20 April 2007
The Government has defeated an amendment to the Pension Bill
backed by the Conservatives and the Liberal Democrats that would
have introduced a "lifeboat" fund to give more help to people who
lost money when their pension schemes went bust.
The Conservatives and Liberal Democrats both supported the
introduction of a "lifeboat" fund to offer immediate help to people
whose pension schemes collapsed between 1997 and 2005, by topping
up benefits to 90% of their expected pensions package. Such people
are currently being helped by the Financial Assistance Scheme, but
the opposition parties say its payments are slow and too low.
Long-term, the proposed lifeboat fund would have been funded by
collecting unclaimed assets within the pensions system, but it
would have received Treasury loans in the meantime to allow it to
start paying out immediately.
Fifteen Labour MPs, including five ex-ministers, backed the
amendment to the Pensions Bill in the House of Commons yesterday,
but it was defeated by 22 votes. The bill was given an unopposed
third reading and now goes to the House of Lords.
