Contribution
My Lords, the amendments in this group are designed to give the Government another way of recognising the injustice that has occurred, which their very welcome amendments recognise for members who have lost their pre-1997 inflation protection. I am trying, through this route, to give the Government a way of increasing the amounts paid to people who have lost out on pre-1997 indexation in the past without the striking costs that the Minister suggested would be involved in retrospection and arrears for everybody in the PPF and the Financial Assistance Scheme.
The method by which this could be achieved is to offer lump-sum payments which do not increase the base cost of the pension but do recognise the losses suffered in the past. I hope that the Minister and her colleagues might be able to look favourably on this suggestion, which is another way in which the Government could put right what they have already recognised is a serious wrong.
If my amendments are accepted, the Pension Protection Fund reserve could be used alongside the Government’s welcome Amendments 186 and so on in the previous group. For anyone who is going to receive the prospective inflation protection in the future, the PPF reserve will or could be used to pay a lump sum to be determined related to the losses that they have suffered. That will be a one-off, or it could be over two or three years if so desired, to recognise the past problem to help the oldest people in a practical way and to ensure that there is some modicum of fairness, particularly for those who have the most pre-1997 accrual, who, as I have said, are the oldest.
My Amendment 203ZA is the same proposal for the Financial Assistance Scheme, but subsection (3) of my proposed new clause would allow specification, in consultation with the Pension Protection Fund, as to how this will be funded. Obviously, there is a significant reserve in the Pension Protection Fund. It has written to members, suggesting that there is affordability, and the ability to pay for some element of retrospection—again, to be determined. By the way, the Minister suggested that people would get what they paid for but, of course, with a 2.5% cap on CPI increases, many of them would have paid 5% going forward. So, it is not full retrospection or prospective protection for pre-1997.
I know that the Minister is proud of what the Government are doing, and I welcome it too, but her words that it does not go as far as some affected members would want are absolutely correct. I would say that it does not go as far as some affected members deserve, in the course of an argument about fairness and justice.
Are there any government estimates for the cost of these lump-sum payments, either one-off or spread over two or three years? It is probably easier administratively to make it a one-off, so that only one payment is required. That would also need to be protected in the same way that the new payment in other schemes is protected in terms of the tax system, so that it is not treated as an income in that particular year. If the Government were minded and able to accept the principle of recognising the past in a different way from the suggestion from the noble Lord, Lord Davies, which I also support if that were possible, it would not add to the long-term costs of running the Pension Protection Fund or the Financial Assistance Scheme. It will be a one-off recognition of the past and the future liabilities would be based on the pension as proposed now.
Do the Government have estimates for any possible size of payment that would be acceptable, so that we could then work backwards to finding a lump sum that could be paid and afforded out of the PPF’s obviously significant reserve? There is far more money than is required; it is just sitting there, whereas these pensioners really need the pensions that they paid for and are getting nowhere near. I hope the Minister might be able to help, or I am happy to meet and see whether we can work through some figures that might be acceptable as a way forward to recognise the past and satisfy a number of the people who are seriously ill and may not live to next April or much beyond it and feel so aggrieved—having campaigned with me for years to help people, get the PPF started and improve the Financial Assistance Scheme—that they are not getting the recognition that younger people who are benefiting from their hard work will get. I beg to move.