Motion made, and Question proposed, That the sitting be now adjourned.—[Margaret Moran.]

May I pay tribute to the many right hon. and hon. Members whose constituents are also victims of the APW pension scandal for their support? It is a good example of all that is best in our Parliament, with Back Benchers working together, regardless of party, for the common good of those whom we represent. I also thank the Minister and his team for meeting a delegation of fellow Members and some of those affected by the collapse of the APW pension fund. We met the Minister late last year, and he listened at first hand to the desperate situation of the workers who were represented at that meeting. However, I am sure that he would be the first to agree that listening is not enough. What we now need is a set of responses that will reassure the members of the APW pension scheme about their future retirement.

Three months have passed since this latest pension failure broached the headlines. The failure left hundreds of my constituents in Eastleigh traumatised by the news that their pensions had been slashed—if they were lucky, to one fifth of their expected value.

The discovery of large deficits in final salary pension schemes has become all too common. It has been caused by a combination of employer contribution holidays, the abolition of tax credits paid to pension funds, and a recent slump in the stock market. It has resulted in many schemes becoming unviable. Sadly, it is not even a new phenomenon. Final salary pension schemes have been under increasing threat since the 1980s. For the record, before entering Parliament I too was a victim of a failing pension scheme, as colleagues from my area may recall. I mention it now in case, by some remote chance and even at this late stage, I might myself have an interest in the Government's proposals.

The Government's own figures show that about 65,000 people have been affected by final salary pension scheme deficits. As we know, employers are required to make good those deficits, but many prefer to close or wind up their schemes rather than continue to incur the cost of closing the funding gap. All too often, firms genuinely do not have the funds to make good the deficit, and paying the pension debt could bankrupt the company. Pension fund trustees are then faced with a choice. They can bankrupt the company, but still not recover the debt; or they can enter a compromise agreement to accept less, but still more than if the company were to go into liquidation. Inevitably, however, it is the members of the scheme who lose out—the pensioners by having their pensions frozen, and the workers by suffering a significant reduction in their deferred benefits.

In general, the decline and winding up of the APW scheme closely followed that pattern, but it is in the particular that we are interested. Our debate provides an opportunity to explore and expose actions that at best can be described as unethical, and it allows us to highlight the deficiencies in the regulations that can result in the failure to provide protection to the employees in the fund. It is the latter who are the real victims.

From our discussions with the Minister and his officials, and from our meetings and correspondence since then, I am sure that the Minister is aware of the detailed events that surround the failure of the APW scheme, but it is important that the salient facts should be placed on the record.

I start by confirming that, under regulations introduced in June 2003, solvent employers who want to wind up their pension schemes have to purchase annuities for all scheme members. For a while, that seemed to stop the wind-ups. Prior to June 2003, employers could wind up their schemes and pay only the minimum funding requirement—the MFR debt—which was usually between a fifth and a seventh of the cost of the annuities. It was understood by most Members that after those regulations came into force, no solvent employer would be able to close an underfunded pension scheme.

However, unscrupulous employers began to realise that the common law that enabled trustees to compromise a debt could still be used if they could show that the new buyout debt would force the employer into bankruptcy. In fact, because the new buyout debt was so much larger than the MFR debt, the new regulations gave employers more scope to compromise.

In the case of APW, the MFR deficit was about £7.8 million, compared with a buyout debt of £55 million. Therefore, while it could be argued that the MFR level of debt could be met over 10 to 20 years—so the trustees would refuse to compromise it—it was obvious from the accounts that the APW group could not afford £55 million all in one go to buy the annuities. Furthermore, APW knew that if it allowed its pension scheme to keep going beyond April 2005, the trustees would not be open to any compromise. They would simply allow the firm to go into liquidation, knowing that the scheme members would receive 90 per cent. of their pensions from the new Pension Protection Fund. APW would also have known that, although the new financial assistance scheme would be a further incentive to trustees not to compromise, at that time the trustees had no concrete information to go on. The Pensions Bill merely stated that all the detail would be provided by subsequent regulations. Therefore, the trustees had no way of knowing whether the APW scheme would be eligible and, if it were, how much it would receive and whether a limit would be placed on members' pensions.

The choice was between forcing the firm into liquidation over the pension debt and leaving members hostage to fortune on the vagaries of the FAS, and the best possible compromise, which would still only secure 20 to 30 per cent. of members' deferred benefits. Should anybody think that the threat by APW directors to put the firm into liquidation was a bluff, I am assured that the trustees received a written ultimatum that unless they agreed to the compromise drawn up in November, the directors would file for bankruptcy the next day. To add insult to injury, the trustees were also told that APW's American parent would then buy the firm back out of bankruptcy, free of the £55 million pension debt, at a knockdown price. So the compromise was made and the bombshell fell on hundreds of scheme beneficiaries, many of whom found their expectations of a secure retirement in ruins. Members were left distraught, having to rethink their lives.

Let me give just one example, that of Karen and Wayne and their daughter Shannon. Wayne has paid contributions for 16 years, and his partner, who has been in the scheme for 11 years, has called the news a kick in the teeth. She said:

"I have a message for the Government. They need to do something about this. It's all very well saying we should build for the future, but if they do not do something to secure company pensions, they will face having more of us relying on their state pensions. They need to put in a clause to stop people being stitched up."

Most people are in no doubt that Wayne, Karen and Shannon are in a devastating predicament through no fault of theirs, or of the trustees of their pension scheme. As the Minister will recall, following his meeting with our delegation late last year, the situation with regard to the APW scheme and the trustees is as follows. At the time when the trustees were being pressed into agreeing a compromise for the scheme wind-up, they were hampered by a lack of information on the regulatory framework of the FAS. They lacked information on the deemed buyback value of members' pension benefits and suffered from the vagueness of the facts about potential support for firms via the FAS when schemes were wound up to avoid their becoming insolvent.

In his response to these points in January, the Minister went to some lengths to describe the Occupational Pensions Regulatory Authority's expectations of the trustees when negotiating a compromise agreement. In what areas, if any, has the Minister been advised that the APW trustees have failed to meet the expectations of OPRA in making a compromise agreement?

I now turn to the situation on deemed buyback of state pension rights. In their negotiations on the compromise agreement, the APW trustees were hampered by a lack of information from the national insurance contributions office on the deemed buyback values of scheme members' state pensions, which were likely to be particularly significant to lower-paid workers.

