The Minister of State, Department for Work and Pensions (Steve Webb)
It is common courtesy, simply as a matter of routine, to congratulate the Member who has secured a debate, but in this case I sincerely congratulate the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), because he has a track record of campaigning on this issue over a number of years. I looked at some of the articles on his website, and I recognise that he and other right hon. and hon. Members have done an important service to their constituents and the trawlermen. He spoke powerfully and evocatively about the lives that they led and their quite proper demand for justice.
I pay tribute to the right hon. Gentleman for that work and for, as he said, giving a voice to what has to some extent been a silent campaign. I must admit that when the titled “Trawlermen’s pensions” came out of the hat, I raised an eyebrow and wondered what the subject was. As I have read up on the issue and as my officials have provided me with briefings, I have been quite startled by, as has been said, the shoddy record keeping of the various schemes right from the beginning. It seems incredible to think that a pension scheme could have just a name, an initial and a date of birth—for example, “Smith, J., 1920”, or whatever. It just seems hopeless.
It was clearly a different world back then. We did not have the Pensions Regulator, a pensions ombudsman, the Pensions Advisory Service or the pension tracing service. A lot of those institutions have come about partly to ensure that such situations do not arise again. I want to talk predominantly about the trawlermen and their situation this evening, but I should also say that good record keeping in company pension schemes has not completely gone away as an issue. Even this year, the regulator has been doing more work to ensure that schemes keep proper records. I would like to use this opportunity to reiterate the vital importance both of schemes keeping proper records—something that the trawlermen’s case demonstrates—and, if records are not in order, of doing something now to put them in order to avoid a recurrence of anything similar.
Let me draw together where we are now and where we go from here. I recognise that in the limited time available I might not be able to cover all the detail that I would like to, so let me say that I would be more than happy to meet the right hon. Gentleman and his colleagues to discuss how we might take matters further, although I do have an update for him of where we have progressed things in the interim.
We are talking about five schemes, all of which are now administered by Aviva. One confusing aspect of this situation is that the schemes have traded under different names at different times. The principal scheme is the fishermen’s pension scheme, which had around £1.3 million of assets as of June 2010, as the right hon. Gentleman said—obviously these things fluctuate—and around 4,800 remaining members, but there are four others: the Fleetwood fishermen’s scheme, the Scottish trawler fishermen’s pension scheme, the Fairtry pension scheme and the Hull fish merchants’ pension scheme. The right hon. Gentleman talked about tuppence-ha’penny and fourpence going in, but what is unusual about those schemes is that, essentially, the amounts coming from them are in many cases not pensions at all, but lump sums of, say, £300 or £400. This leads to confusion about where some of the money has gone. If someone was told that they were paid a pension but they said that they were not, it would be obvious and easy to decide, but on the whole we are talking not about pensions but about a right to a small amount relative to a lifetime of pension receipt. In the past, those amounts were often paid as lump sums.
Alan Johnson
I am grateful to the Minister for giving way and for agreeing to a meeting. The amounts involved average £600, and, as with any average, many of the amounts are higher. The people involved did not have bank accounts, and when the battle rages about disputed payments—there are about 53 cases—it is important to recognise that fact. One of my constituents, unusually, had a bank account in the 1980s and he was able absolutely to prove his case. Aviva said it had sent the money via the seaman’s mission and the employer so that it eventually ended with him, but he was able to prove from his bank account that the money had not arrived. In the one case where there is any proof, we can see that it clearly supported the side of the trawlermen and their families. That is why we say that people should be given the benefit of the doubt.
Steve Webb
One issue that I know has been suggested to the right hon. Gentleman in the past, but as far as I am aware has not so far been taken up—he will correct me if I am wrong—is how far the pensions ombudsman could be used for this purpose. There are issues of cases being out of time, but it might be worth considering whether the pensions ombudsman can provide a route to resolve some of the disputed cases. It is an issue that we could discuss further.
The right hon. Member for Kingston upon Hull West and the hon. Member for Great Grimsby (Austin Mitchell) stressed the need to wind the schemes up as soon as possible. One problem has been the absence of trustees and the difficulty of tracking people down. I asked my officials to speak to the Pensions Regulator on that very subject. As the former Secretary of State will know, the regulator is operationally independent of the Department and therefore cannot be told what to do by me, although I am sure that he is doing his best for the trawlermen.
