Housing Benefits (18 to 21-year-olds)

Oliver Letwin Excerpts

Tuesday 7th March 2017 Commons Chamber

[Caroline Nokes]

The right hon. Gentleman raised the issue of those across the country—he specifically mentioned Hampshire—who are already in receipt of housing benefit. They will have transitional protections and will not be affected. So when he asks how many in the county of Hampshire will have their housing benefit withdrawn, the answer is none, the same as for every county. He also raised the case of those who are serving in the armed forces, of taxpayers and of couples who have children. If he looked at the list of exemptions that was published on Friday, he would see that those are all included.

[Sir Oliver Letwin (West Dorset) (Con)]

Does my hon. Friend agree that in the light of all the exemptions, we are actually talking not about the children, but about the responsibilities of the parents? Are we not seeing here a reassertion, rightly, of the responsibilities of parents for unemployed young people under the age of 21?

[Caroline Nokes]

My right hon. Friend makes a really important point. This is about encouraging family responsibility. It is about enabling and helping young people who have the choice to remain at home to stay there. For those who cannot stay at home, a very significant exemption is written in; those for whom it is inappropriate to stay in the family home will be exempted from this policy.

AEA Pension Scheme

Oliver Letwin Excerpts

Wednesday 26th October 2016 Westminster Hall

[Sir Oliver Letwin (West Dorset) (Con)]

I beg to move,

That this House has considered the advice given to AEA pension scheme pensioners.

I am grateful to my hon. Friend the Minister, who is indeed honourable and a friend and a Minister. As I mentioned to him outside the Chamber, the gist of what I want to say is more directed towards the Cabinet Office than his Department, but it is useful to have this opportunity to put a flag in the ground. I should say right away that the purpose of the debate from my point of view, and I think that of those Association of Accounting Technicians pensioners who have been affected by what I am to describe, is to lay the grounds for an amendment we will need to move to the forthcoming ombudsman Bill to remedy a particular problem to which I shall come.

For the sake of anyone who happens to read Hansard in due course, I should begin by telling the story in brief. Incidentally, this is a story that has been told by many hon. Members from both sides of the Chamber. My hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) held a debate on a connected subject. Others who have taken a great interest include my right hon. Friends the Members for Saffron Walden (Sir Alan Haselhurst) and for Wantage (Mr Vaizey)—the latter is in his place: he has been particularly active on this recently and I have corresponded with him—my hon. Friends the Members for Newbury (Richard Benyon) and for Oxford West and Abingdon (Nicola Blackwood), and indeed former Members such as Ian Bruce, who represented South Dorset.

I think the story is well known to all present, but, in brief, in 1996 when the United Kingdom Atomic Energy Authority was spinning off what became AEA Technology, a new pension scheme was created for that company. The employees concerned had been employees of UKAEA and had benefited from a Government-backed pensions scheme there. They were offered the choice either to remain in the existing scheme or to transfer, on two possible bases, to the AEA Technology scheme.

The sequel, which is also well known to everyone present, is that unfortunately the AEA Technology final salary scheme, like many other such schemes, came a cropper and, when AEA Technology went bust, the scheme turned out to be in massive deficit, so my constituents, and I suspect those of other hon. Members present, found themselves in the hands of the Pension Protection Fund, which—thank goodness—had been set up to deal with such matters. In that respect, they are in no different position from many other people who have suffered a similar fate.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

I thank my right hon. Friend for giving way so early in the debate. He is summarising his case exactly right. Is it not the case that, when the pension holders transferred to the new scheme, they were given strong assurances that they would continue to enjoy benefits identical or “very close to”—that was the wording in some of the literature that they were given—those they had under the Government-backed scheme?

--- Later in debate ---

[Sir Oliver Letwin]

I am grateful to the former Secretary of State for Work and Pensions, my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), with whom I have dealt on various occasions in even more vexed circumstances. He is absolutely right. The gist of what I am talking about is the advice these pensioners were given at the time they decided to make the transfer. I will go into that in some detail in just a moment.

