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Labour is attacked over pension delay

Rachel Stevenson
Thursday 23 October 2003 00:00 BST
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The Conservatives and Liberal Democrats yesterday hit out at the Government for stalling on crucial legislation that would protect the pensions of thousands of workers if their company went bust.

The Government yesterday announced a six-week consultation period on changing the priority of how assets are carved up when a pension scheme winds up, but politicians are angry that it has taken so long to come about.

Currently, when a company becomes insolvent and a scheme closes, only workers who have retired are entitled to their full pension benefits. Staff can have contributed to a scheme for 30 years but discover they will get only a third of what they had hoped when they retire. This has been revealed in the plight of steel workers in the now defunct ASW and UEF engineering companies, whose employees have seen their pension promises slashed and have marched on Downing Street to have their pension rights restored. Changing the priority order to ensure a fairer division of assets was flagged in the Government's Green Paper on pension reform in December. The proposal received all-party support then, but it has taken 11 months to initiate consultation.

"The plans are well overdue and are too little too late. We have been urging the Government to take its hands out of its pockets and tackle this issue for more than a year now," Oliver Heald, the shadow pensions minister said.

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