expecting a resolution to be found so quickly. This extension of the Financial assistance Scheme set up by this Labour government is really welcome news for those affected. They have heartbreaking stories to tell. There is a bit more work to be done to finalise the details and how to get up to 100% protection but nobody can deny this is a wonderful day.

I am now keen that the momentum is sustained and that individuals who are affected are given the opportunity to raise outstanding points directly with the Pensions Minister. This is why I have arranged a meeting with James Purnell for BUSM representatives from the constituency. This meeting will also be a useful opportunity for my constituents to understand how exactly the extension to the Financial Assistance scheme will operate."

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The Government Response to Today's campaign (7th Feb '07)

“We have every sympathy for people in this situation, and understand the distress this has caused them and their families. We have respect for the Ombudsman and considered her report into this difficult issue with great care.

“However, these were not pension schemes provided by the state - they were provided by employers. The trustees that ran them were not appointed by the Government. The Government did not underwrite these schemes or cause them to fail. We do not believe it would be fair to ask the taxpayer to fully cover the costs of these schemes collapsing.

“Nor do we believe there was a causal link between people’s losses and the general introductory information we issued, which contained a warning it was not a full statement of the law.

“We did not oppose the application for Judicial Review because we are content for these issues to be argued out in court.

“We do agree there should be a significant package of support, which is why we introduced the Pension Protection Fund and the Financial Assistance Scheme, which was recently expanded to provide more than £2 billion of help to people in this position."

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Updates / information on the local pensions situation

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Background

A number of people have been affected by the collapse of their private company pensions schemes - like those at BUSM in Leicestershire.

Along with other Labour MPs I campaigned to seek some form of positive response from the government, during the passage of the Pension Bill, to form a compensation package for lost pensions.

The government listened and responded:-

• A new Government amendment to the pensions Bill will offer significant help for people who have lost most – or even all – of their final salary pensions when their employer has gone bust.

• It is right that the Government is taking action to address the serious hardship caused in these cases.

• Doing so also boosts wider confidence in pensions – to everyone’s benefit.

Key Facts

• The Pensions Bill introduces a Pension Protection Fund (PPF) that will ensure that in future workers get a decent pension even if their firm goes bust.

• A new Government amendment will establish a Fund, which will help workers who have already lost out through pension wind-ups

• The Government will contribute £400 million of public money to be paid in over 20 years with the possibility of further contributions from industry. Details of the fund's operation will be worked out in consultation with stakeholders, and we will review the operation of the fund in three years time.

• As part of the process the DWP is completing its detailed research into the extent of the problem and the numbers of those affected and will consult on how assistance will be delivered including any further legislative changes that are required.

• As this will benefit not only those directly affected but also pension providers and the pension industry, we will work with key business representatives, unions and others on the various ways they may be able to help and whether they may now make a contribution.

Andrew Smith: “This will give real help to people who have lost their life savings through no fault of their own. I’ve met many of those affected and am convinced that taking action is the right thing to do – it will also be a huge boost to wider confidence in pensions.”