[Dr Julian Lewis (New Forest East) (Con)]

I thought I would get this in now before my right hon. Friend gets into his flow. My constituent, Dr Keith Brown, wrote to me quite some time ago, saying:

“Our main complaint is that official information provided to us at the time of privatisation did not tell us that the new pension scheme was at a much greater risk of failure than our old UKAEA scheme.”

That seems to be the nub of the problem: what they were and were not told.

[Sir Oliver Letwin]

My right hon. Friend is absolutely right: that is the nub of the problem—and the nub of the solution is related. It is a good idea to have solutions that relate to problems, and I am going to propose a solution to that particular problem, but let me first enlarge on the point both of my right hon. Friends have just raised, because this is where we get to an extraordinary sequence.

At the time when the pensioners in question were choosing whether to transfer their existing accrued rights from the Government-backed UKAEA scheme into the commercially-backed AEA Technology scheme, they were offered advice by all sorts of people. They were told various things by AEA Technology, the new firm. Needless to say, AEA Technology said the new scheme was wonderful because it wanted to attract people into it. It wanted to do that because anybody who knows about final salary schemes—there are people here who are genuine experts on that—knows that it is necessary to have a large number of employees in such a scheme to make it remotely viable, so AEA Technology had an interest.

I do not know, and I do not suppose we will ever find out, but I suspect that the UKAEA employees—who are not just any old set of employees, they are highly skilled professionals; some of them are extraordinarily clever people—would quite easily have been able to account for the undoubted bias in the advice coming from their prospective employer, so let us forget about that piece of advice. They were also, I think, given a certain amount of steer by UKAEA itself. This is where it gets a little trickier, because UKAEA is a Government body and it had some kind of duty to give people dispassionate and neutral advice. However, UKAEA was in the course of trying to spin off AEA Technology, so it had an interest, too. I genuinely do not know the extent to which the employees did or did not pay attention to whatever they were told by UKAEA. Luckily, for the purposes of the debate, I do not want to dwell on that either, because there is a much more serious issue at stake.

The third set of people from whom the employees received advice—we do not have to speculate about this because it was written, and I am going to describe exactly what it said—was from none other than the Government Actuary’s Department. That is not just any old body. It is the most august body, so far as advice on pensions and pension matters is concerned, in our country. It is exactly what its name says on the tin; it is the Government Actuary’s Department.

The Government Actuary’s Department now has a statement of practice, but at the time it issued that advice it did not. It issued a paper, a copy of which I have in my hand, that discussed transfers from the UKAEA superannuation scheme to the AEA Technology pension scheme. In section 3 of that paper, particularly in subsection 3.2, the Government Actuary’s Department listed what it describes on the contents page as “Advantages of preserving”, which means the advantages of remaining in the UKAEA scheme. Another section describes

“advantages of taking a special transfer value”—

namely, the advantages of moving from the UKAEA scheme to the AEA Technology scheme.

The first strange thing about that is, in section 3, in which the Government Actuary’s Department lists the

“Factors to consider in making the decision”,

and was in particular describing the advantages of preserving the UKAEA scheme benefits—looking at what might influence the employees to remain with the public sector scheme—it said:

“Whilst it is unlikely that the benefit promise made by either the UKAEA Scheme or the AEAT Scheme would ever be broken—”,

and it went on to say that it is even more unlikely that both promises would be broken.

The important point is that not just any old person but the Government Actuary’s Department said it was unlikely that the benefit promise would be broken by either the Government-backed scheme, UKAEA, which is undoubtedly true, or the AEA Technology scheme. I have no doubt that, so far as it went, that statement was accurate, if looked at from the perspective of the date on which the Government Actuary’s Department wrote that it was “unlikely” that the benefit promise would be broken by AEA Technology. Incidentally, I hope the Minister and others will trust me; I am sure the Minister has read the whole thing because I know he has been assiduously preparing for the debate.

