Ministers win fight over pensions

Ministers saw off an amendment to the Pension Bill, also backed by Tories and Lib Dems, by 22 votes.

Ministers said the government should not write a "blank cheque", but Tories argued more help was needed with "heart-breaking" pension cases.

Fifteen Labour MPs, including five ex-ministers, backed the amendment.

'Remedy'

Among them were party leadership candidates Michael Meacher and John McDonnell.

During the debate, pensions minister James Purnell said: "The government should not write a blank cheque but organise a remedy."

Ministers have previously pledged an expansion of the current Financial Assistance Scheme to help about 125,000 victims.

Last month, Chancellor Gordon Brown announced its funding would be increased from £2bn to £8bn and it would cover everyone who lost all or part of their pensions between January 1997 and April 2005.

It will offer a financial "safety net" to members of about 660 company pension schemes that were closed while insolvent before 2005, when new protection came in.

But there has been criticism that the Financial Assistance Scheme is operating too slowly and that thousands of people who have applied for payments may have to wait years.

In the Commons, Mr Purnell announced a concession to critics on the Labour backbenches which, he said, should help a further 8,000 people whose schemes began winding up between January 1 1997 and April 5 2005.

This would happen "where a compromise agreement is in place and where enforcing the debt against the employer would have forced the employer into insolvency".

He added: "We estimate this will benefit an extra 8,000 people, members of some 15 schemes".

'Pain'

Shadow work and pensions secretary Philip Hammond said: "If we are going to have a solution to these problems we have got to recognise that we are all in this together.

"There has to be a sharing of their pain."

Liberal Democrat work and pensions spokesman David Laws said: "Those who have lost their pensions will not forgive MPs who do not back a fair compensation package."

But the Association of British Insurers warned that the proposed "lifeboat fund" would amount to "another hit on pension funds".

At prime minister's questions earlier, Tony Blair said there would not be an "unfunded commitment " of more help.

He added that the "cruellest thing" would be to tell people "we can make that commitment and bail them out when it transpires we cannot".

The Pension Bill calls for the state pension age to rise to 68 by 2046.

It also puts forward restoring the link between earnings and the basic state pension by 2012. Critics have said this is "too little, too late".

The bill was given an unopposed third reading and now goes to the Lords

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