I have been informed that since our meeting with the Minister things have happened quickly. I am not curmudgeonly; I am grateful if the Minister has taken a personal interest in the scheme and things have moved forward to the benefit of my constituents. I am advised that in late January, NICO contacted the trustees and asked for details of a sample of 20 scheme members who were worst affected by the collapse of the APW pensions fund. Apparently, the results came back from NICO last week. I am sure that the Minister will know that of the 21 cases put forward, 16 qualify for full reinstatement of their rights, three qualify for partial reinstatement and two do not qualify at all. That news will come as some relief to lower-paid APW members.

But life is not that simple. We are told that it will take three years to complete a full scheme reconciliation of guaranteed minimum pension. That will leave hundreds of workers in limbo in the meantime, and will leave those who retire after the scheme winding-up process with nothing to fall back on. We need the Department for Work and Pensions to confirm that pensioners who retire post wind-up will not only qualify for the deemed buyback, but will be entitled to have the benefits backdated to the date at which they retired at age 65. I think that that is the meaning of the law, and I hope that the Minister can confirm that that will happen.

Can the Minister also confirm that his Department has been saying that members' additional voluntary contributions—AVCs—would be lumped together with their ordinary scheme benefits in order to calculate their benefits under the Pension Protection Fund, which will commence after April? Surely he agrees that it would be morally indefensible to penalise prudent members of our society for saving extra for their pensions. That would send the wrong message to the public at a time when the Government want them, and us, to save more for their retirement. I understand that the Department has since realised that that approach contradicted the priority order for benefits in the scheme wind-up set out in section 73 of the Pensions Act 1995. No doubt the Minister will confirm that change of heart by his officials, who are, perhaps, not quite so well versed in the law as I am sure he is.

While the uncertainty about deemed buyback rights is gradually being resolved—albeit at a snail's pace and far too late to help the compromised negotiations for APW—the major difficulty of the application of the FAS remains. I understand, and can even sympathise with, the Minister's concerns that including pension schemes that have been wound up to avoid bankruptcy with those of firms in liquidation puts him, the Government and the taxpayer at some risk. Clearly, the Government do not want to open the floodgates to firms that want to offload their pension liabilities on to the taxpayer, particularly if they continue to trade and subsequently return to profit to the benefit of their shareholders, but not necessarily their workers.

I am following closely what the hon. Gentleman says. Although I understand his argument about opening the floodgates, would not it have been better for all concerned if the eligibility criteria for the FAS had been clear from a much earlier stage?

I agree. That is self-evident, and is an issue that I hope we shall address to the Minister in some numbers today. I hope also that we will receive a sympathetic response from him.

I return to the point that I was making. There is an issue regarding how big the problem is and whether the taxpayer should bail out people who are less careful in the way in which they run their businesses. In the case of the APW scheme, even a cursory inspection of the historic figures—not the accounts prepared a few months before the negotiations on the pension scheme, but those running back for several years—would show that there is not a chance of the £55 million pension debt being met. The merest glance would show that.

The Minister will know from correspondence with colleagues who are here today that the APW trustees were faced with a choice of accepting a compromise or seeing the company become insolvent. On the final day, 5 November 2004, when the company was still allowing discussions and the guillotine was about to fall, the trustees could not know of the Minister's subsequent decision to allow companies that became insolvent after May 2004 to be eligible to join the FAS. That decision had still not been announced when the APW scheme was wound up in the High Court on 17 November. I do not blame the Minister for that; that is how the sequence developed. However, the trustees for the APW scheme were trying to negotiate with both hands tied behind their backs because that information was not in the public domain.

It seems likely that only a limited number of schemes will be in the position of the APW scheme, so there will be a limited number of genuine candidates for inclusion in the FAS. I thank Mr. Denham for his suggestion that it would be perfectly fair to ensure that, as a result of the compromise, no member of the APW scheme is worse off than they would have been if they had been eligible to join the FAS. That is a telling and valid point. I ask the Minister to call on his officials to explore that suggestion in detail. It should be possible to establish how many firms would be involved and the liability that would therefore fall on the FAS.

In that context, the Government announced on 8 February that they had had an unexpected windfall of £6.2 billion in 2002–03 through unclaimed benefit entitlements. That gives rise to the suggestion that diverting even a small percentage of that largesse—an unexpected treasure—to bolster the £20 million annual funding of the FAS would make a huge difference.

Still on the subject of funding, is there any reason why the FAS could not be run in the way that it is proposed that the Pension Protection Fund be run? Could not the FAS take assets of schemes that qualify and that have not yet distributed all their assets to members? Thus the FAS fund would not amount simply to £20 million a year; it would be substantially more. For the record, the APW fund alone was worth £33 million. PPF fund moneys could be invested in the same way, and benefits could be paid to members on reaching the age of 65, possibly through the state pension system.

It is clear that the APW pension collapse has raised many questions among scheme members, many hundreds of whom live and work in my constituency. I conclude my speech this morning by recounting just a few of their questions. There are many more questions, but time will not allow me to put them on the record. If a firm avoids insolvency by winding up its pension scheme, why could it not claw back contributions when it returns to profit? That would be a perfectly logical thing to do. Why have the Government not yet followed European legislation that provides better protection for pensioners and their pensions? When will the Government review information issued in booklets and leaflets by OPRA, by the Department for Work and Pensions and by the FSA to ensure that they do not give a false sense of security to pension scheme trustees and members? This is a plea from people on the front line who are trying to make these things work, not from those of us sitting comfortably in Whitehall, as we often are. Did the DWP and the Treasury receive actuarial advice that scheme members should be told that full funding on minimum funding requirements did not mean that all liabilities could be met if the scheme were wound up? Finally, my constituents want to know whether the Government are aware that pension scheme members throughout the country have little confidence in their ability to protect and preserve the investments that employers are making for a decent retirement.

I congratulate Mr. Chidgey on seizing the opportunity to use this Adjournment debate to set out in detail the ramifications of the APW case. Like several other hon. Members in the Chamber, I have a number of constituents who have been dramatically affected by the collapse of the APW pension scheme, although their number is relatively small . They were based at the Uxbridge site, and Mr. Randall, who has to go to a Statutory Instrument Committee, has taken up a larger number of cases. His constituents worked with constituents of mine, and they, too, have been dramatically affected by the collapse of the scheme. I am grateful to my constituent Mr. Alan Harwood for contacting me, for bringing together those of my constituents who have been affected and for providing me with briefings and advice throughout our discussions with Ministers.