What is clear is that nowhere in the rest of the document does the Government Actuary’s Department say what was also patently true—that the risk of the pensioners losing a large part of the value of their pensions if they remained with their accrued rights in the UKAEA scheme was zero, or as near to zero as human beings get. A triple A-rated guarantee from HM Government attended that scheme. No such security was available under the AEA Technology scheme. Commercially-backed schemes do not have a triple A-rated Government-backed guarantee that pensioners will get their money as promised. That is a material difference between the two schemes, and the Government Actuary’s Department, in offering advice to pensioners, had a clear duty to bring out that difference in risk. It did not, and that is the starting point for the compelling argument I will make.

[Stephen Crabb]

It is true that pensioners were encouraged to seek the advice of a qualified independent financial adviser, but that adviser could never advise on the overall risk of company failure and, therefore, the failure of the scheme, so my right hon. Friend’s point is exactly right. There was nothing in the documentation that pointed to the risk of the scheme failing altogether.

--- Later in debate ---

[Sir Oliver Letwin]

I am glad that my right hon. Friend raised that point. It has been said in previous debates and in correspondence with successive Ministers that the point about the availability of independent financial advice is material. To the argument I am making it is not material, because even though the pensioners could have sought independent financial advice, and even if it were the case—as a matter of fact, I think my right hon. Friend the Member for Preseli Pembrokeshire is right that it would not be the case—that the independent financial adviser had advised them about the overall risk profile of the two possibilities, we would still have to ask why advice was given by the Government Actuary’s Department. If the pensioners were meant to rely exclusively on independent financial advice, the only appropriate posture for the Government Actuary’s Department would have been to say, “We’re not offering you any advice. This is not for us. Go to an independent financial adviser.”

On the contrary, the Government Actuary’s Department very unusually constructed a paper, of which we all have copies, and handed that to highly intelligent people with the intent of persuading them that it described the situation, which is the only presumption we can make. Why else would the Government Actuary’s Department give someone such a paper?

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

Does the right hon. Gentleman agree that, in effect, what the Government Actuary’s Department has done is to give a subtle inducement to those who were in the UKAEA scheme to move across? At the end of the day, the Government should have some responsibility for exposing those pension plan holders to risk as a consequence of what has happened.

[Sir Oliver Letwin]

I agree that there was probably a subtle incentive, but I will come on to that in more detail in a moment. At this stage of the argument, all I am saying is something that I think is unchallengeably certain: the Government Actuary’s Department gave advice that did not bring to light the material difference in risk between one situation and another. That is fact. Beyond that, one can speculate, but that is fact.

When I say that the Government Actuary’s Department had a duty to highlight that difference of risk, I am again not speculating. Although at the time it did not exist, the Government Actuary’s Department now has a statement of practice. I have a copy of it in my hands. Under the heading “Security”, the statement of practice—essentially a code of conduct—says:

“It is recognised that the security of a private sector scheme cannot be provided in the same form as that applying in the public service”.

It is practically impossible to imagine that the Government Actuary’s Department would offer advice now in the form it did then, because it would be guided by its own code of practice. If it were not, I imagine rapid action would be taken to correct it, because if a Government Department issued a code of practice and then did not follow it, that would lead a Minister quickly to do something. Therefore we know that the Government Actuary’s Department had a duty, which unfortunately was not at that time written down in the code of practice, that it did not observe to bring to light the difference in security between the two positions. It did not do that.

It is important to make one last point about what the Government Actuary’s Department did. A freedom of information request has revealed an interesting sequence of events about which I intend in due course to write a little monograph, because it is very instructive about what happens inside Government and agencies when they engage in commercial transactions. The FOI revealed that there were exchanges of drafts between the Government Actuary’s Department, UKAEA and AEA Technology. The drafts went back and forth, and the various parties commented.

When the draft of the very section to which I am referring, which was at that time labelled 3.1.1 instead of 3.2.3—I will come on to that point, but it is ipsissima verba—was sent to AEA Technology, the person looking at it from AEA Technology noted in handwriting, “Delete”. So even an observation that it was possible the AEA Technology scheme might conceivably go bust, or that the UKAEA scheme might not deliver, was objected to by AEA Technology. It tried to get that deleted. To be fair to the UKAEA people and the Department then in charge of them, which is effectively now the Department for Business, Energy and Industrial Strategy, that did not get deleted.

