Announcing an all-night vigil outside Downing Street

by Dr. Ros Altmann

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Desperate pensioners out on the streets 
Downing Street All Night Vigil 20th/21st November

Double standards of Northern Rock rescue – Shame on you, Gordon!

Desperate members of the Pensions Action Group will be outside Downing Street in Whitehall tomorrow evening, arriving at 4pm on Tuesday 20th and staying through the night until 10am on Wednesday 22nd November.  At 8pm they will deliver a letter to the Prime Minister and the Chancellor, asking Gordon Brown and Alistair Darling to come out of the warmth of Numbers 10 and 11 to explain why, after so many years of suffering and so many verdicts in their favour, they are still waiting for pensions justice.  While Northern Rock savers are 100% safe – at taxpayers’ expense – the nation needs to know that the company pensions scandal is still dragging on, month after month, as more of the victims fall ill or die. 

There will be photo opportunities and interviews available to hear the heartbreaking stories.  Please come along to help highlight this situation for the country to see what is happening.

There will be workers and widows, some in wheelchairs, who have become ill with stress and exhaustion or whose husbands died without their pensions.  How can this be happening in New Labour’s 21st Century Britain.  They will demand to know what action the Government will take to finally end their suffering.  How much longer do they have to wait?

Earlier this year, the Government set up a review – led by Andrew Young – to identify whether it can find more money to put into the Financial Assistance Scheme, without much burden on taxpayers.  This is expected to report at the end of November.  But Northern Rock investors did not have to wait for any reviews! 

The victims are holding this vigil, ahead of the Young Review report, to warn the Prime Minister not to try to get away with any more spin and deceit over this issue.  In July 2007 he refused to pass House of Lords Pensions Bill amendments which would have immediately provided a fair settlement of this scandal.  The Government said it could not spend taxpayers’ money on providing compensation.  It is now November and the victims are still waiting.  Meanwhile, investors, who were never told by the Government to put their money in Northern Rock, and were never told their savings were completely safe, have been rescued in full, at once, at taxpayers’ expense. 

125,000 workers were told by this government that their pensions were secure and protected by law, whatever happened to their employer! This was not true. Between 1997 and 2004, many of those close to retirement, who saved for decades, suddenly found they will get no pension at all.  So they are still working in physically demanding jobs well past their expected retirement age.  They have received no pension despite original promises of Government protection and subsequent announcements of a Financial Assistance Scheme (FAS) which started in 2004, but has been an administrative shambles and is not paying out to most of those past pension age. 

The Government has admitted that it only needs around £20m a year to improve the Financial Assistance Scheme payments up to the levels paid by the much more generous – and efficient – Pension Protection Fund (PPF).  The PPF is already paying out to all pensioners whose schemes failed since 2005.

All the Opposition parties, some brave Labour MPs and the media have called for a fair, fast resolution of this scandal, to improve the Financial Assistance Scheme to at least PPF payment levels.  There are no more excuses that can justify the cruel treatment of these good people.  And how does the Government expect anybody to trust pensions in future, if these people are left begging for justice for so long?

This is an ideal test for Gordon Brown.  If the Prime Minister really wants us to believe he will listen to the will of the people and the authority of Parliament, then he must immediately agree to settle this scandal properly.  So far, he has refused to admit any responsibility for his pension failures and has refused to comply with the rulings of the Parliamentary Ombudsman, Parliamentary Public Administration Select Committee and UK High Court Judicial Review.  If he wants anyone to trust him in future, he must settle this scandal NOW.  

For further information contact:

Dr. Ros Altmann – 07799 404747
Peter Humphrey – 01442 403356

ENDS

Notes for Editors
 
1. The Pensions Action Group is a non political organisation representing people who lost most, in some cases all, of their occupational pensions when their pension scheme was wound up, either because their employer became insolvent or the employer, (perfectly legally), decided to close the scheme.

2. After 1997, these members of final salary pension schemes were assured by the Government that their pensions were totally safe and protected by new laws.  Even after Alistair Darling and Gordon Brown were warned by the actuarial profession in 1999 that members had no idea they were not really protected at all and should be told, the Government continued to tell workers their pensions were safe and failed to warn of any risk.

3. These final salary pension scheme members were not allowed to have any other pension and were totally relying on their company scheme for a decent retirement.

4. The Financial Assistance Scheme (FAS) was announced in 2004 and has still only helped a fraction of those who should already be living on their pensions.  It has paid out around £9m but has cost £10m to administer!  The FAS pays far less than the later Pensions Protection Fund (PPF) which started in 2005 and protects members of schemes which fail in the future:
 
5. The FAS does not pay 80% of the expected pension. It pays 80% of something which Government has called “core pension” which:

• Takes away up to 5 years of pension as it won’t start paying until age 65
• Takes away all protection against inflation
• Takes away the whole tax free lump sum (which many people planned to use to pay off endowment mortgage shortfalls)
• Takes away some of the revaluation
• Takes away all early retirement benefit
• Takes away most of the ill-health cover
• Takes away much of the widow’s benefit 
• Takes away all the dependent children’s benefit 
• Takes off 22% tax

and then pays 80% of what is left.

6. By contrast the PPF, pays 90% of the members’ expected pension and:

• fully recognizes scheme pension age
• includes some inflation linking
• includes the tax free lump sum
• includes an early retirement and ill-health allowance
• includes more widow’s benefit
• includes dependent children’s benefit 

The PPF also pays quickly. For example, ASW failed in 2002 and most of its employees over retirement age have yet to receive a penny. However, Rover failed in 2005 and its employees over scheme age received their pensions immediately.