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Pressure Grows for Payout on Pensions

By Sarah Hall, The Guardian

May 5, 2004

Tony Blair is facing fresh pressure to pay compensation to thousands of people facing poverty in retirement because their pension schemes have been wound up after a cross-party group of MPs tabled an amendment to the pensions bill to ensure retrospective payment.

The former welfare minister Frank Field and the Labour MP Derek Wyatt yesterday laid an amendment that would pledge legislation to compensate the 60,000 workers who have lost out on their pensions after their former employers went bust. A new Pension Protection Fund will be launched next year. But it will not be retrospective and so offers no hope to those who have already lost their pensions. 

The amendment has cross-party backing, with support from the Tory frontbenchers David Willetts and Nigel Waterson. The Liberal Democrats are expected to put their names to it today. 

Mr Blair has recently hinted that the workers who have lost all or most of their pensions despite years of contributions will win government support. Two weeks ago, he told MPs he hoped to come forward "with a solution" during the progress of the pensions bill. Whitehall officials later confirmed that discussions were under way. 

But MPs now want to force the issue with the amendment. "Tony Blair has been dropping hints for weeks he's going to help the over 60,000 people in real financial distress but you can't rely on hints," said Mr Willetts, the shadow work and pensions secretary. "It's clear there should be a clear, authoritative government statement about what should be done and this amendment will force them to act." 

Frank Field, who will also introduce a bill tomorrow calling for compensation to be funded through the £15bn held in banks and building societies in unclaimed assets, said: "This is crucial for those who have lost their pensions and also crucial for the government. 

"There's no one single move the government could take which would do more to restore public confidence in pension saving than this." 


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