The cases that have been brought to me are all equally heart-rending. They involve people who have invested in the scheme for years, who have properly saved for their retirement and who will now receive a relatively trivial amount as pensioners. Some—this is easy to say but difficult to describe—will face straitened circumstances and, in some instances, real poverty. The problem has arisen when they least expected it: they thought that they were in a secure scheme, and they were preparing for their retirement by contributing in exactly the way that successive Governments had advised them to do. They also placed their faith in their trustees. To be frank, the trustees have acted on the basis of legal advice on every occasion, and they have even taken action to put their legal advice and judgments before the courts, which have judged their actions to have been legal throughout.

When we debated the legislation that the Government introduced to protect pensions, hon. Members throughout the House welcomed the fact that the Government were seeking to ensure that none of our constituents would be further disadvantaged by the collapse of pension schemes. During those debates, no one, as far as I can remember, raised the issue of the compromise settlements that were being enforced, particularly after takeovers. In welcoming the new legislation, however, we undoubtedly thought that it would give adequate protection to most of our constituents and that we were redressing a wrong that many of them had experienced.

However, this is a special case, and I plead it as a special case. Our constituents have been affected because they have been caught in a specific time frame. After the legislation was enacted, the guidance was not made available as promptly as we would have hoped. As a result, scheme members have been denied access to the protective mechanisms that the Government's new legislation introduced. At the same time, they have no redress against their trustees, because their trustees acted legally and in good faith; indeed, the courts have judged that they acted legally.

The case before us is an example of a specific problem; I am not sure how many other examples there are, but I doubt that there will be many. In the very specific period before the new advice and guidance were given, trustees were left having to exercise their best judgment, based on legal advice. In this instance, it would have been better if they had allowed insolvency to occur. That is certainly true for my constituents, who would then have been protected under the new legislation. However, the trustees reached a judgment—quite rightly, in the light of the legal advice that they were given—to make a compromise agreement to avoid insolvency and keep the firm going. In doing so, they thought that they were looking after the fund's long-term interests.

I think I understood the hon. Gentleman to say that the trustees would have done better to force the company into insolvency because scheme members would have got something better in those circumstances. However, it is important to put it on the record that that is not necessarily true, because none of us knows what they would have received under the financial assistance scheme, although we know that the FAS does not have enough money in it. Scheme members might have got practically nothing.

It is a matter of judgment and we are not clear. Every indication that we have received so far—in statements, representations and discussions—is that pensioners may well have been in a more secure position, particularly with regard to the moral duty that would have been placed on the Government to ensure their protection. There is a moral duty on the Government to act. Trustees acted without that guidance—properly, legally and, they thought, in the best interests of pensioners—and now many of our constituents find that they face penury in their old age, or at least significantly reduced pensions.

The solution is fairly straightforward. We should deal with the situation as a special case and consider applying the legislation and guidance in such a way as to give the members of that pension fund access to the protection that we had thought would be available in cases of insolvency.

I have also received representations about the advice and information that was given in the various booklets that successive Governments published. Most of our constituents felt that they were protected by past legislation and past assurances or by the new legislation, which most of us supported. Many feel that their hopes were raised by the initiation of the new legislation on pensions protection, and that they were misled by that information and by successive Governments, who persuaded them to buy into those private pension schemes, so that they could have secure futures.

I therefore urge the Minister to consider how we can interpret the new legislation and guidance to deal with the situation. I do not believe that that will open the floodgates. There may be one or two small examples that are similar, but the moral onus is now on the Government to act. The delay in publishing the guidance has meant that the trustees, acting properly and legally, have disadvantaged our constituents in a way that the Government should redress.

On that basis, I hope for a sympathetic hearing of our constituents' pleas. However, if the Minister cannot give us firm commitments, he should at least not close the door and should allow us to come back with further detailed suggestions about how to deal with individual cases. The deemed buyback route was open to a number of our constituents. However, as has been mentioned, the delay in implementation will not satisfy even them, so a special measure and specific guidance may be needed. I would warmly welcome the Minister's consideration of that proposal.

There can be little doubt about what has happened to company pension schemes in the past few years. The volume of assets in such schemes was one of the great success stories of the British economy and the sheer amount of funded pensions was something on which we did much better than comparator economies. That success has almost become a disaster area. I have no doubt that the crisis was precipitated largely by the decision to tax the pension funds so heavily, with a £5 billion-a-year tax, the effect that that had on the savings market, and the knock-on effect on the value of the stock market. In effect, that hit the pensions industry with a double whammy.

Of course, there is the question of how far that merely expedited a trend that was discernible elsewhere. The withdrawal from defined-benefit pension schemes has been measurable in other Anglo-Saxon economies, and they have not had our tax whammy. We must consider whether pressures would have built up, although perhaps at a slower rate, on company schemes, such as that of APW, anyway, given that people are living longer and causing a greater drain on companies' resources.

What happened at APW seems to be of a different order, however. The sharp practice that was involved is breathtaking, and it is intolerable that the trustees should have been put in such a disgraceful position. In effect, a gun was held to their head and a timetable—a guillotine—was set within which they had to reach a decision. We must examine the means by which such pressure on trustees can be avoided.

My suspicion is that the trustees made the right decision, certainly in respect of what they knew at the time. It was an awful decision to have to take, but I believe that they made the right one. However, difficult questions of public policy will arise if, when the precise terms and arrangements of the FAS become clear, it seems that the trustees would have done better for their members and beneficiaries had they taken the other decision and forced liquidation. As we do not want to provide a perverse incentive, perhaps the Minister should consider the incentives that we need to build into the system to encourage trustees who are put in a similar position to those at APW to come to a decision that is collectively of benefit to the trustees, but also takes account of the greater public good.

I want to highlight something that my constituents who have suffered from the APW situation have put to me. Their request is for urgency and certainty, although I am not sure that the two are compatible. They want to know quickly where they stand, and they emphasise that the ongoing discussions and considerations of Ministers should be expedited. When I face them in my surgery, I question whether it would not be better to wait and let the thing take its course rather than to force a quick decision, because the outcome might be better. Nevertheless, as one would naturally expect, people who are in the middle of their working life, and many are approaching the end of their working life, are worried. They have made contributions, but they suddenly find that certainty has been taken away. They want quick redress, and I hope that the Minister will take on board the sense of urgency that our constituents properly feel about the matter.

Mr. Chidgey clearly set out the background. I wish to re-emphasise his point that MPs on both sides of the House will work together on this issue. There has been a meeting with the Minister, the hon. Gentleman and I met trustees in my office in Southampton, and several of us attended a meeting organised by one of the trade unions involved. It is important to make progress so that we take some positive news back to constituents who have been affected.

