A pensions safety net for workers trapped in failed occupational schemes was cast across the UK last week.
The new Pensions Protection Fund (PPF), launched on Wednesday, aims to provide compensation for those in final- salary schemes whose employers go under. Funded by fees levied on every corporate scheme, it should raise around £150m in the first 12 months.
But critics warn that immediate claims on the fund by companies already in dire financial straits, such as MG Rover, could destabilise it before it's had a chance to get going. One company alone - the engineering firm Turner & Newall - has an estimated £875m deficit in its pension fund. Compensating its employees would severely test the PPF's mettle.
Only workers in final-salary company pensions - where retirement pay is based on length of service and salary - whose employer has gone bust from last Wednesday, 6 April, will qualify for compensation.
Those already retired will be assured their full pension if the company collapses, while those still at work will receive at least 90 per cent of their entitlements. A cap of £25,000 a year per person will be applied.
Employees with final-salary pensions in companies that went to the wall between January 1997 and 6 April this year - an estimated 60,000 people - will get nothing.
To help in these cases, the Government recently set up the £400m Financial Assistance Scheme (FAS), although this has been widely derided as inadequate. A consultation paper on the draft FAS regulations was launched last week.
Loan shark Bill scuppered
The Consumer Credit Bill, introducing tough rules to curb loan sharks and unfair credit agreements, has been dropped because of the general election.
The dissolution of Parliament has curtailed the time available to get the new legislation on to the statute books. The Bill had secured cross-party support but, after completing its reading in the Commons, it got "bogged down" in the House of Lords, according to Peter Hain, Leader of the House of Commons.
In a statement to MPs, Mr Hain expressed "great regret" that no time could be found to grant the legislation Royal Assent. However, he stressed that if Labour were returned to power, it would make sure the Bill was introduced.
The Consumer Credit Bill marked a much-needed reform of outdated credit laws dating back 30 years. It would have forced lenders to make credit fees clearer; allowed an "unfair credit" test to be applied on behalf of victims of exploitative practices (typically by loan sharks), leading to court action against lenders; and given the Office of Fair Trading powers to fine rogue companies.
Borrowers would also have been able to turn to the Financial Ombudsman Service in the event of a dispute.
The legislation was a public, not a private member's Bill, which means that the parties involved - consumer groups, banks and MPs - will have to start the whole process again rather than picking up where they left off. The Bill could be delayed by up to six months.
Supersized gas gripe
The gas and electricity consumer watchdog, Energywatch, has lodged a "supercomplaint" with industry regulator Ofgem.
Handing over evidence of "myriad problems ... of billing incompetence", Energywatch called for an investigation into suppliers' handling of fuel bills and the consequent financial difficulties for consumers.
Some 40,000 customers called its helpline last year to protest about bills - making up nearly two-thirds of all complaints to the watchdog.
Most gripes were over companies' miscalculations; failure to read meters and reliance on estimates instead; failure to deliver bills; and ignorance of customers' own meter readings.
"The industry has consistently resisted any reform, which is why we hope Ofgem will force through a radical overhaul of the billing process," said Allan Asher, chief executive of Energywatch.
Ofgem has 90 days to decide whether to launch a full investigation, pass the complaint to the Competition Commission or the Office of Fair Trading (OFT), or to reject it.
Meanwhile, the National Consumer Council has threatened its own supercomplaint over "shoddy service and rip-off charges" by garages. It has written to the industry's trade bodies to highlight the problems of missed faults, unnecessary work and charges for work not done. Unless change is forthcoming, it says it will go to the OFT.
Sales of equity individual savings accounts (ISAs) in February were barely 40 per cent of those recorded last year, figures from the Investment Management Association reveal.
The £86m invested - down from £210m - comes near the peak of the so-called ISA season as taxpayers rush to make use of their £7,000 allowance.Reuse content