Hampshire MEP Presses Commission: Was UK Supervision Good Enough? (Eastleigh Liberal Democrats)

Eastleigh Liberal Democrats <enquiries@eastleighlibdems.org.uk>

Hampshire MEP Presses Commission: Was UK Supervision Good Enough?

November 24, 2004 2:00 PM

Hampshire MEP Chris Huhne said today that he would press the EU Commission to say whether the British government's supervision of pension schemes such as the crisis-hit APW scheme met with EU guidelines.

"This is an appalling case where the pensions of hundreds of local people have been decimated. Sadly, it is one of many cases across Hampshire and more widely where companies are walking away from final salary pension schemes" said Mr Huhne who is also Liberal Democrat prospective parliamentary candidate for Eastleigh.

"I want to know from the Commission whether it believes that the Government was applying EU rules supervising these institutions adequately. This is a real question as we already know that there were serious lapses in British regulation of insurance concerns like the Lloyds market" said Mr Huhne who has been involved in a tougher new EU law on occupational pensions due to enter into force in September 2005.

Mr Huhne put down formal written parliamentary questions to the Commission today, and hopes to meet trade union representatives from Amicus and the management to explore options.

"The closure of the APW scheme is particularly unfair to those who are near retirement, have made many years of contributions and now find that they are worth just a fraction of what they expected" said Mr Huhne. "It is appalling that a quarter of UK companies with final salary schemes closed their pension funds to new members last year alone.

"We have gone from having one of the finest systems of pension provision in Europe to having one of the worst in just seven years" said Mr Huhne.

Mr Huhne, who is a member of the Liberal Democrats' Treasury team, blamed three key factors: First, the last Tory government allowed companies to take so-called 'pension holidays' in which they failed to make company contributions to pension schemes in good years due to the booming stock market.

Secondly, Labour Chancellor Gordon Brown raided pension funds with a stealth tax which took away their tax credits on dividends. This drained more than £5 billion a year from pension funds compared with the old system. Thirdly, the weakness of the stock market meant that investment returns had been hit hard, and had even gone into reverse.

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