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Blair raises hopes of pension compensation

Prime Minister Tony Blair has given his biggest indication to date that the Government will compensate workers who lost their final salary pensions.

In response to a question in the House of Commons last week, Blair said he was actively considering the position of people who have lost money in occupational pension schemes.

It is understood that Blair waited until Equitable Life had announced that it would not be suing the Government and the regulators before making the statement, to avoid encouraging compensation claims from Equitable policyholders.

A backbench rebellion of 294 MPs, including 206 Labour MPs, has been threatened if compensation is not offered to the estimated 60,000 workers from companies such as ASW, Dexion and UEF who have lost most of their pensions as companies have gone bust.

The extent of the Government&#39s commitment to compensating the workers is expected to be spelled out when the Pensions Bill goes to its report stage next week.

Blair said: “We are examining what we can do in such special cases and, in the context of the current debate on pension protection issues and legislation, I hope that we can come forward with the solution.”

Independent consultant Dr Ros Altmann says: “There is evidence that the Treasury and FSA knew that these workers&#39 pensions were unsafe but chose to tell them they were safe. If these workers had been told their pensions were not guaranteed then you can be sure that some of them would have transferred them out.”

Amicus pensions spokesman Julian Richards says: “Everyone agrees in principle that these workers should be compensated but how far back do you go? Is it just selected companies such as ASW or is it all people who have lost out from their final-salary pensions? We hope it is the latter.”

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