Cardiff turns the corner

In this article published in the House Magazine, Julie Morgan dares to hope that a High Court ruling on occupational pension collapses could help the cause of the Allied Steel and Wire workers of Cardiff

I have been campaigning for a long time to get justice for former Allied Steel and Wire (ASW) workers in my constituency, with great support from the unions Community and Amicus. About 1,000 workers lost their pensions when this private company went bankrupt in 2002, and 893 were from the Cardiff area.

First, it's important to say that the Government has responded. It set up the Pension Protection Fund, which will protect pensioners in this situation from now on, but which, of course, was not retrospective. And it set up the Financial Assistance Scheme (FAS). The additional money given to the FAS was, I think, a direct result of the campaign led by the workers (particularly by those from ASW) and by MPs led by Kevin Brennan, MP for Cardiff West.

When the FAS was originally set up, the scheme applied to members who had reached retirement age or who were within three years of doing so. In the pensions White Paper of 2006, the scheme was extended to those within 15 years of retirement, with total funding of £2.3 billion.

However, this still does not cover everyone and there is still a shortfall for many people. In January, there was a ruling from the European Court of Justice which said that even though the pension rules were "inadequate" in protecting the expected pensions of members of occupational pension schemes in the event of their employer becoming insolvent, the issue of whether the Government has to pay out is a matter for the British courts.

On February 21, I was very pleased that the High Court ruled that the Government should not have rejected the Parliamentary Ombudsman report by Ann Abraham into pension schemes that have collapsed, but unfortunately, this decision does not mean that the Government has to compensate workers for their losses. However, the ruling by Mr Justice Bean will mean that the Government has to rethink the issue of compensation.

In order to help the campaign along for compensation, I have tabled an amendment to the Pensions Bill which is currently before Parliament and due for Report stage after Easter. The amendment is aimed at giving equivalent support to those occupational pensions members who lost out when their companies collapsed, but who do not currently qualify for the Pension Protection Fund.

The Work and Pensions Secretary John Hutton has said that he will be making some new proposals in the Pensions Bill and I, for my part, want to have another go at persuading the Government to extend and improve the FAS so that justice can be done.

The issue of pensions for ASW workers is still a running sore and we shall continue to campaign until we get a just outcome.