I mentioned, however, the numbering, which is also instructive. Section 3.1.1 became section 3.2.3 because UKAEA supported the AEAT proposition that the advantages of preserving—in other words, staying in the public sector—should not be presented before the advantages of transferring, as it was in the original draft, but vice versa. Indeed, that change was made. That whole sequence of events illustrates very clearly that AEA Technology and UKAEA had a joint interest in trying to get as many pensioners as possible to transfer into the AEA Technology scheme—not because they were evil schemers, but because they wanted that scheme to be viable. They were putting as much pressure as they could on the Government Actuary’s Department, to get as close as they could get it to go to telling the pensioners that that was a good thing to do.

To be fair to the Government Actuary’s Department, it did not say that that was a good thing to do, but it also did not illustrate the fact that if we looked at the risks, it was a very bad thing to do. That is a very important point. The Government Actuary’s Department did not just fail to point out the risks; it failed to point out the risks under conditions in which some pressure upon it was being brought not to reveal those risks in full.

I want to make one last point about the advice from the Government Actuary’s Department before I move on to the law. The role of the Government Actuary’s Department, which comes out clearly in the whole of its advice, was to look at the benefits of the two possibilities—remaining or transferring the accrued rights—and to see whether, on an actuarial basis, one was superior to the other or the other to the one. The Government Actuary’s Department concluded that there was not really anything to choose between them. That was translated into the view that all in all, the benefits were as good in the one case as the other. Of course, for a particular individual—this was pointed out—it might be different, but by and large, people got the same kind of benefit in the two cases.

We have the word of the Government Actuary’s Department that there would be no financial difference for pensioners, by and large, whether they stayed or went to the AEAT scheme—except, of course, that there was a huge difference. In the one case, they were getting the same benefits guaranteed, and in the other case they were getting the same benefits not guaranteed, because they were supported only by a commercial firm that could have gone bust and did go bust, and whose pension fund could have been in deficit and was in deficit—and lo and behold, they have indeed suffered.

Under pressure from those responsible for the transaction, the Government Actuary’s Department assessed the two schemes as being of equal value to employees without taking account of the difference in risk. It failed to point out that difference and therefore led the pensioners to believe that there was nothing particularly wrong with transferring their accrued rights to the AEAT scheme. They could have had the benefits guaranteed permanently had they remained in the UKAEA scheme, but they did not ever realise that great difference in risk.

[Richard Fuller (Bedford) (Con)]

My right hon. Friend has pointed to advice from the Government Actuary’s Department about a privatisation. There was a period when many other Government businesses were being privatised. Has his research identified whether the advice was similar in other cases, or was this piece of advice unique to the circumstances of AEA Technology?

[Sir Oliver Letwin]

I do not know whether my hon. Friend brilliantly waited until this moment to ask that pertinent question, but he has asked exactly the right question at exactly the right moment. It was generally the case that undertakings were given—I was involved as a financial adviser in many privatisations—about the solidity of the pension scheme that was going to be available for pensioners if they transferred to the new undertaking. I strongly suspect, although I cannot prove, that many of the AEA Technology pensioners who later suffered imagined at the time, not least because the Government Actuary’s Department did not say anything about a difference of risk, that such undertakings were available.

Moreover, the pensioners were probably led to have greater faith by the accident that the provisions of the law that gave rise to the transfer of the undertaking suggested—although did not say, if we read them carefully —that it would be just as good a pension scheme as the one they were leaving. In fact, in this case there were no such undertakings, and therefore there was a difference between this and many other privatisations. That was never brought out in the documentation, and the Government Actuary’s Department did not refer to it. That further strengthens, to my mind, the point that the Government Actuary’s Department advice served to mislead the pensioners.

I apologise, Ms Dorries, for the fact that that was all just the shaggy dog story, and now I am coming to the actual point of the debate. Everything I have described is a series of allegations by a Back-Bench MP—namely me—about what I think the Government Actuary’s Department did, and who the hell cares whether a Back- Bench MP thinks the Government Actuary’s Department behaved well, badly or indifferently? There is another body that judges these things that is much more important than a Back-Bench MP for these purposes, and that is the Parliamentary and Health Service Ombudsman. That body gets to judge whether a Government agency—the Government Actuary’s Department is certainly one of those—has acted in such a way as to maladminister. That is the task of the ombudsman.