Among the many cases that have been publicised is that of one of my constituents. He was due to retire seven days after the winding up of the scheme was confirmed. His pension of less than £10,000 became a pension of less than £2,000, and the 25 per cent. lump sum disappeared. He is in the unfortunate position of suffering from a degenerative disease, so he does not have the option of seriously looking for work into his late 60s and 70s to put the situation right. It is difficult for most of us to comprehend exactly what it would feel like to find ourselves in that position a week away from retirement, but we are talking about such people today.

I thank the Minister for his interest and, through him, a number of his officials, who have been very helpful in talking me through some of the more technical details. I appreciate that enormously. I have two points to make about the history of the situation. The first is that when we look back at our debates, we sometimes realise that there was a missed opportunity. When the Pensions Act 1995 went through Parliament, there was a proposal for a central continuation fund into which the funds of schemes, such as the one under discussion, would have been paid. That would have been run on an ongoing basis. Much of the real deficit in the APW scheme comes from the fact that it has been closed. The deficit in the MFR is quite small on an ongoing basis, but once a scheme is wound up and annuities must be bought, the deficit becomes huge. Had that proposal been adopted back in 1994–95, we would not face many of these problems.

The second point, which supports the comments made by Mr. Swayne, is that the trustees were put in an impossible position. My initial reaction was to be highly critical of them, but having gone through the circumstances in some detail, I feel that they do not have a strong case to answer. Even at this late stage, the Minister might want to consider whether trustees could be protected against being forced into compromising on such disadvantageous terms. Such proposals have been floated in previous meetings with him.

There are two main ways in which we can make progress. Deemed buyback was included in the 1995 Act but has never been implemented. If APW members were to gain access to deemed buyback, it would be a historic first because it has never been available to any other set of members. I believe that is the case, but I can be contradicted if wrong.

Essentially, deemed buyback means that people who contracted out of the state earnings-related pension scheme are treated as though were in it. For most people in a final salary scheme, they would not get as much as they would have done, but it could be significantly more than is currently available.

I have been provided with one calculation of how the scheme might affect somebody who has recently retired. I use the figures with some caution because every case is different and it would be wrong to generalise that the proportions or figures arising from a specific case would apply to any other scheme member. However, they illustrate the possible difference. For an individual being paid a pension of £1,848 a year at 20 per cent. of what he should have got—£9,240 a year—deemed buyback could pay him £5,512 a year. I suppose the conclusion that we draw from that depends on how we look at the figures. That amount is substantially less than £9,000 and, from that point of view, probably pretty disappointing. On the other hand, it is substantially more than is currently on offer.

Calculating deemed buyback has been difficult because the relevant actuarial tables have not been made available. I understand that some progress may have been made on that, and that my hon. Friend the Minister may have played a role in it. The hon. Member for Eastleigh referred to that. No one would be forced to take deemed buyback, but for some members it looks as though it could be a significant improvement on what is on offer.

I want to reinforce two points made by the hon. Gentleman. First, with the scheme under way, it would be important that members knew their position and could take a decision as quickly as possible. It would be unfortunate if it took three years to resolve the scheme's position and to offer advice to each member. I hope that the Minister will examine that.

Secondly, the Department has suggested that even if the scheme took three years to resolve, there would be no backdating of the pension payment. That would not be acceptable and I cannot understand the legal position for it. Will the Minister confirm whether backdating would occur, even if he has to get back to us at a later date? The timing would then be a problem only for those people whose pensions are just about to be in payment.

There seems to be a query, which I cannot understand, about whether deemed buyback would be available to those whose pensions are in payment—either those who have just come into that position or those who had been in it for some time. Again, I cannot understand why that should be the case, and I hope that it can be quickly resolved. Nobody would suggest that deemed buyback is some sort of knight on a white horse coming over the hill to rescue all scheme members. People are facing a pretty desperate situation and a number of longer-serving, lower-paid employees, who are least likely to have other retirement savings and pension provision, could benefit most. If the Minister can build on what he has done so far to move that along, that would be helpful.

To reinforce what has been said, I want to address the issue of the financial assistance scheme, the second main way in which we can make progress. I understand why any Minister would be concerned about opening the floodgates of support to schemes when the parent company is still solvent, still trading and appears to have walked away from its liabilities. The dangers of the Government stepping in and saying that they will underwrite all schemes in such circumstances are obvious. I do not think that any hon. Member would advocate that.

A close examination of the APW scheme suggests that that scheme and only a fairly small number of other schemes fall into a category of schemes that need attention. Those schemes were forced into making a compromise between the time of the announcement of the financial assistance scheme last May and of the Minister's announcement last November that schemes that went insolvent after May would be eligible for the financial assistance scheme.

Such schemes are in a special category because, however hard they tried, the trustees who took the decision to compromise could not possibly have known whether their scheme members would be eligible for the financial assistance scheme. They might have guessed at it, as they did in the APW case, and taken their best shot at working it out. However, in practice, they had to go to the High Court and wind up the scheme before the Minister's decision. As the hon. Member for Eastleigh said, there is no doubt that the trustees were explicitly told that if they did not agree to the compromise, which brought extra money into the scheme, the company would go insolvent and there would be no extra money.

I want the Minister to consider that argument and see whether he can ring-fence not just the APW scheme, but the relatively small number of schemes that got into the same difficulty over that period of time. That would be helpful. As people—in particular, our constituents—will read this debate, it is important not to try to mislead anyone. None of us should pretend that the financial assistance scheme will solve all the problems for all scheme members. The Minister set out clearly in writing that that scheme will be targeted—we do not yet know by how much—at those scheme members who are nearest to retirement, whose needs are greatest, and who have the least opportunity to adjust and make further provision for the future. Even if we were to get the APW scheme into the FAS—I hope that we do—I do not want to pretend that it would solve everyone's problems.

Looking at the available tools, it seems to me that a combination of the rapid implementation of deemed buyback and the extension of the financial assistance scheme to the APW scheme would make a considerable number of people better off. It is not about restitution. No doubt the campaign for that will continue in other ways and in other places. I wanted to focus on those two aspects of the scheme because it is within the Minister's power to deliver on them.

Most of the people who have spoken before me know far more about this area of policy than I do, so I shall talk about what it means in human terms, to four of my constituents, that their pensions have, effectively, been stolen from them. Mr. Andrew Kellaway, Mr. T.N. Snelgrove, Mr. Alan Harding and Mr. Graham Henley all wrote to me independently towards the end of last year, and I will, with the indulgence of the House, read an extract from Mr. Henley's letter.

