MPs overturn Lords on pensions

MPs have shot down a Lords amendment designed to offer victims of collapsed pensions a “lifeboat fund”.

The Tory proposal, also supported by the Liberal Democrats, aimed to raise the level of compensation for people whose schemes collapsed between 1997 and 2005.

But pensions minister Mike O’Brien claimed affected workers would be better served by making better use of the assets which remain in failed schemes and combining them with matched government contributions.

“If this bill is delayed,” he warned, “payments to pensioners will get delayed too.”
But concerns among minister of a substantial Labour rebellion led them to offer workers raise their entitlement from 80 to 90 per cent.

The government got a majority of 50, with 303 votes to 253.

Nevertheless, 16 Labour MPs voted against the government, and several of them urged the Lords to maintain their campaign.

One of the Labour rebels, Tony Wright, said: “I don’t think it can be said that we have yet arrived at a position of justice.”

But Mr O’Brien seemed satisfied by the government victory, saying the “lifeboat amendment has been holed below the waterline and is sinking fast”.

Shadow pensions minister Nigel Waterson replied: “It is the pension victims who are already drowning in this situation and I think you should remember that.”

Lib Dem work and pensions spokesman Danny Alexander agreed with him.

“I think it is a great shame that Labour MPs didn’t have the courage of their convictions to vote through these Lords amendments,” he said.