It is well established in the case law surrounding the ombudsman that if a Government Department misleads people, that is a form of maladministration, and if it causes them loss, that is a form of maladministration that the ombudsman can rule requires remedy. That is a perfectly well established chain of thought. We might think, therefore, that the Parliamentary and Health Service Ombudsman would be able to rule on whether I am right in asserting that the Government Actuary’s Department misled these pensioners and therefore engaged in an act of maladministration.

If we look at the Parliamentary Commissioner Act 1967—although it has often been amended since—and its original description of what the ombudsman should do, our heart lifts to begin with, because section 4 says clearly that the Act applies to

“government departments, corporations and unincorporated bodies”

listed in schedule 2. If we turn to schedule 2 of the Act, lo and behold, one of the bodies listed is none other than our friend the Government Actuary’s Department. We might therefore think that we do not need to speculate about this; we just need to write a letter—I have written letters, as a matter of fact—to the Parliamentary and Health Service Ombudsman to ask it to investigate the Government Actuary’s Department action in this case.

Alas, it ain’t so, because schedule 2 is subject to the notes to schedule 2, and in those notes—I do not know how this happened—the Government Actuary’s Department is specifically included in the purview of the ombudsman only

“relating to the exercise of functions under—

(a) Part 2 of the Insurance Companies Act 1982, or

(b) any other enactment relating to the regulation of insurance companies within the meaning of that Act.”

I will not trouble the Chamber with what goes on in the Insurance Companies Act 1982, but I assure hon. Members that I have been through it—it is incredibly boring—and there is absolutely nothing that would in any way enable the ombudsman to look at the Government Actuary’s Department’s action in this case.

I imagine that the underlying purpose of that massive exclusion was that someone at the time—in 1967 or later—wanted to ensure that the parliamentary ombudsman would not be able to second-guess the actuarial calculations of the Government Actuary’s Department. I thoroughly sympathise with that. As a former Minister, I would certainly not want to see the Parliamentary and Health Service Ombudsman trying to be an amateur Government Actuary’s Department No. 2. That would be mad, and I am not asking for that.

In this case, we are not talking about an actuarial calculation. I am assuming, as I have done throughout my remarks, that Government Actuary’s Department calculations of the value of the two schemes to the pensioners, if they had been of equal risk, were perfect. My problem is what the calculation did not bring to light. It was not an actuarial calculation. It was a failure of a duty to point out the obvious in an extremely important way to people who may not have known it was obvious.

It is arguably clear that that is maladministration that the parliamentary and health service ombudsmen should be able to adjudicate on. It would require only a small amendment to section 4(1) of the 1967 Act in the forthcoming parliamentary ombudsman Bill to remedy that. We would then be able to go back to the ombudsman and say, “Now you have the power to look at what the Government Actuary’s Department did, whether it constituted maladministration and whether in your view that maladministration was material in having an effect on the pensioners, the choices they made, and hence the losses they incurred.” Then, as with Equitable Life—I threatened to go on hunger strike if the then Government did not bring in the ombudsman and agree to follow its ruling—it would be possible to introduce a scheme with compensation proportionate to the extent to which the losses to the pensioners were caused by the maladministration.

We all know that the Equitable Life scheme is not perfect and does not fully compensate the pensioners, because much of the problem was due to the directors and not the regulators. However, to the extent that it was due to the regulators, there has been a compensation scheme exactly like my proposal. We could do that in this case if we changed section 4(1) of the 1967 Act.

[Michael Tomlinson (Mid Dorset and North Poole) (Con)]

I, too, have constituents who are affected by this issue. My right hon. Friend set the problem out in detail and helpfully, and is now getting to the solution. Is there not a difficulty, in that it would have to be retrospective, or are there ways around that to help his constituents and mine?