Mr. Henley said that he and his wife were "shattered" to receive a letter from APW Electronics Ltd., informing them that it had wound up the company's defined benefit pension scheme in deficit. From their point of view, the company had

"held secret negotiations with the trustees to this end back in August."

Mr. Henley says that he

"like thousands of others in this country believed that this was not possible. That changes in the law since the Robert Maxwell pension fund scandal had sorted this out, and that pensions were now safe."

He relates that he and his wife

"have two sons and have a mortgaged home" and that they have both worked very hard to bring their sons up

"as respected members of the community and are proud of the result."

He continues:

"We have borne the cost of their education and upbringing and have never . . . received any financial assistance. On three occasions during my manufacturing engineering career my job has become redundant".

It is only because he has lived a prudent lifestyle that he has been able to plan for retirement effectively.

I am sure that constituents of all the hon. Members who have spoken so far would be able to repeat such moving and extremely disturbing facts ad nauseam—a catalogue of misery that has been inflicted. As Mr. Denham has pointed out, that has engendered a great deal of cross-party support, precisely because of the injustice done to so many people.

I pay tribute to Mr. Chidgey. He has spearheaded the campaign relentlessly. However, I also pay tribute to Mr. Roger May of Blake Lapthorn Linnell, the professional team that acted as legal advisers to the trustees of the scheme. Over and above what they tried to do to help the work force, they have taken an interest in the issues on principle, and have gone to a great deal of trouble to analyse what has gone wrong in the case.

I refer now to a short memorandum that was circulated to us in the meeting with the Minister in December. The specialist advisers point out that the guidance from the regulatory authority, OPRA,

"is not working."

Trustees of the relevant pension funds

"can follow the OPRA guidance to the letter, and still end up in a situation where the members lose 70 per cent. or 80 per cent. of their promised pensions."

The key to the situation lies in the fact that the parent company is a foreign company and that the foreign company has, as it were, the first charge on the assets of the domestic company. It can happen that the domestic company is technically insolvent—it would normally go out of business, when, at least, its work force would come under the protection of the financial assistance scheme—but is kept alive on a form of life support by small injections of cash from the parent company.

Then, when the point is reached where the parent company wants the conglomerate to walk away from its obligations to the work force, it suggests a compromise in which the UK pension scheme is wound up and a small amount of money is paid into the scheme. Originally the parent company, with magnificent generosity, proposed to offer 1 per cent. of the debt that it owed in respect of pensions to its own work force.

Bearing in mind that it remains possible and legal for a foreign parent to put the UK subsidiary into liquidation and then buy the business back from the liquidator, leaving behind the pension liabilities, we have a couple of recommendations from those specialist advisers. They have suggested that there ought to be a ban on

"pension scheme compromises where members will lose more than (say) 30 per cent. of their pension benefits. The compromise would not be allowed to go ahead unless the scheme actuary certified that all scheme members would receive at least 70 per cent. of their promised scheme benefits."

The advisers also recommend that schemes where the employer—that is to say, the British domestic employer—

"only remains solvent because the scheme trustees have compromised the buy-out debt, and where the members have lost" a large percentage of their benefits, should become eligible for financial assistance from the Government.

I was not happy with the meeting that we had with the Minister in December. I felt that he was focusing far too much on the fact that the company was still trading, even though the only reason that it was still trading and had not become insolvent was that a gun had been held to the heads of the trustees of the work force, in that they had been told that the company would go insolvent unless they allowed 80 per cent. of its pension funds to be—I make no apology for using this word—stolen from them.

At that meeting with the Minister I was able to remind him that, from time to time, there had been talk of the Chancellor of the Exchequer using the unclaimed assets of dormant accounts in banks and building societies for various good purposes. I was able to point out that the spokesman for my party in this area had pledged that, as a result of tens of thousands of people having done the right thing by paying into a company pension scheme, but having lost their savings when the company became insolvent, the Conservative party would use the unclaimed assets in dormant bank and building society accounts to rebuild the pension funds of wind-up victims. That is a practical proposal. It would also meet the situation where, even when the financial assistance scheme goes into effect, it might be found that it would not make up the shortfall to anything more than a limited degree. That shortfall could be met by a policy of that sort. I did not get a clear answer from the Minister at the meeting, so I ask him again whether he will match that pledge to the victims of what has happened in this and other cases.

I congratulate my hon. Friend Mr. Chidgey, who spoke out powerfully, knowledgeably and effectively on behalf of the APW pensioners. I bumped into him at breakfast this morning, and it was the only time that I have discussed deemed buyback over my fried egg. [Interruption.] Strange but true.

It was not only my hon. Friend who stood up effectively for his constituents. Mr. Denham also brought a great deal of knowledge and experience of the area. His colleague, Dr. Whitehead, who chaired the meeting that I attended with APW pensioners, and Members from throughout the House have worked together on behalf of the group. Regrettably, there have been too many similar cases. There has been a macabre procession at Work and Pensions questions every month, whereby an hon. Member whom one has never seen before at Work and Pensions questions has suddenly discovered the intricacies of pension wind-up because, tragically, it has happened on their patch.

One of my reflections about this episode is that, when the financial assistance scheme was announced last summer, we welcomed the £20 million a year that was offered but pointed out that solvent firms were excluded. We tabled amendments to try to get solvent firms included and were opposed by the Government. At the time, there was a sense of euphoria—that there had been a campaign, that the campaigners had won and that everything would be fine. Nobody was willing to listen or to say, "Hang on a minute. The emperor may have a few clothes, but not nearly as many as we are being led to believe."

A problem with the financial assistance scheme, as the right hon. Member for Southampton, Itchen hinted, is that it is like a cake that was baked last summer. More people have laid claim to a slice of it since then, and there is a danger that they will end up with only crumbs because the Government have refused to make it bigger. The £20 million that has been allocated is wholly inadequate, and even if we succeed in getting the APW workers into that scheme, a few of the hardest cases—the right hon. Gentleman cited a very poignant one—may receive a reasonable amount of compensation, but many others may get precious little.

One source of redress that has not been mentioned, perhaps because it is not in the gift of the House, is the parliamentary ombudsman. Several hon. Members have spoken today about misleading literature and the fact that people read leaflets and trustees were sent information that talked about "guaranteed" minimum pensions, which in fact were not guaranteed, and that discouraged people from opting into insecure personal pensions because their company pensions were safe. So much of the literature, advice and culture of the time gave people an inaccurate sense of certainty. I contacted the parliamentary ombudsman last spring, as did several other hon. Members. She is investigating the position of these workers, and given the Government's unwillingness to offer more, she may be the best hope for some of the workers about whom we are talking today.

