High Court rules against govt’s pension stance
The government was wrong to completely reject the Parliamentary Ombudsman’s report into a collapsed pension scheme, the High Court ruled today.
Four pensioners have now won their fight against the government’s decision not to compensate them fully when their occupational pension schemes collapsed.
The ombudsman Ann Abraham said last year that the government was guilty of maladministration. Mr Justice Bean ruled that the pensions minister John Hutton had no right to reject the Ombudsman’s report in its entirety.
The government will now be under pressure to reconsider whether it compensates people who have lost pensions from public funds. It previously maintained that it was not responsible for the losses and it would be too expensive to pay full compensation, which the government estimated at £15 billion, a point reiterated by Tony Blair today.
Instead the government offered £2 billion in compensation and this was limited to people within 15 years of retirement.
The Liberal Democrats described the High Court ruling as a “David versus Goliath” style victory.
Lib Dem pensions spokesman David Laws said: “This is the third strike against the government’s disgraceful attempts to duck out of paying compensation.after three strikes the government must surely accept that it is out”.
The ruling was also welcomed by the Labour MP Frank Field, whose pension protection bill, which contained measures to give full compensation, was dropped by the government.
“The government will now have to do the right thing by all pensioners who have lost part of their retirement income. But they will get little credit,” he predicted today.
He added: “Four outstandingly brave pensioners have had to drag concessions out of a government kicking and screaming. Instead of distributing the unclaimed assets of banks and building societies to goodness knows who – which is what the chancellor proposes – these pensioners should have first claim.”
Shadow home secretary Phillip Hammond called on the government to now accept the Ombudsman’s findings of maladministration.
“We are not expecting the government to write a blank cheque with tax payers’ money,” he said.
“But it should be looking at using unclaimed pensions and financial sector assets, and at whether forcing a failed pension fund to buy annuities is the best use of scarce resources belonging to fund members.”
Speaking during prime minister’s questions, Mr Blair maintained that the government cannot afford to commit to standing behind the collapse of every pension scheme, while claiming that the current system of compensation is working.
