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Compensation Claims Fuel Pension Revolt

By Rupert Jones, The Guardian

April 10, 2004

The government could face the prospect of an MPs' rebellion over pensions that ranks with previous revolts over issues such as tuition fees and foundation hospitals. 

Ministers have insisted they will not bail out the estimated 60,000 workers who have lost some or all of their hard-earned company pension entitlement after their employers went bust. But a growing number of MPs believe the government must pay up, and it looks like we're heading for a showdown. 

This week it emerged that more than 290 MPs, most of them Labour, have signed a Commons motion tabled by Cardiff West MP Kevin Brennan calling on the government to compensate workers at companies such as defunct steel firm ASW. They and employees at hundreds of other firms face poverty in retirement because of rules that mean people who have paid into final salary schemes for decades can end up receiving just a fraction of their entitlement - or nothing at all. 

Last month it emerged that 150 workers at diesel engine maker Lister Petter are set to lose up to 90% of their promised company pensions, and there is growing concern about what will happen to thousands of staff at crisis-hit bus maker Mayflower, where there is a £25m deficit in the pension scheme. 

The government has announced a new compensation scheme - the so-called pension protection fund - to safeguard millions of members of final salary company schemes if their employer goes under. But this will not take effect until next year and will not help those who have already suffered a loss. 

A sustained and well-supported campaign has kept the issue in the news, and Mr Brennan has indicated that unless the government comes forward with its own plans to help those who have already lost out, he will table an amendment to the Pensions Bill. 

Many MPs believe practical politics and fairness will force ministers to change their minds before the bill becomes law. 


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