Several points were made about solvent wind-ups. The Government's constant refrain has been that it is the company's job, not the taxpayers', to put in the money. As has been said, however, what happens when the company will not put in the money and cannot be made to do so? That is the important point. Will the Minister comment on the power of the regulator in this context? Under the Pensions Act 2004, the powers of the new pensions regulator will be backdated to last April to pursue, for example, parent companies to put in money if there is a shortfall. Will the Minister say whether that might be relevant in this case? Can the APW workers hope that the new regulator will tell the parent company that it must put in money before the taxpayer even thinks about doing so? Does the regulator, who I believe has a backdated power in that respect, have the power to do such a thing?

I am sure that APW scheme members will read the record of our deliberations today, so will the Minister clarify precisely what we mean by deemed buyback? Are we talking about returning some of the balance of the scheme to the Government, in return for which people will be treated as if they had been in SERPS and the state second pension? Given that the power has been on the statute books for 10 years, will he explain why it seems to have been used so little? Will he explain in layman's terms what the problem is?

The right hon. Member for Southampton, Itchen rightly pointed out that when the decision was taken to accept the compromise agreement, the trustees could not have known that they might fall within the scope of the FAS. Indeed, they still might not do so. Even if the Minister was to make that announcement today, there is no moral hazard because no one can act in the future on the basis of a decision announced today. Will he at least consider the suggestion that schemes that have already been the subject of compromise agreements might fall within the scope of a properly funded FAS?

Mr. Swayne made an important point about incentive structures. Compromise agreements may be in the greater public interest if they keep the firm running, particularly if the firm then became profitable again, so why should there not be a claim on the future profits of the firm? Moreover, given that presumably the Government want employment rather than unemployment, and that the taxpayer must foot the bill for unemployment, might not the taxpayer want there to be compromise agreements in some cases? If the Government tell a company that members of its scheme are stuffed if it implements a compromise agreement and the firm is still solvent, why would the trustees do it? Surely we should give trustees the right incentives for the greater good, without penalising scheme members. I am not convinced that the current incentive structure does that.

My hon. Friend the Member for Eastleigh referred to the treatment of AVCs. Will the Minister clarify this point? There has been a suggestion recently—I had heard it from other sources, including my hon. Friend— that in order to meet the shortfall in the fund, claim might be made on the AVCs that people had put in, instead of ring-fencing them and saying that that was essentially personal saving that happened to be done individually through the scheme, and that that should not be used to reduce in any way the Government's or taxpayers' liabilities. Can the Minister clarify the position on that?

A number of the issues that have been discussed relate to the coverage and adequacy of the financial assistance scheme. Again, the hon. Member for New Forest, West presented the point well. The impression that I got from the members at the trade union-sponsored meeting was that they very much wanted to know where they stood. However, here we are, many weeks later, and they still do not—indeed, it might be a matter of years before they know where they stand on deemed buyback. Scheme members want certainty.

I wonder whether the Government are stalling until the end of March. If I were in their position, I might be tempted to do the same. Once we get to the end of the financial year—the Minister smiles broadly at this—nothing else can go into the financial assistance scheme, because the Pension Protection Fund will be up and running. Have the Government been stringing us along all this time, so that they can announce the rules of the financial assistance scheme in April, because they know what the price tag attached will be? That would be understandable but makes life even more difficult, not only for the APW workers but for many others in similar situations. Can the Minister at least assure us that on 6 April—assuming that the House is still sitting then—he will tell us how the FAS will work and who will be in and out, and at least put an end to that uncertainty? I might have the dates wrong, but I can see why the Minister would want to do that on the first day of the new financial year rather than the last day of the previous one.

We have heard of the powerful human side of such tragedies, which were preventable. Interestingly, the right hon. Member for Southampton, Itchen mentioned the failure of the Pensions Act 1995 to introduce a central discontinuance fund. That is correct, but the Government could also have set up the financial assistance scheme on that basis. In a sense, the opportunity has been missed again, because had the financial assistance scheme taken over the assets rather than simply making hardship payments, it could have been more generous, even with the same level of Government funding. History almost repeated itself only last year—the previous Government failed to grasp the nettle, as did this one, unfortunately.

We are united in wanting to stand up for workers who have done the right thing—worked hard and saved hard—and yet have had the rug pulled from underneath them. I hope that the Minister will do more than say that the firm should have found the money and that he cannot say any more for many more weeks to come.

I begin by congratulating Mr. Chidgey on securing the debate and apologise for missing the first couple of minutes of his speech, owing to the weather.

The subject is important and, as Mr. Webb said, we keep returning to it. The reason is not simply that such tragedies occur fairly regularly, but that there is still massive uncertainty over compensation. I recently had the opportunity to meet some of the APW workers affected, when they came to lobby us. As we know, many of them—perhaps most—look to lose some 80 per cent. of their pension rights. Our hearts go out to them, particularly those in the cases that various hon. Members have mentioned.

It is heartening that this debate has been so well attended, with contributions from hon. Members in all parts of the House, including John McDonnell, my hon. Friends the Members for New Forest, West (Mr. Swayne) and for New Forest, East (Dr. Lewis), Mr. Denham, and Mr. Randall would have liked to participate, but, as has been said, he has other business in the House.

The FAS has, to put it mildly, a chequered history. In a letter in The Times today, that redoubtable campaigner and former Government adviser Dr. Ros Altmann describes it as being responsible for a "cruel deception". As time goes on it becomes difficult to disagree with that judgment. In his opening speech setting out the background to the APW issue, the hon. Member for Eastleigh described the real effects on real people in yet another failed scheme of the vagueness—I think that that was his word—around the rules for the FAS.

The hon. Member for Northavon may or may not be right in accusing the Government of stalling over the FAS, but the Minister cannot argue that the Government have been quick to set out the eligibility criteria for taking advantage of it. As we know, it had a troubled birth: it was produced in a hurry in May 2004, when the Government were in a tight corner on the legislation. However, one would have thought that, by now, we would have significantly more detail about how the scheme will operate.

The hon. Member for Northavon talked about the price tag, but that is one issue that we cannot lay at the Minister's door. Although this is a dynamic and ongoing situation, with schemes failing as time goes on, the price tag is, bizarrely, already known. It is the only thing that has been clear from day one, because the Chancellor coughed up £400 million—not a penny more—to provide for the financial assistance scheme. That was long before the Government did any research into how many people would be affected, let alone into the ongoing dynamics behind cases such as that of APW.

