The Pensions Bill returns to the Commons this week with amendments calling for Financial Assistance Scheme payouts to be topped up to the levels of the Pension Protection Fund.
They call for funds to be made available straight away through Treasury loans rather than through the current Financial Assistance Scheme administration system, which many victims have found to be bureaucratic and inefficient.
The FAS has so far only paid out £3m to around 1,000 people, although 9,000 are eligible for help now. The amendments call for administration of the FAS to be passed to the PPF.
The amendments were put down by 12 MPs, including Conservative leader David Cameron, LibDem leader Menzies Campbell and high-profile Labour backbenchers Frank Field and Alan Simpson.
Under the proposals, a lifeboat fund would be set up to ensure that payouts rose to PPF levels.
In the long term, they would be paid for through unclaimed pension assets but in the short term, loans from the Treasury would ensure that victims received payments straight away.
Pensions consultant Ros Altmann says: “These amendments are brilliant and if they were to be voted through, we could finally achieve a solution to this awful scandal. I hope that enough Labour MPs will vote with their conscience and for their constituents to force a change of policy.”
Conservative Shadow Work and Pensions Secretary Philip Hammond says: “We challenge the Chancellor to back our proposal to launch a lifeboat fund to help the worst-hit pensioners by immediately topping up their income. These people need help now, they cannot afford to wait until 2009 or 2010 for a Conservative Government.”