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Senior Member
Join Date: Nov 2005
Location: Welwyn Hatfield (Herts.)
Posts: 1,878
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More Blair dishonesty - this time it's pensions
Telegraph
Quote:
Nonsense and lies - Blair's answer to Abraham
By Liam Halligan (Filed: 19/03/2006)
Guilty as charged - the stark conclusion of Ann Abraham, the highly respected Parliamentary Ombudsman. After an exhaustive 16-month investigation, she ruled last week that ministers did mislead the public over the safety of final salary pensions.
In recent years at least 85,000 workers from 400 companies have lost the pensions they were promised. Many, having paid INTO phpbb_their schemes for decades, have endured the heartache of ending up with nothing.
This "injustice", concluded Abraham, resulted from "government maladministration". Whitehall departments, over many years, issued leaflets reassuring the public that final salary pensions were safe even if companies went bust.
As well as paying compensation, said Abraham, ministers should "apologise" and make extra payments "as tangible recognition of the outrage, distress, inconvenience and uncertainty" suffered by those who had lost pensions they were told were secure.
New Labour has a well-deserved reputation for treating Parliament with disdain. But ministers plumbed new depths when, within minutes of publication, they "rejected" the Ombudsman's 254-page report.
No matter that her inquiry was sparked by hundreds of complaints from concerned members of the public. No matter the gravity of her findings - that official information on pension security was "inaccurate, incomplete, unclear and inconsistent".
No matter that she judged ministers to have acted against the advice of the actuarial profession when, in 1998 and 2002, they weakened the Minimum Funding Requirement, which was designed to make sure that final salary schemes were properly financed.
No matter that she criticised the Government for ignoring repeated professional warnings to tell the public their pensions might not materialise. Clearly, the Treasury's determination to push workers INTO phpbb_private schemes, so cutting costs to the state, outstripped any sense of fairness.
Since Abraham reported, the Government has compounded its guilt by propagating two deliberate falsehoods. The first is that official leaflets gave only "qualified advice" and did not state that final salary schemes were safe. They were "for general guidance only", says Stephen Timms, the pensions minister.
Nonsense. The advice was unequivocal. Take, for example, a leaflet published in 2000 by the Financial Services Authority, the Government's most important financial regulator. "Some types of employers' schemes," the leaflet said, "the ones called final salary schemes, give you a guaranteed pension".
Subsequent leaflets from the Department for Work & Pensions also used the word "guaranteed". It was only in 2004, after the media had reported numerous pension failures, that official leaflets were finally changed.
Ministers now claim there is no evidence that government advice influenced any decisions to pay INTO phpbb_company pensions. But back in 2000 Alistair Darling, the pensions secretary at the time, told Parliament: "The public rely on government information and are entitled to be reassured that leaflets are accurate and comprehensive".
The second falsehood - again, an attempt to discredit the Ombudsman's case for compensation - is to grossly overstate the cost. "We have been asked," Tony Blair told MPs last week, "to give a £15bn commitment".
Again, this is nonsense. This figure appears nowhere in the Ombudsman's report - to claim that it does is deeply disingenuous. "We don't understand where Mr Blair got this estimate from," says my mole in Abraham's office. "It seems very inflated to us."
That's because it is. John Ralfe, one of Britain's leading pension analysts, says buying annuities for each of the 85,000 people who lost out would cost more like £7bn.
Ros Altmann, another expert who campaigned for Abraham's inquiry, says even this is an overestimate. "It would be ludicrously bad value to buy annuities for these victims," she says. "Far better to use the assets left in the failed schemes to pay pensions on an ongoing basis".
That would bring compensation costs down to £4bn over 40 years, says Altmann - and many pension professionals agree with her. So we're looking at £100m annually - or less than £2 per citizen.
Given the importance of restoring public trust in pensions - and government advice on pensions - this annual cost, a fraction of the Treasury's £3bn contingency fund, represents exceptional value for money.
"I must ask why we have to rely on the Parliamentary Ombudsman to confirm the Government's mismanagement, maladministration and incompetence." So said Gordon Brown in 1989. As shadow industry secretary, he was attacking ministers over the Barlow Clowes scandal - when, again, the Ombudsman blamed the Government for bust pension schemes.
Back then, Brown railed against "the fecklessness, gullibility and incompetence of the Government, which for months and years ignored all warnings". Today, the chancellor presents himself as the future leader of our country. To be taken seriously, he needs - for once - to swallow his pride, admit that mistakes were made and implement Abraham's recommendations in full.
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Another opportunity for a UKIP press release.
As usual, I'm not holding my breath.
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19-03-2006, 03:17 PM
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