[Sir Oliver Letwin]

I am delighted that my hon. Friend raises that point. I do not think it would be retrospective in any noxious meaning of the word. The decision that the incoming coalition Administration made on Equitable Life in 2010—to implement commitments that the Conservative party and the Liberal Democrats had entered into in opposition that we should follow the ombudsman’s ruling—was post facto. It was after all the damage had been done to the pensioners, and it was not regarded as retrospective. We implemented the scheme, and many Equitable Life pensioners have received compensation.

The case I am talking about is exactly the same. The ombudsman could rule ex post—not retrospectively, but simply with a ruling about what occurred. That ruling would undoubtedly be followed by the Exchequer in constructing a proportionate scheme. That is what we need to achieve.

I see that my right hon. Friend the Member for Wantage (Mr Vaizey) wants to take part in the debate, and I welcome that. I will sit down, because I have made the points I wanted to make.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Pensions (Richard Harrington)]

It is a pleasure, as ever, to serve under your chairmanship, Ms Dorries. I thank right hon. and hon. Members for their contributions.

As a junior Minister in Government until July, I recall that one of the great fears we all had, for very good reason, was of being summoned before my right hon. Friend the Member for West Dorset (Sir Oliver Letwin). When he applied for this Westminster Hall debate, I realised that it was an issue to be taken very seriously. I hope that after my remarks he will agree that the Government have indeed done so. In the first instance, it is clear that no Minister—or indeed anyone else—could have anything but sympathy for the constituents who have suffered in these circumstances. There is absolutely no question about it; that is reflected by the morality of the issue and by the fact so many people have come to hear this debate and other debates that have taken place.

I hope to shed some light on the Government’s position, but I am not in a position to answer the questions in the way that my right hon. Friend and other contributors to the debate might expect, which is to provide a solution to the problem. The Government do not believe that we should compensate members of the AEA Technology pension scheme above what is being provided by the Pension Protection Fund. That is very clear. I would rather not be grey about it; that is the Government’s position. We do not accept that the loss of the pensions was the Government’s fault.

As my right hon. Friend said, the note has been widely circulated. I read it. Whatever it may or may not be, the note clearly states at the beginning that it was a note by the Government Actuary’s Department on the options available in respect of accrued benefits. It states that clearly. I do not wish to be pompous about the word “advice”, which means different things in the financial services world than in the general context of conversation between people and in guidance, but it was not designed to be advice. It provides three options and outlines the main factors that people should take into account when reaching their decision on which option to accept.

I accept that on behalf of the Government I may select particular pieces from the note, and other right hon. and hon. Members may select pieces that suit their argument. That is natural and I have tried not to be like that when considering these comments. However, the note specifically and explicitly said that it did not intend to suggest that one course of action was better than another, and that if anyone was in doubt, they should seek independent financial advice. It stated that very clearly in the final note. It said that the intention was not to suggest one option was better than the other.

[Sir Oliver Letwin]

I entirely understand that the Minister needs time to reach the rest of his argument, but he has hit the nub of the question. Does he accept that if the Government Actuary’s Department calculated on an actuarial basis that the two schemes were equivalent financially, and if it stated, as he rightly said it did, that it was not suggesting that one was superior to the other, but if it was, in fact, the case that one was risk-free and the other was risk-bearing, it follows as a proposition of business logic and economics, as taught in any business school, that the thing that is financially equivalent but is risk-free is superior to the thing that is financially equivalent but risky? Therefore, it should have suggested that one was superior to the other—namely, that remaining was a superior option, because it was.

[Richard Harrington]

I thank my right hon. Friend for those comments. It is certainly true to say that the area of risk is not discussed explicitly and it is reasonable to argue that there should have been a box with a health warning saying that one piece of advice—or not advice, but information—was different from another because of the risk element, but it is also fair to say that the note does not attempt to assess risk. It may imply by default that one was less risky than the other, but it certainly does not say anything that could be interpreted as misleading the people who received it, in my view.

I understand the position of constituents in the Public Gallery today, some of whom are understandably shaking their heads, given their views about what I have just said, but it is very easy, years later, to pick pieces out of documents. If it said that this was advice, that would be one thing, but it clearly says that people should take independent advice.