Of course, one of the paradoxes about the Chancellor apparently coughing up £400 million is that he actually did nothing of the sort. The money was already in the Department's budget, and the Department had to make savings elsewhere in its budget to find the money for the financial assistance scheme.

The hon. Gentleman makes a very good point.

So, the price tag is known, and all the claims, including new claims up to the end of the FAS's time scale, will have to be squeezed into the £400 million.

We have had a variety of statements about the FAS—we had one in June 2004 and another in December—but they have not shed much light on how it will work. It was indicated that the Government would be in a position early this year to announce indicative assistance levels and the like, and I hope that the Minister is in a position, finally, to give us some clear rules for how the FAS will operate.

As I said, the figure of £400 million was woefully inadequate from the start. When it was produced, we already knew that 65,000 to 70,000 workers had lost pension rights. Since then, we have had Turner and Newell, APW and other, perhaps less publicised, failures. As my hon. Friend the Member for New Forest, East said, Conservative party policy has consistently been that we should use unclaimed assets as happens in other countries. The Government had set their face against that until the Chancellor decided that he would use unclaimed assets, although for other purposes, in his recent Budget.

So, what have Ministers desperately been trying to do? One slightly feels for them because they were given the price tag at the start and have since been desperately trying to fit it round the worsening situation. They have tried to start limiting the eligibility criteria; they have been talking down the likely level of compensation; and they have started to stress, as one of their departmental mantras, that the FAS offers not compensation but assistance, which will be pitched at a much lower level than that available under the PPF. When even that began to stretch the money far too far, they suddenly announced, very late in the day, and contrary to everything that they had said during the passage of the Pensions Bill, that the PPF could be retrospective in certain circumstances. I am a little hazy on the chronology as regards APW, but would the trustees have decided to enter into the compromise had they been clear that, given the right sort of act of insolvency, they could have benefited from the PPF when it opens its doors in April?

On the face of it, that is no help at all to APW. Indeed, if one reads the Library note on all this, as I am sure you have, Mr. Deputy Speaker, one sees that the position is very clear:

"Moreover, schemes will only be able to enter the PPF if the sponsoring employer has experienced an 'insolvency event' . . . It appears that the compromise agreement has prevented APW from having such an event."

So, as regards the PPF and the FAS, the compromise has had a potentially disastrous effect on the rights of pensioners and deferred pensioners. I have great sympathy with those involved. The right hon. Member for Southampton, Itchen said that it is easy to start with the view that they got it wrong, but as people say in America, they were caught entirely between a rock and a hard place, as we have heard. It is unfortunate that a combination of the Government's vagueness over a long period about the way in which the FAS will operate and a very late announcement that the PPF could be retrospective, may well have prejudiced the decision taken by the trustees, with all the effects of which we have heard. As I have said before in these debates, the distinction between solvent and insolvent wind-ups is wholly artificial. The workers have no input or control over the wind-up; they are merely the ones who end up losing out.

We have heard about the compromise, but we and the workers need to hear from the Minister whether the compromise has had the disastrous effect that—from what we have heard—it may well have done, and will shut out the workers from any help from the PPF or the FAS. It is, however, interesting and mildly encouraging to read recent comments in the Daily Echo, which I believe is a Hampshire newspaper.

And a very good one.

God's own newspaper.

A good one, I am told from two sedentary positions. The paper obviously has good information, as it says:

"The Daily Echo has learnt from a well-placed source at Westminster that pensions minister Malcolm Wicks is 'sympathetic' to the APW victims."

Later, it says:

"However, it is understood that the Financial Assistance Scheme is being looked at again regarding eligibility criteria."

As they used to say in Private Eye, and for all I know still do, I think we need to be told.

I begin by thanking Mr. Chidgey for securing this debate on a very important topic. It is not a subject of mirth; we are all sympathetic to the plight of that group of APW workers. We have had contributions of differing kinds. There was an authoritative contribution from my right hon. Friend Mr. Denham, and a useful contribution from my hon. Friend John McDonnell. There was a more political contribution from Mr. Swayne, a useful contribution from his hon. Friend Dr. Lewis, and helpful contributions from the Front Bench.

As has been noted, I have had meetings with many Members whose constituents have been affected by the wind-up of underfunded pension schemes, some of which have been due to the insolvency of the sponsoring employer, and some where a scheme has started to wind up with a solvent employer. The APW situation has been clearly described, and I recently met several hon. Members to discuss it. I actually thought that there was one dissenting voice, but it was a thoughtful and serious meeting. It was also helpful that some of the workers affected were at the meeting.

In the time allocated to me I want to describe generally the situations that we have had to consider in developing the FAS and addressing issues about solvency and insolvency. I then want to say as much as I can about APW Electronics Ltd. specifically, and if time allows I shall say something about deemed buyback.

At the meeting I have described and at meetings with members of other schemes who find themselves in similar circumstances, I have always been struck, as any of us would, by the distress and anxiety that those very difficult circumstances have caused members and their families. The issues are often complex, involving the financial and retirement futures of our constituents, the legal position of the trustees of the scheme and how they interpret their responsibilities, and the position and attitude of the sponsoring employer. As colleagues know, because of the concern generally we have legislated through the Pensions Act 2004 to establish the Pension Protection Fund, which I am pleased to say will be opening its doors from April. It will bring immense security to people in defined-benefit or so-called final salary schemes. There were, however, groups of workers who were already in debilitating circumstances due to their pensions, hence the establishment of the financial assistance scheme. We have been working hard to reach a point where we could provide more information about eligibility for help under the financial assistance scheme. In my first statement to the House I noted the milestones to be reached in advancing the principle of the FAS towards practice when the scheme opens in spring, with payment of benefits thereafter. We have kept to those milestones and the FAS will be open in the spring.

On that very point, it has been drawn to my attention that today's Order Paper shows that the Minister will provide the House with a written statement on the financial assistance scheme. I do not want to steal his thunder this morning, but how many schemes are likely to be in the list of those that the FAS may be able to help? What percentage of the value of the pensions will be awarded as an assistance package? Most importantly, will APW Electronics be one of the firms on that list?

I shall deal with the specific circumstances of APW a little later in my speech, but I was about to say that it would have been a difficult situation for me, particularly if it was a little later when we said more about the FAS. Obviously, it would have been more convenient for the purpose of this debate if we had been able to issue our statement yesterday. However, that has not been possible; it will be available soon in the House of Commons.