We spoke to the Pensions Regulator’s office today to find out the latest information and to try to ensure that things move forward as quickly as possible. The regulator confirmed that he expects Capital Cranfield to be appointed to the other three schemes where it is not already the trustee. I understand that the appointments are imminent. Capital Cranfield will be in a position to resolve issues quickly, and I certainly hope that it will do so.
I should add, given that the hon. Member for Great Grimsby asked about costs and charges, that Capital Cranfield has confirmed that it is willing to take on the trusteeship of the additional schemes at no charge. The regulator is taking all urgent steps to get the trustees in place quickly—within weeks. I hope that getting those trustees in place and getting the schemes dealt with by a single trustee will represent an important step forward. My impression from the briefing provided by Capital Cranfield is that the lessons learned from the biggest scheme can be applied quickly across all schemes to bring these matters to a satisfactory conclusion.
The decision about what should happen to the balance of the funds is important. The right hon. Gentleman will appreciate that this issue is governed by a number of factors—fundamentally, trust law and tax law. There are formidable barriers to taking money from a pension fund under trust law for which tax relief and so forth is given. There is quite a web—if you will pardon the phrase, Mr Speaker—of complex legislation surrounding the use of that money for an entirely laudable purpose, but one that is different from the trust’s original purpose. I believe that Capital Cranfield has looked at that option and I know that the right hon. Gentleman is in dialogue with it. I would be happy to discuss it further with him when we meet, but I place on record the fact that there is a significant barrier to that approach.
Very much prompted by the right hon. Gentleman’s efforts, Aviva undertook the Find a Fisherman exercise. I understand that one further exercise is being undertaken to try to track down those who might not have made claims. This uses a service known as Assets Reunited and it is used to track down any people not already found. It is a dwindling exercise, but I am pleased to hear that this ongoing effort is being made.
The right hon. Gentleman asked to whom the companies involved are answerable. There is a sequence. They are answerable initially to the members of the scheme, who have some representation—typically they are represented by the trustees, although the position varies—and are then answerable to the regulator. The regulator is becoming very involved, and I welcome the work that it has already done. In the event of maladministration, that is where the pensions ombudsman comes in. I should be happy to discuss with Opposition Members the scope for involving the ombudsman, particularly in the disputed cases.
I understand that the overall sum that we are discussing is about £1.7 million across the five schemes, and, as we have heard, there are between 6,500 and 7,000 untraced members. Given that the record keeping was so poor, it is not surprising—although entirely to be condemned—that it has been impossible to trace half the members involved. It is reasonable to assume that, thanks to the efforts of the Pensions Regulator to improve record keeping, the failure to find members will not be repeated on the same scale. As I have said, the problem does not occur as much in large, well-run schemes, but one of the features of pension funds is a very long tail. In many very small schemes record keeping may not be particularly good, and problems not dissimilar to this may well have arisen in other schemes. As was pointed out by the hon. Member for Great Grimsby, over a period the assets of the schemes and member records have passed through various companies owing to corporate amalgamations and acquisitions, which has increased the difficulty of tracking people down and finding out what has happened to the money.
Capital Cranfield has expressed the hope that matters will be pretty close to resolution by, certainly, the end of this year. I know that the right hon. Member for Kingston upon Hull West and Hessle has been involved in the issue for about four years, but these schemes were set up 50 years ago, and it has been a long saga. I entirely agree with the right hon. Gentleman that the sooner we can resolve the matter and convey the money to the people who should have it, the better.
There is also the question of the balance of the fund. I shall leave aside for the moment the idea of an alternative charitable or other use. In the normal sequence of events, part of the balance would be used to buy a deferred annuity for any deferred member who might no longer be a trawlerman—presumably that applies to pretty much all of them now—and who had not yet reached pension age within the scheme: in other words, to buy a product that would match the pension promise made to that scheme member. That would be the first call on the funds, but a second possibility would be the purchase of an insurance policy. If new members turned up after the scheme had been wound up, the policy would pay out and they could also make a claim.
If, after all that, there was a surplus in the fund, it would be a matter for the trustees and the administrators to consider how the money is allocated. I understand that the most straightforward option available—although it is a matter for them, not for me—is to allocate the money to the people who are still members of the scheme. One of the questions that I have asked when we have discussed the matter in the Department is whether it would be possible to pay it to the people who had received the lump sum some years ago, but in many cases that money was paid and those people cannot be traced.
I congratulate the right hon. Member for Kingston upon Hull West and Hessle on raising an important issue of injustice. I am happy to commit myself to working with him and with the Pensions Regulator to try to bring the matter to a satisfactory conclusion.
Question put and agreed to.