The government refuses to accept responsibility for the misery of 125,000 pensioners ruined when their company pension schemes collapsed.
Last week, within hours of a Court of Appeal verdict confirming the previous year’s High Court judgment against the government, the Secretary of State for Work and Pensions, James Purnell, sought leave to appeal to the House of Lords.
This is without doubt the worst example in my working lifetime of a government denying its responsibility for creating hardship - and it is severe hardship, having caused bankruptcies, suicides and deaths through a variety of illnesses among those affected.
Save for the future with a Halifax stakeholder pension
Destroying peoples lives and damaging democracy
What makes it even worse is that the government’s conduct has undermined the very institution created to resolve such issues, the Parliamentary Ombudsman, thus damaging the fabric of our democracy.
As the indefatigable Dr. Ros Altman has said again and again, the case is a slam-dunk against the government. Government leaflets clearly said workers’ pensions were safe.
During the 1990s, ministers made statements in Parliament that they knew to be false about the protection for pension funds introduced by new legislation. The Parliamentary Ombudsman took two years to delve into the issue and, in a comprehensive report published in March 2006, said the government had misled workers about the safety of occupational pension schemes and recommended full compensation.
Self-investing personal pensions: take control of your retirement
No, no and still no
The government rejected the Ombudsman’s report and refused to pay. Under pressure it created a ‘Financial Assistance Scheme,’ which so far has paid out tiny amounts and which provides a far lower level of compensation than today’s workers have.
After a High Court ruling last year, the government reluctantly raised the level of FAS compensation, but it is still below par. And, as Dr. Altman has emphasised (as did the Ombudsman), these people have not just suffered financially but have lost years of their life and their health, and often their homes. There is no compensation for this in the FAS.
That is why the pensioners, with Ros Altman’s help, have fought on through the Courts. Judgment against the government would entitle them to proper compensation for being misled by the government and losing their pension rights, their houses, their health.
Inheritance tax: find out where you stand?
Delaying the inevitable is deeply cynical as well as futile
Given the clarity of the Ombudsman’s report and the two court verdicts so far, it is scarcely conceivable that the House of Lords would reverse those judgments. The government’s continuation of the legal action is pointless. It is also wrong, since the longer a settlement is delayed, the more of these pensioners will die before getting the money they are due.
This is one of those rare issues where I believe writing to your MP will make a difference. Many Labour MPs are ashamed of the whole episode and would like the government to pay up.
The Lib-Dems and Tories are also in favour. The more of us who tell our MPs that this is what we want to happen, the more likely it is that the Secretary of State will be told to drop the appeal and pay up.
And once that happens, there will be no more lines of naked pensioners demonstrating at Labour Party annual conferences. That will leave a gap. Perhaps the campaign against too-skinny stick-insect models could take their place.
