Work and Pensions Secretary Andrew Smith has admitted that the Government will consider offering discretionary assistance to the 60,000 pensioners whose pension schemes have been wound up.
Speaking in an Opposition half-day debate on Crisis in Pension Scheme Wind-Ups last week, Smith said he would not raise false hopes of compensation for people who have been left with little or no pension fund following the closure of their schemes. But he conceded that the Government is looking at offering discretionary assistance.
Shadow work and pensions spokesman David Willetts described the Government's efforts to address the crisis so far as feeble. He said the Government is effectively prescribing “fire insurance for people whose houses have burnt down” and claimed that the pension protection fund will be of little comfort to the thousands who have already suffered losses.
When pressed by Liberal Democrat work and pensions spokesman Steve Webb, Smith said the 60,000 estimate from independent consultant Ros Altmann and the Pensions Action Group for the number of pensioners and workers affected “seemed to be on the right scale” but he refused to estimate what the cost of compensation for this group could be.
The debate followed Smith's announcement of plans to introduce a “golden handshake” for people who work beyond retirement age to get an interest rate of at least 2 per cent above base rate if they defer state pension payments.
Smith said: “While I do underline that it might not be possible to do anything, we should not close off the opportunity of making some assistance available to some. The question of compensation does have implications of legal liability, which I do not accept. There is no doubt a case on human grounds.”