Socialist Worker

House of Lords vote boosts pensions compensation campaign

Issue No. 2055

The government is under renewed pressure to improve compensation for the 125,000 victims of failed company pensions after it lost a vital House of Lords vote recently.

The Lords backed a plan to improve the fund that helps workers whose company pension funds were wound up without enough money to pay promised pensions in full.

The Pensions Action Group says, 'The bill, with the amendment, will go back to the Commons and be reconsidered by MPs. They can reject it again and it will go back to the Lords again and a game of ping-pong can develop.

'Ultimately the government can use something called the Parliament Act to discount the Lords' ruling, so it's not over by a long way.

'If included in the bill, the amendment would bring payments up to 90 percent of pensions entitlement and enable them to be paid from the age stipulated under the companies' schemes, rather than at 65.

'The next part of our campaign will be to persuade MPs not to reject the amendment for a second time. The score is now five-nil.

'The parliamentary ombudsman has found in our favour, the select committee found in our favour, the European Court found in our favour, the judicial review found in our favour – and now the House of Lords has found in our favour.'

Ros Altmann, a former treasury pensions adviser who has been helping the campaign for compensation, says, 'We hope this is the beginning of the final chapter.

'The government doesn't have a leg to stand on and the sensible thing for Gordon Brown to do is to accept the inevitable and draw a line under this as one of his first acts as prime minister.'

lMillions of people on low incomes – especially women – will get little or nothing from the government's planned top‑up pension scheme, according to the Equal Opportunities Commission.

Instead of improving the state pension, New Labour is proposing that from 2012 workers will be automatically enrolled in the Personal Savings Accounts scheme.

They will be expected to put 4 percent of their wages into the scheme. But for many, such savings would merely exclude them from means tested benefits.

Take home pay will fall because of the 4 percent deduction – but the only people to gain will be the government, who will pay out less in benefits.

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Tue 12 Jun 2007, 19:56 BST
Issue No. 2055
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