My right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb), the former Secretary of State for Work and Pensions, said that independent advice would not cover the risk of transferring. Please do not misunderstand me: I am not saying that I have no reason to believe him, but I cannot understand why an independent financial adviser would be more or less likely than anybody else to comment on the risk or the lack of risk in giving advice. As I said, I accept that it is easy for us to say things all these years later, but the note does not seem to me to be intended to cover every eventuality. It was eight pages long and it was not intended to cover everything. It does not completely ignore the subject of insolvency.

[Richard Harrington]

My hon. Friend knows very well that I did not say that. I said that an independent adviser is no more or less likely to consider the idea of risk. I was actually referring to the view of my right hon. Friend the Member for Preseli Pembrokeshire that suddenly Government advisers did assess risk, but independent advisers could not possibly do so. I will have to make progress, because we are running out of time. I believe that the note was intended as a helpful starting point but did not constitute advice for members.

I will move on to the parliamentary ombudsman—I must deal with the ombudsman service generally and the choice of ombudsman, because they are so important in this case. It is correct that the actions of the Government Actuary’s Department fall generally outside the parliamentary ombudsman’s remit. I understand, however, that is only one of the reasons that the parliamentary ombudsman gave for deciding not to investigate. I hope I am not misrepresenting what she said—I have tried to look into this in some detail—but it seems to me that her decision was made partly on the basis that the complaints were not about the actions of a Government Department in relation to a citizen, which is what the ombudsman service is for. She has concluded that the complaints are about information provided in relation to employees and employees’ pension rights. That is why it is not the concern of the parliamentary ombudsman. If that is a correct interpretation of her opinion, changing the legislation to allow her office to have greater oversight of GAD would not solve the difficulty raised in this debate.

[Sir Oliver Letwin]

Will the Minister give way?

[Richard Harrington]

I really think I should make progress.

As for the pensions ombudsman, which I have some responsibility for and some knowledge about, members of a pension scheme can complain to the pensions ombudsman, who has the power to investigate, and does investigate, public sector pensions schemes as well as private sector schemes.

The pensions ombudsman looks at maladministration —for example, when a trustee or a manager has been given incorrect advice or information. The previous pensions ombudsman investigated a complaint last year concerning the AEA Technology pension scheme. GAD was not a party to that complaint. In the determination, the ombudsman specifically said that he was not ruling on whether the actions of GAD came under his jurisdiction and that no inference should be drawn from his comments about whether it did or did not, or about the likelihood of a successful complaint about GAD.

I understand that the current ombudsman has since considered some AEA complaints and the ombudsman’s office has decided not to investigate. I cannot comment on any particular complaint, but I have been informed that, in accordance with the usual procedures, all the complaints were looked at individually. Many reasons for not investigating the complaint were given, but they did not include that GAD was outside the pensions ombudsman’s remit.

It is possible, of course, to challenge the pensions ombudsman’s decision through the courts by judicial review or by appeal. I would briefly like to mention the Equitable Life case, which has been discussed during the debate. The parliamentary ombudsman did an investigation and asked the Government to expand the jurisdiction for this case alone. She informed us that public sector pensions are beyond her remit, so it seems to me that it is in the pensions ombudsman’s remit. He has looked at these two cases but has said that GAD was not a party. As far as I can see, however, there is nothing to stop people from going to the pensions ombudsman and naming GAD as a party to the case. If they are still not satisfied, there is the system of judicial review in the Court of Appeal, because the pensions ombudsman is a quasi-judicial body. I meet the pensions ombudsman regularly, and I am prepared to bring the subject up straightaway and ask whether he has difficulties within the scope of his existing jurisdiction in dealing with complaints brought to him.

--- Later in debate ---

[Sir Oliver Letwin]

I am very grateful to the Minister. I will indeed pursue that question with the Parliamentary Secretary, Cabinet Office, and perhaps the Minister’s question about the pensions ombudsman. Eventually, I am sure we will find a solution.

Question put and agreed to.

Resolved,

That this House has considered the advice given to AEA pension scheme pensioners.