The Financial Assistance Scheme (FAS) is a shameful example of political spin. It is based on false figures and has offered the tens of thousands of people who have lost their final-salary pensions little more than false promises and false hope.
The FAS was established in May 2004, under threat of a backbench revolt by Labour MPs. Gordon Brown has since claimed credit for the scheme, telling the TUC conference last year: “It is morally wrong that when firms go under, workers, through no fault of their own, lose their pensions.” So, he said, “for workers cruelly denied the pensions they were due, we have now set aside £400 million”.
The truth is the Chancellor had not “set aside” £400 million then – and he hasn’t still. Brown has repeatedly insisted that the FAS is financed from existing budgets, and he refuses to even consider allocating any new money until the 2007-2008 spending review.
Yet, more than 100,000 people have lost their pensions promises, despite being repeatedly told by this Government that such pensions were “guaranteed”. Both the Parliamentary Ombudsman and the Public Administration Select Committee have found ministers responsible for what happened, but the Treasury has rejected both these independent judgments.
No Chancellor has treated pensioners so cruelly