[A-List] UK legitimation crisis: pensions fiasco

["Michael Keaney" <michael.keaney@xxxxxx>]

Private Eye

No. 1066, 1-14 November 2002

In The Back:
Appalling McCartney

When Robert Maxwell stole his company's pension fund, the Tory government
pushed through the pensions act 1995 to stop that sort of thing happening
again.

Now, seven years later, under the "new" Labour, the pensions of workers in
private companies are just as insecure as they were in the bad old days of
Maxwell, and the government and its pensions minister Ian McCartney
sorrowfully admit that there is nothing they can do about it.

Mr McCartney's sad surrender was exposed in a debate in the Commons on 16
October. The debate was launched by Derek Wyatt, Labour MP for Sittingbourne
and Sheppey, whose constituents include hundreds of steel workers recently
made redundant when the firm ASW went into receivership.

To their horror, ASW workers in Kent and Cardiff are discovering that the
contributions they have made all their working lives into the company's
pension fund may be worth next to nothing.

The company was rich enough to pay a full pension to everyone who had
retired. It could pay £62,000 in pension money to director Gerald Sheehan
when he left ASW a year ago to become a director of the Royal Mint on
£125,000 a year; and to another director, Bill Bagnall, when he walked out
of the firm long before he got to pension age, clutching his accumulated
penions fund of £81,000. But workers loyal enough to stay with the firm
until it went bust will have to wait as long as five years before they know
how much of the money they paid in pension contributions will come to them.

Many of them fear they will get nothing at all. The ASW case is no
exception. Nearly 300 pension funds have been wound up this year. Many of
the 40,000 workers affected will get little or nothing from their pension
contributions. Mr Wyatt mentioned Listers in Haywood, Lancs; United
Engineering Forgings in Ayr, Scotland; and the Fisher Group that took over
Saphir Products. In all these cases the pensioners of the troubled firms
will end up with little or nothing to show for their pension contributions.
"Some of these people," said Mr Wyatt, "have worked 20, 25 or 30 years and
paid £100 a month into a pension fund, and they have no rights over it."

Their situations are made worse by the behaviour of lawyers, accountants and
independent trustees who fall on the bankrupt firms like vultures and can
help themselves to the pickings first -- even before the people who have
paid into the pension fund.

Mr Wyatt asked for a government guarantee for such pensioners, paid for out
of taxation. But that was far too much for Labour and Mr McCartney. In a
rambling, apologetic and inconclusive speech, McCartney expressed his
frustration, his anger -- and his political impotence. He promised to write
tothe independent trustee at ASW, to the occupational pensions advisory
service and to his ministerial colleagues at the department of trade and
industry. Indeed, he would ensure that "no stone is left unturned" to try to
resolve the questions; but really after all the stones were turned over
there was nothing he could do.

A central fund guaranteeing pensioners the pension they had paid for, he
whined, would "ultimately fall on taxpayers", and "there is therefore no
possibility at this stage of the government acceding to this request".
Indeed, he went on to argue, if the government gave such guarantees to
pensioners, employers "might neglect their responsibilities and obligations
to their members" (as they are demonstrably doing already all over the
country).