Mr. Webb lapses into cynicism from time to time—on most days—saying that we have been stringing things along to delay the statement. Well, a further statement about the FAS will be available soon; it will cover 380 schemes. That shows the size and complexity of the task, and I make no apologies for the fact that we have been working through the details, collecting information. Although hon. Members understandably often talk about the scheme with reference to their own constituencies, it is a big and complex issue. There may be a chance in the uprating debate this afternoon—if Mr. Speaker will allow it—to consider some issues relevant to the FAS, but I am anxious to deal with the particular subject of the debate: APW.

Among other things, the statement includes a list of potentially eligible schemes; APW Electronics is not on that list. That is the situation at the moment. The list is a long one, of 380 items, but is not necessarily exclusive. In some circumstances others could be added to it.

I realise that an explanation for what is not on the list will be cold comfort to those who, through no fault of their own, have lost out. Nevertheless I think it is important that people understand why we are where we are. We consulted widely on the definition of employer insolvency and came to the conclusion that for financial assistance scheme purposes we should go with a general definition that captures schemes where the sponsoring employer no longer exists and where the insolvency may have occurred some time after winding up started. That definition will be similar to the definition of insolvency used by the Pension Protection Fund.

We shall also include some companies that have undergone members' voluntary liquidations, where a declaration of solvency was made at the time of wind-up but the company is now no longer solvent so no employer exists to support the scheme. I hope hon. Members will agree that the definition is entirely in keeping with the intentions that I outlined to the House on Second Reading of the Pensions Bill.

It is our judgment that we cannot provide what would in effect be a blank cheque to help all those who have suffered pension losses. I also said that we would need to consider in detail the implications of any definition of insolvency that we could use, and that it was also our intention that people would not be ruled out on technicalities.

rose—

I am reluctant to give way, because of the range of issues on which I want to speak; is the matter really pressing? Hon. Members want answers to their questions.

If the FAS does not include APW Electronics, what is the prospect of redress through any other route? That is the key question.

May I continue? On Report of the Bill in the House of Lords, Baroness Hollis emphasised:

"The Government's starting point is the principle that solvent employers should be responsible for the occupational pension schemes they provide."—[Hansard, House of Lords, 15 November 2004; Vol. 666, c. 1243.]

She went on to say that the blanket term "solvent employer" covered an enormous variety of different circumstances.

Part of the purpose of the consultation and research that we have undertaken to inform the development of the financial assistance scheme was further to understand the different circumstances. We considered whether sensible and workable distinctions could be drawn while protecting the principle that the taxpayer cannot be expected to stand behind employers' pension promises. The criteria for employer insolvency that have been outlined in today's statement are sensible, workable and prudent. By moving beyond the definition used for the Pension Protection Fund, including members' voluntary liquidations, and by allowing schemes to qualify if employer insolvency occurs after the start of winding up, assistance may be provided in circumstances where employers no longer exist. That general definition helps to ensure that members of schemes connected to such employers will not be ruled out of the financial assistance scheme on a technicality.

I realise that my hon. Friend wants to make progress, but he seems to be saying that APW would be considered for the scheme if it were to go bankrupt now, but would not if it did not. However, from the point of view of the scheme members, APW has no intention of putting any more money into the fund. His objective is to stop companies walking away, but the company has walked away. The question is whether the Government can offer support to the members of the scheme.

Let me make some more progress. The case has been made forcibly today that, through no fault of their own, members of the APW Electronics scheme face losses. However, assistance in such cases would go beyond our intention of ensuring that people are not ruled out on a technicality. Such assistance would provide help where there is an ongoing solvent employer, and that would not be appropriate. It would go against the fundamental principle that assistance from the scheme should be given only in cases of insolvency. Abiding by that principle means that difficult decisions will have to be made, and wherever such lines are drawn, people who fall outside the scope of the scheme are bound to feel aggrieved.

Returning to today's statement, I wish to stress that the list is of potentially eligible schemes. It is an indicative list that is based on the information that is currently available to us, which in turn would have been based on the position when the information was submitted. If new information comes to light, or if, for example, the solvency status of a sponsoring employer changes, we would want to reconsider the situation. That applies to APW as well as other schemes.

Let me be perfectly clear. I am not saying that APW is in or out of the FAS. In reply to my hon. Friend the Member for Hayes and Harlington, the door is not closed. However, it is only right that hon. Members and those whom they represent should understand the basis on which those who have the relevant authority will take decisions in due course. Of course, any Member of Parliament may believe that their scheme is a specific case. I have discussed various schemes with many Members, and nearly always their scheme is a "specific case". I am not being cynical about the situation—I do understand it.

In the data collection exercise for the FAS, some 200 returns were received for schemes that do not appear to be eligible. Furthermore, a significant proportion of them are likely to be cases in which compromises were reached with solvent employers. Those are special cases in some respects, but they certainly are not unique. The real danger is that the state will be seen to be underwriting companies that are having difficulties with their pension schemes. They would like the taxpayer to write a cheque to bail them out, but that is a slippery slope towards the nationalisation of risk, which we must resist.

Let me say something about deemed buyback. If APW's circumstances do not change, it does not necessarily mean that the employees would be left completely high and dry. As we heard, APW employees may qualify for deemed buyback, which is an existing provision that gives certain scheme members the option of having some or all of their state scheme rights restored.

Deemed buyback is one of the more technical areas of pensions legislation and I have no intention of going into all of its complexities today, nor do I have the time to do so. Basically, scheme members who were opted out of the state earnings-related additional pensions are given back those rights in exchange for the limited funds that they have left in the scheme, which is their share of remaining scheme assets. For example, a member could agree that £10,000 of pension scheme rights be paid into the national insurance fund and they could, in return, be reinstated into an additional pension worth, say, £80,000. They will therefore derive some recompense from the state scheme that would mitigate their loss.

Deemed buyback is one of a number of options available to a member for securing their accrued rights. Another approach is that a member could transfer their rights to another scheme. Another option is that the loss in the APW scheme is not sufficient to trigger the deemed buyback process. That would mean that the remaining assets would provide a greater return than could be had from the state scheme. The final decision on which option to use is taken by the member, not by the scheme. I cannot say what would be the best option for APW scheme members. That decision must be based on knowledge of the individual circumstances of each member. However, there is the potential to offer significant help to employees at APW. I will facilitate the process as best I can.

I realise that hon. Members were hoping for a clear outcome. I hope, however, that the possibility of deemed buyback and an assurance that the position of APW will be reconsidered if its solvency status changes will provide some comfort.