£2.9bn pensions 'rescue package'

Last Modified: 17 Dec 2007
Source: PA News

A £2.9 billion rescue package to restore the pensions of up to 140,000 workers has been announced by the Government.

The scheme, the biggest of its kind, will restore 90% of the value of pensions to workers whose employers went bust.

The announcement was warmly welcomed by trades unions, which have been campaigning for five and a half years to persuade the Government to step in and restore the lost savings.

Work and Pensions Secretary Peter Hain said the money, which will mainly come from taxpayers, will deliver justice to workers "cruelly robbed" of their pensions.

Union leaders announced that they will not go ahead with legal action against the Government as a result of Monday's move.

A number of workers who used to be employed by steel company ASW in Cardiff and Sheerness in Kent, who started the campaign after their firm went out of business, travelled to London to meet Mr Hain before the announcement was made public.

One of them said: "This is a great early Christmas present."

Mr Hain said up to 140,000 people will be eligible for extended help under the Financial Assistance Scheme (FAS), which was set up by the Government to tackle the pensions crisis involving workers but was criticised by unions for not going far enough.

The unions Community and Unite launched legal action, taking the Government to the European Court of Justice after complaining that ministers published misleading information about the security of company pension schemes and were not doing enough to compensate workers.

Michael Leahy, general secretary of Community, said that unions had now achieved what they have been campaigning for and so will not pursue legal action.

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