Europe demands answers over pensions

By Paul Lewis
BBC Radio 4's Money Box

ASW workers demonstrate in London over their pensions crisis

The European Commission is demanding to know why thousands of UK workers lost their pension rights after their employers went bust.

Those rights should be protected by a 23 year-old European law. It is clause eight of the 1980 Insolvency Directive.

The Commission is concerned the UK government has not implemented the clause effectively, leaving thousands of workers without the pensions they have paid for. And it has written to the government demanding an explanation.

It has written to the UK's permanent representative in Brussels and it wants a response by next month Adam Price MP

The letter was revealed on the BBC's Money Box programme by Adam Price, the Plaid Cymru MP for Carmarthen East and Dinefwr, who has just returned from Brussels.

"I met with the head official responsible for the Insolvency Directive, and he informed us the Commission had begun its own investigation.

"It is aware of the pensions crisis. It is aware of the question as to whether the UK Government has properly implemented the provisions under article eight of this directive.

"It has written to the UK's permanent representative in Brussels and it wants a response by next month."

Investigations

Adam Price also revealed that two committees of the European Parliament are investigating the problem.

The Petitions Committee is considering a petition by some workers from Allied Steel and Wire (ASW) who lost most of their pensions when the company went bust in July 2002.

Mr Price told the programme:

The net is closing on the UK Government Adam Price MP

"It will be conducting its own investigation into the pensions crisis, and it has the right to ask the Commission to report, and that report will be in the public domain.

"We also met the chair of the Employment Committee and it is very interested in the pensions crisis in the UK. It will be conducting a much wider report looking at the policy issues.

"The net is closing on the UK Government. We have got two parliamentary committees and the European Commission.

"It can avoid all of this if it comes to a speedy settlement. It should have implemented this directive 20 years ago. It is high time it compensated the workers who have lost out."

Sixty-year-old Rosemary Welthy worked for Bradstock Group. She saw her pension almost disappear after the company went bust last year and wound up its pension scheme.

She told the programme:

"Twenty three years of paying my contributions have gone down the drain. I just cried all night. I do not know how I am going to manage. I do not have time to save."

And 49 year-old David Skinner, will probably get a pension of £3000 rather than the £18,000 he was expecting. He told the programme it was very unfair:

"We were forced into these schemes. We had to join. Words cannot describe it. You have planned for a secure future, and this has been allowed to happen by successive governments.

"We have been stuffed from top to bottom. We have done everything right and this is what we get for it."

BBC Radio 4's Money Box was broadcast on Saturday, 8 November, 2003, at 1204 BST.