Julie Morgan MP

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.

Radical welfare review aims to help thousands back into work

Message from John Hutton, Labour's Work and Pensions Secretary

I wanted to drop you a line about the independent report on the next stage of welfare reform that Tony Blair, Gordon Brown and I published today.

Thanks to Labour's measures like the New Deal, changes to incapacity benefit and tax credits to make work pay, we have made real progress since 1997 — with 2.5 million more people in work, 900,000 fewer on benefits, and 700,000 children helped out of poverty. Compare that to the way Britain suffered under the Tories, when unemployment hit three million twice and one in three children were growing up in poverty.

But we all know there is a lot more to do, so it is vital we now find new ways to support the hardest-to-help into work.

The recommendations in David Freud's report, "Reducing Dependency, Increasing Opportunity", include:

• A central role for Jobcentre Plus with greater use of private and voluntary sector resources and expertise so harder-to-help benefit claimants receive more employment support, with a new focus on long term mentoring once people are in work;
• Greater personalisation of employment support, with higher financial incentives for organisations to target resources at the hardest-to-help;
• And matching increased support with greater obligations on claimants to look for work. In particular placing greater responsibilities on lone parents with older children to look for work once their youngest child reaches 12, rather than the current age of 16.

I think the report sets out a compelling framework for the next stage of welfare reform which we must now carefully consider and discuss. You can download it here — I would really welcome your views on the welfare reform issues he addresses.

Yours

John Hutton MP
Work and Pensions Secretary

ASW: The fight goes on

Julie has pledged to continue to fight the corner of former Allied, Steel and Wire workers who lost their occupational pensions when the company collapsed in 2002.

Following an announcement by the European Court of Justice last week that UK pension rules were "inadequate", Julie has tabled Early Day Motion 749, which has attracted 61 MPs' signatures since last Thursday alone. The EDM states:

That this House notes the judgment by the European Court of Justice that current UK measures to protect the expected pensions of members of occupational pension schemes in the event of their employer becoming insolvent are inadequate and unlawful under the requirements of the Insolvency Directive; further notes the terrible impact that the failure of successive governments in this regard has had on members of the ASW, UEF, Kalamazoo and other schemes and the estimated 125,000 pension scheme members who have lost their expected pensions, despite the £2.3 billion set aside for the Financial Assistance Scheme; believes that this situation is the fault of successive governments; and therefore calls upon the Government to take steps in the Pensions Bill currently before Parliament to ensure that those who lost their expected pension due to employer insolvency receive the pensions they saved for.

Julie said: "The Government has taken steps to ensure that this kind of loss of an occupational pension cannot impact so strongly on workers in the future with its new Pension Protection Fund; and there has been £2.3 billion put into a Financial Assistance Scheme for those who have already lost out. But I know that this is not enough.

"I have listened to those who have lost their pensions and they tell me of the misery which they and their families are going through. They worked for years, often decades, building up their pension for retirement. Now they have got to this point and the money is gone through no fault of their own. It is a running sore which I believe that this Government must help put right.

"There is a Pensions Bill currently before Parliament to which I hope to table an amendment to get ASW workers' pensions back. I hope to work with colleagues in the Commons to put right this ongoing injustice."

If you are an ASW pensioner affected by the collapse of the company in 2002 please do get in touch with Julie and let her know your views.