The Conservatives and Liberal Democrats intend to table amendments to the current Pensions Bill if the government refuses to act over the issue of compensation to thousands of workers who lost their pensions when their employers went bust.
It follows the result of the judicial review yesterday, where Justice Bean of the High Court ruled in favour of four pensioners who brought a case against the government for dismissing the findings of the Parliamentary Ombudsman’s report which was published in March 2006.
David Laws, Liberal Democrat Shadow Work & Pensions Secretary, called the decision - which found the government guilty of misleading the public with information their pensions were safe - a “fantastic 'David versus Goliath' victory for the pensioners who have fought for justice”.
He points out this is the “third strike” against the government's “disgraceful attempts to duck out of paying compensation”, following both the Ombudsman's Report and the Public Administration Select Committee report.
Laws says after three strikes the government must surely accept that it is out, and adds Ministers must now set out how fair compensation will be paid to those who lost their pensions after government maladministration.
But the Shadow Secretary warns if the government refuses to act after this decision the Liberal Democrats “will table an amendment to the Pensions Bill forcing them to act".
Nigel Waterson MP, Conservative Shadow Minister for Pensions, also says: "This is a great victory for these brave campaigners. The key finding of Mr Justice Bean was to quash the Government's rejection of the finding of maladministration. They should now apologise, accept the findings and get on with finding a solution to these people's legitimate claims."
He adds: "As David Cameron made clear at Prime Minister's Questions, we are willing to work with ministers to find a cross-party solution. We have also re-tabled the amendments to the Pensions Bill which we tabled at Committee stage. I hope they will attract cross-party support at Report stage."
Dr Ros Altmann, an independent consultant and former adviser to the government, says the judge stated the government must reconsider its rejection of the Ombudsman’s recommendations for compensation.
She says: “In other words, the Financial Assistance Scheme (FAS) must be re-thought, on the basis that the government is guilty. So far, the FAS has been little more than political spin, designed to pretend it is providing help, when in reality it has failed to do so.”
Altmann points out thousands of people are struggling without their pensions, tens of thousands have lost future pensions and yet just a few hundred people have actually received a penny of this assistance.
She believes the government’s behaviour has been “shameful and heartless” throughout the process as it has focused all its efforts on denying its role in this affair, rather than owning up to its mistakes and organising a proper rescue.
“Parliament must now act quickly to sort this out. Over half of all the MPs in the Commons have now signed Early Day Motions to support compensation. The government faces defeat, yet again, on this issue, as the Pensions Bill goes through the House,” warns Altmann.
And she points out the cost of compensation need not be frightening, as a “commitment of £100-£150m a year, for about 60 years, or a sum of £3bn set aside today would be enough to settle this matter once and for all. Taxpayers do not have to foot the whole bill, but Government must organise it”.
She adds: “So much taxpayer’s money has already been wasted on the FAS and also on defending this case in court, rather than using that money to provide proper compensation. There are billions of pounds in unclaimed assets that could be used. If Government has wronged people, it cannot just claim the cost of righting the wrong is too high - it has to find a way.”
Meanwhile, a statement issued by Ann Abrahams, the Parliamentary Ombudsman, says while she has taken note of the Court’s ruling which “quashed” the government’s decision to reject the findings of her report, and its direction to reconsider the issue of compensation, she is “currently considering the judgment, which we know is to be the subject of an appeal, and can make no further comment at present”.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7034 2681 or email [email protected]IFAonline
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