Sam Dunn: So the Government thinks it can dodge all the blame for company pension disasters ... no one else does

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.

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

Finacial products from our partners
Property search
  • Get to the point
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

    SThree: Graduate Recruitment Resourcer

    £20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

    Recruitment Genius: Telesales Executive - OTE £32,000+

    £18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

    Ashdown Group: Marketing Manager - B2B, Corporate - City, London

    £45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Neil Pavier: Commercial Analyst

    £50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

    Day In a Page

    War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

    War with Isis

    Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
    Scientists develop mechanical spring-loaded leg brace to improve walking

    A spring in your step?

    Scientists develop mechanical leg brace to help take a load off
    Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

    Peter Ackroyd on Alfred Hitchcock

    Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
    Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

    Ryan Reynolds branches out in Woman in Gold

    For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
    Why Robin Williams safeguarded himself against a morbid trend in advertising

    Stars safeguard against morbid advertising

    As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
    The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

    UK horticulture industry facing skills crisis

    Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
    10 best compact cameras

    A look through the lens: 10 best compact cameras

    If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
    General Election 2015: The masterminds behind the scenes

    The masterminds behind the election

    How do you get your party leader to embrace a message and then stick to it? By employing these people
    Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

    Machine Gun America

    The amusement park where teenagers go to shoot a huge range of automatic weapons
    The ethics of pet food: Why are we are so selective in how we show animals our love?

    The ethics of pet food

    Why are we are so selective in how we show animals our love?
    How Tansy Davies turned 9/11 into her opera 'Between Worlds'

    How a composer turned 9/11 into her opera 'Between Worlds'

    Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
    11 best bedside tables

    11 best bedside tables

    It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
    Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

    Italy vs England player ratings

    Did Townsend's goal see him beat Kane and Rooney to top marks?
    Danny Higginbotham: An underdog's tale of making the most of it

    An underdog's tale of making the most of it

    Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
    Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

    Steve Bunce: Inside Boxing

    Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police