David Prosser: Memo to Government: shame on you

The refusal by ministers to properly compensate 85,000 people who have lost their pensions was shocking enough, even before this week's report by the Parliamentary Ombudsman.

Now that Ann Abraham has ruled that the Government wrongly advised people that their pensions would be safe, its position is indefensible.

Forget the bluster from pensions ministers such as John Hutton and Stephen Timms in recent days. The facts of this case are straightforward - and only two issues really matter.

First, for many years, the Government published leaflets advising members of final salary pension schemes at work that their benefits would be "guaranteed" and "protected by law". Second, 85,000 people lost some or all of their savings when their employers went bust and their pension schemes turned out not to be secure after all.

It seems an open-and-shut case. On the one hand, the Government urged people to join pension schemes and save for old age, and promised them it was safe to do so. On the other, the life savings of thousands of people later disappeared.

No one disputes these facts. Hutton and Timms argue that the Government never intended people to act on its guidance and that savers should have taken independent financial advice first.

Leaving aside the fact that, at the time, the Government was accusing thousands of independent financial advisers of mis-selling personal pensions - which was hardly likely to encourage people to go back to them for more advice - do ministers really think this is a credible defence?

Put it this way; can you imagine the Government letting a private company off the hook in this fashion? If you or I were to advise someone, in a professional capacity, to invest thousands of pounds in a venture that subsequently went belly-up, do you think we'd be allowed to walk away from the mess scot-free?

In the 40 years since it was set up, the Parliamentary Ombudsman's office has never had its recommendations ignored in this way. But maybe the Government is preparing to take a stand. The Ombudsman is also investigating whether the Government is partly to blame for the Equitable Life débâcle - if Abraham finds ministers at fault in her report later this year, she could again recommend compensation for savers. Will ministers dismiss her views again?

There are very sensible arguments for a Government change of heart. This stance hardly encourages people to save for the future, for one; and taxpayers will have to pick up extra costs in any case, because many of these people will now be reliant on state benefits.

Above all, however, what ministers have done is plain wrong. It is a shameful betrayal of people who did their best to provide for the future. The moral case is the most damning of all.

nnn Having castigated credit-card companies when they're up to no good, it's only fair to praise them when they do better. So, congratulations to Barclaycard for its mobile-phone initiative. The lender has offered to send text messages to all its nine million customers each month, warning them when they have five working days left to settle bills. It will also do more to warn of the dangers of only making minimum payments.

Now, if Barclaycard could just be persuaded to give up credit-card cheques, I might even forgive it for its uncompetitive interest rates.

Independent Partners: 10 top tips for retirement. Get your free guide here

Voices
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appeal
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
Arts and Entertainment
Caroline Flack became the tenth winner of Strictly Come Dancing
tvReview: 'Absolutely phenomenal' Xtra Factor presenter wins Strictly Come Dancing final
Sport
Ched Evans in action for Sheffield United in 2012
footballRonnie Moore says 'he's served his time and the boy wants to play football'
PROMOTED VIDEO
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

    $200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

    Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

    $125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

    Sheridan Maine: Commercial Finance Manager

    Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Sheridan Maine: Regulatory Reporting Accountant

    Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Day In a Page

    Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

    Amir Khan attacks the Taliban

    'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
    Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Could cannabis oil reverse the effects of cancer?

    Could cannabis oil reverse effects of cancer?

    As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
    The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

    The Interview movie review

    You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
    Serial mania has propelled podcasts into the cultural mainstream

    How podcasts became mainstream

    People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
    Jesus Christ has become an unlikely pin-up for hipster marketing companies

    Jesus Christ has become an unlikely pin-up

    Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
    Rosetta space mission voted most important scientific breakthrough of 2014

    A memorable year for science – if not for mice

    The most important scientific breakthroughs of 2014
    Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

    Christmas cocktails to make you merry

    Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
    5 best activity trackers

    Fitness technology: 5 best activity trackers

    Up the ante in your regimen and change the habits of a lifetime with this wearable tech
    Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

    Paul Scholes column

    It's a little-known fact, but I have played one of the seven dwarves
    Fifa's travelling circus once again steals limelight from real stars

    Fifa's travelling circus once again steals limelight from real stars

    Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
    Frank Warren column: 2014 – boxing is back and winning new fans

    Frank Warren: Boxing is back and winning new fans

    2014 proves it's now one of sport's biggest hitters again
    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture