Peter Hain is the sixth Labour Secretary of State for Work and Pensions to be faced with the thorny problem of the 140,000 people who lost their lifetime savings through absolutely no fault of their own. He therefore deserves congratulations for saying yes to a just settlement for these victims of collapsed occupational pension schemes, after Alistair Darling, Andrew Smith, Alan Johnson, David Blunkett and John Hutton each said no.
Still, Mr Hain's defence yesterday of the endless delays in coming up with a reasonable settlement for these people it has been more than five years since the scandal broke was much less to his credit. To paraphrase, he said the Government had been sensible to take its time getting to the correct decision, and that while people might have wanted a speedier resolution to this affair, ministers had got to the right place in the end.
Quite. Among those people who might indeed have wanted justice more quickly are those pension losers who have not lived to see this day and there are plenty of them. The thousands of savers forced to depend for years on meagre state benefits, or to work on into retirement presumably would also have liked the wheels of justice to grind just a shade less slowly.
As for the idea that the Government was always keen to do the decent thing but wanted to be absolutely sure what that decent thing was well, that's just embarrassing. Let's get one thing straight. This Government has been dragged kicking and screaming into compensating savers properly. As Chancellor of the Exchequer, Gordon Brown rigidly opposed a reasonable compensation package. Mr Hain's predecessors at the DWP, whatever they counselled privately, were each told to toe the party line and refuse to pay up.
Mr Hain's immediate predecessor, John Hutton, deserves singling out in particular for his unprecedented decision to ignore the findings of a Parliamentary Ombudsman inquiry into lost pensions. The Ombudsman had concluded that not only were ministers under a moral duty to do the right thing, they also bore legal responsibilities, because during the 1990s the Government had published misleading advice about the safety of final salary pension schemes.
Mr Hutton's response to the report made parliamentary history. For the first time ever, a minister said simply that he did not agree with the Ombudsman's findings and booted them into the long grass.
Not that the Ombudsman was alone in official efforts to call the Government to account. It has also been on the wrong end of rulings from the House of Commons Public Administration Committee and a High Court judicial review. Nothing would persuade ministers to cough up.
Even the wishes of a majority of MPs in the Commons were ignored. The Financial Assistance Scheme was launched by Andrew Smith three years ago after a backbench alliance of MPs from all parties threatened to veto the Government's entire pension reform package unless the victims of the scandal received help. Mr Smith's last-minute offer of the FAS saved his legislation, but as soon as anyone got to see the small print it became clear that the proposals would help no more than a few hundred victims.
So why, yesterday, did we suddenly get this U-turn? One reason was the delivery of a report by the Government actuary, Andrew Young, who concluded that better managing the assets left in the defunct pension schemes would produce huge benefits that could be used to help savers.
Another knotty problem for the Government was that, having promised to bail out savers with Northern Rock within precisely five minutes of the crisis breaking, its rejection of pension savers' claims finally became impossible to defend.
However, the fundamental answer is that ministers have finally begun to realise that the Pensions Action Group, led with such energy by Dr Ros Altmann, a former adviser to Downing Street on pensions, had no intention of ever letting this issue drop. Ministers have been embarrassed not only by a series of clever PR stunts, but also by their abject failure to provide any convincing counter to Dr Altmann's arguments (she recommended the Andrew Young solution more than two years ago, for example).
Dr Altmann deserves all the congratulations in the world for the victory that her tireless efforts have produced. So do all those members of the Pensions Action Group who have stood on the front line with her. Truly a great day for them and another shaming moment for a Government that has taken so long to do the right thing.
ID fraud continues to haunt us
Oops. Also in the doghouse are executives at the insurance company Norwich Union, yesterday fined 1.26m by the Financial Services Authority for security lapses that enabled identity thieves to steal 3.3m from customers. The FSA said procedures in one department of Norwich Union had been so slack that fraudsters had been able to glean from staff confidential account details in more than 600 cases. The insurer admitted 74 customers had subsequently been robbed, with savings policies illegally encashed and transferred to criminals' banks.
On the plus side, Norwich Union has now apologised and compensated all those customers who lost out, so no one is permanently out of pocket.
Even so, this is another embarrassing data protection loss for the financial services industry. In the last two years alone, BNPP Private Bank, Nationwide Building Society and Capita Financial Administrators have each been hit with hefty fines following security failures (though none bears comparison with the humiliating events still rocking the FSA's civil-servant colleagues at HM Revenue & Customs, or the admissions yesterday from driving test centre staff).
Each time one of these cases crops up, the company in question swears it has improved procedures and the FSA promises to come down like a ton of bricks on the next lot daft enough to get caught out. Trouble is, the rewards for successful fraudsters are huge they certainly dwarf the salaries paid to humble financial services administrators. The regulator only has so many fingers with which to plug the holes in this leaky dam.
Blood on the high street
Conflicting reports yesterday from the penultimate shopping weekend before Christmas. In the gloom-and-doom corner, the research group SPSL said that the number of shoppers on the streets of the West End was down by up to 4 per cent on Saturday, compared to the same day last year. More positively, the Retail Footfall Index showed shoppers across the country were at least turning out in greater numbers than at any time so far in the run-up to Christmas by up to 9 per cent, week-on-week, in some areas.
As ever, retailers are pinning all their hopes on last-minute discounting pulling in a crowd of shoppers who have left Christmas late. Those hopes do not appear to be shared by investors, who marked shares in leading retailers sharply downwards yesterday.
Nor are the retail analysts any more confident Next and Debenhams were two of the worst fallers, following a downgraded forecast of their fortunes from Seymour Pierce.
My own evidence entirely anecdotal is that shoppers aren't keeping their hands in their pockets because of the more predictable factors, such as worries about the economy, or the rising cost of mortgage payments. Much more of a problem is that shoppers' finances have already been squeezed by high inflation not properly recorded in the Consumer Price Index. Even those old enough to be mortgage-free report horror at the rising cost of petrol, home energy, council tax and basic foodstuffs.Reuse content