Sam Dunn: So the Government thinks it can dodge all the blame for company pension disasters ... no one else does
Sunday 19 March 2006
In a move that would have impressed Harry Houdini, the Government has picked its way out of what looked an inescapable bind.
Despite the devastating report last week from Ann Abraham, the Parliamentary Ombudsman, into the Government's role in the failure of final-salary occupational pensions, ministers wriggled out of two weighty chains: compensation claims and responsibility for the mess - (see page 19).
Their escapology was far from elegant - a blunt rejection of Ms Abraham's most damning conclusions that government advice to the public was flawed and that it failed to listen to actuarial warnings about inadequate funding for company schemes.
Stephen Timms, the minister for pensions reform, said the responsibility "must fall on those companies ... and trustees" instead. Government leaflets on the subject were "intended to be simple and introductory" and didn't claim to "offer comprehensive advice", he added.
Shock and anger greeted this attempt to walk away from blame. Agitated MPs, many of whose constituencies contain companies whose schemes failed, now hope to force the Government to review its decision and shoulder some blame.
There is also much speculation that, in a bid to appear as a charitable white knight, Chancellor Gordon Brown will pull some extra money from the hat during Wednesday's Budget to help out the most hard-up.
But this shouldn't deflect attention from the evidence of maladministration that Ms Abraham says she found. Regardless of Mr Timms's opinion, judge these choice morsels from her report yourself.
In March 2002, the then pensions minister, Malcolm Wicks, said: "... legislation that is in place is to ensure that the pension rights that individuals have already built up in schemes are protected ..."
In the same year, a leaflet called "Occupational pensions: your guide for ordinary workers" was published by the Department for Work and Pensions. "You would be better off joining [a company scheme]," it said, adding that they were "usually a very good deal".
And critically, in a section entitled "How do I know my money is safe?" the leaflet made it clear that "you are protected by a number of laws designed to make sure schemes are run properly".
Yet any workers who followed this guidance, and then found themselves with a fraction of their pension entitlements because their firms went to the wall, cannot blame the Government.
Mr Timms argues that the report does not take proper account of the intention of the leaflets to "be simple and introductory".
There is also no evidence, he adds, that all of the complainants (who wrote to the Ombudsman about their pension rights, sparking the investigation) read any of the literature.
Which begs the question. Why did the Government print it in the first place; if its information was pointless, why bother?
If it was worth something, then last week's government protestations that the information was nothing more than basic pensions guidance rings rather hollow.
Amid the recriminations, it's worth remembering that companies which go to the wall usually do so under their own steam - and that a privately funded pension without enough assets to meet its obligations is a concern chiefly for the employers.
But when, as revealed by Ms Abraham's report, the Government has had a clear hand in these problems - through general advice given to staff and maladministration of pension funding levels - there is a degree of blame to be taken.
That it has washed its hands instead is just one of the "dreadful indictments" of this Government, says Ros Altmann, a pensions consultant and former No 10 pensions adviser.
How can any worker ever trust a government's words on pensions? she asks. And all this ahead of the planned National Pension Savings Scheme organised by, you guessed it, the Government. This car crash just doesn't end.
Mark Dampier: 'We're on our own in retirement. They've pulled pensions to pieces'
Questions of Cash: I don't use Amazon Prime, but my credit card bill says I do
Buyers beware of new-build home headaches
Donald MacInnes: 'I have to have £500 a month spare from now until at least 2035'
HSBC becomes first bank to offer five-year fixed rate mortgage with interest rate under 2%
- 2 Rarest Beanie Baby of them all could be sold for £62,500 on eBay
- 3 Professional big game hunter Ian Gibson crushed to death by elephant during hunt
- 4 Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...
Day In a Page
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
This four-bedroom home has exposed brick chimneys and a vaulted ceiling in a breakfast room that's ideal for summer entertaining - the doors open to the patio and garden.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000