I beg to move,
That leave be given to bring in a Bill to make provision to enable the Parliamentary and Health Service Ombudsman to investigate advice and information given by the Secretary of State and the Government Actuary relating to transfers of pensions from the United Kingdom Atomic Energy Authority pension schemes to the AEA Technology pension scheme; and for connected purposes.
In rising to present this Bill, I build on the work of my predecessor, now in the other place as Lord Vaizey of Didcot, who introduced the same Bill five months before he stood down. I am grateful to him and to other Members who supported him, as they have me, such as my hon. Friends the Members for Mole Valley (Sir Paul Beresford) and for Henley (John Howell). I am particularly grateful to the AEA Technology Pensions Campaign. There are too many of them to mention, but I will just mention Tony Reading, a constituent of mine, who chairs the campaign and has worked with me closely on getting to this point.
In 1996, the commercial activities of the UK Atomic Energy Authority were privatised, and a company called AEA Technology was created. As part of the transfer of staff to that new company, there was a decision to be made about what would happen to people’s pensions. The employees were presented with what they were told was a time-limited offer, under which they would have 40 days to transfer to the new defined-benefit scheme. They were told that they would get identical, or very close to identical, benefits to those that they were already getting, and that it was unlikely that that benefit promise would ever be broken, so 90% of them opted to transfer.
So far, so routine—except in 2012, less than two decades after the company was created, it went into pre-pack administration and the pensions went into the Pension Protection Fund. At this point, Members may think, “Well, that’s sad for the pensioners, but there have been a lot of problems with pensions turning out to be a lot less valuable than was originally expected, and at least they were in the Pension Protection Fund, which some schemes did not get into.” However, there are two aspects of this case that make it unique.
The first is the promise that was given to the pensioners, including by the Government. They were told that they were going to get identical, or close to identical terms. They were told that it was very unlikely that the benefit promise would ever be broken. They were told they would get a scheme that was no less favourable than the one they were in. They were assured from the Dispatch Box, in fact, by the Minister of the time, 25 years ago, that their terms and conditions and their pension benefits would be fully protected. In fact, on average, their pensions are worth around 35% less than they used to be—some of them 20% less, but some of them 40% or 50% less.
The second aspect of this case that is unique is the role that the Government Actuary’s Department played at that time. It drafted guidance for the employees to help them to decide whether to transfer their pensions, but AEA Technology, the company that had been created, did not like the look of that guidance. It wrote to the Government Actuary’s Department, saying: