Darling’s Pension Scandal

As we bid farewell to Alistair Darling it is worth revisiting one of the more unedifying roles he played in British life.

Little mentioned now by the media is the pensions scandal which left thousands of workers without the pension they expected and to which they had contributed throughout their working life – simply because their employer had gone out of business.

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As Work and Pensions Secretary and later as Chancellor Darling played a key role in how this was handled. He is accused of encouraging workers to put their money into company schemes without ensuring they were guaranteed in the event of corporate collapse and of refusing to compensate them adequately.

Before 1997 and the arrival of a Labour government, in the event of a company being declared bankrupt, those who did not receive their entitlement from the occupational fund were taken back into the state pension. But after the Pensions Act came into effect in 1997 other guarantees were put in place and the Government promised that if a company failed, it would still pay workers their pensions.

This encouraged people to trust company schemes which appeared to be rock solid and thousands put their money and faith in their occupational scheme. For example, having paid the married woman’s stamp and opted for a state second pension a woman could add her own savings to the scheme leaving all her pension eggs in the company basket. Official promises seemed cast-iron so that when a company went bust – before 2004 – there should have been no cause for concern.

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However, that was not the true situation because in the event of company failure, a statutory priority order on the company assets would come into place. That meant that anybody who had already retired was entitled to their full pension, but those who had not reached retirement age when the company went under got nothing.

 

Over 120,000 workers were affected – their contributions and hopes for retirement wiped out. The Government set up the Financial Assistance Scheme to help some of the 125,000 affected but when they attempted to use taxpayers money to compensate the pensioners, Darling, then as Chancellor and Gordon Brown as Prime Minister, reneged. They overruled their Cabinet and broke the promise to help restore their pensions.

The Pensions Action Group which fights for pensioner justice described it as betrayal. It was also contrasted with the swift action taken by Darling and Brown to bail out savers in Northern Rock who had, as savers and investors, taken a calculated risk without being encouraged by government ministers to do so as pensioners had.

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Dr Ros Altmann, a governor of the London School of Economics and former adviser to the Treasury, who is spokesman for the pensions action group, said: “It does not matter if you are two weeks off retirement or two years into your employment, all employees who have not retired at the time when the company goes bust are classed as the same. If there is not enough money from the scheme assets, this group of people gets nothing. The financial ombudsman found out the guarantees the Government made were only for 50 per cent, and this percentage has been reduced twice since 1997 without the knowledge of the public. The Government knew and it kept on giving the public false assurances.”

Altmann explained Brown and Darling’s cynical spinning of what was “without doubt, the worst pensions scandal ever seen in the UK”. They promised to pay 80% of the pensions back to the 125,000 people affected, costing £8bn.  What has actually happened since then is that the government have invented something called a core pension that doesn’t account for inflation, tax-free lump sums, many widow’s benefits and other dependent benefits, ill health and early retirement benefits, or pension starting ages. The Government then works out 80% of what’s left and takes 22% tax off it. the Financial Assistance Scheme – which had been entirely ‘designed to fool the public’ – has only paid out £4m since 2004, partially helping just 2000 people.”

Some of the dispossessed have since committed suicide, having had no idea that there was any risk to their pension. Alistair Darling, however, was told about the risks in 1999 but the government continued to encourage people to join the pensions funds. Perhaps, both as culpable politician and well-remunerated public pensioner, he may think an apology is in order?

This and other aspects of Darling’s career have hardly appeared since he took on the role of Better Together chairman and seem to have been dismissed as irrelevant to the current status of what colleagues have called a thoroughly decent and principled man. There are 125,000 British workers with a different view.

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28 thoughts on “Darling’s Pension Scandal

  1. Thank you Derek for the illumination of this disgusting fraud. I still cannot believe that people who claim they do not believe a word which comes from the mouths of Politicians were fooled by … Politicians and voted NO to independence. More worrying were the actual pensioners who given the level of Pensions paid in Britain were willing to remain with the status quo. I as a pensioner was more than willing to get out from under the National Pension Scheme and see an independent Scotland bring in a fairer system.
    Funnily enough remembering the Robert Maxwell robbery of the Daily Mirror Pension scheme and when the Politicians found there was a problem with pensions, they rushed into the house to protect their.

  2. Sirry need an edit function, should read “protect their own.”

  3. I know of one gent this happened to. A man played by the rules all his life. The one saving grace after losing his pension was ( both in their mid 50s ) his wife had a pension with the NHS .Sadly , she unexpectedly collapsed and died.He lost his wife, his 30 yrs plus job because the company collapsed, his pension, too young for his state pension, too old to get a job of a similar income locally, too young for any claim on his wife’s pension.
    Yep Alistair is an honourable man . Is it everyday the Labour Party rewrite their history or just days beginning with T ?

  4. Well let us hope that Labour has committed suicide now. It’s so hard to understand why people voted no when the examples of incompetence and greed are endless.

  5. I have never heard anyone call Alastair Darling a decent and principled man.

    Even as the (ostensibly) fiery young radical speaking at CND demos in the 1980s, he was known as a thorough-going careerist, among those familiar with his career as a Lothian councillor.

    Before he had even gained office in 1997, he had left all that behind him when he saw the dawn of New Labour.

    It does, however, show the unprincipled nature of mainstream journalism in the UK that Brown and Darling were allowed to threaten Scots’ pensions during the independence campaign without being questioned on this.

    Satire certainly died in the UK in 2014.

  6. #asleepatthewheel #microvmacro Agree-it was also interesting during the Referendum campaign how many Scots felt he was highly principled little realising he’d flipped his home four times in four years, whilst also claiming the maximum food allowance, yet residing at Downing Street. As he was so busy looking after the housekeeping bills in retrospect it’s perhaps nae wonder he was unaware what was happening in the wider world regarding the banking crisis. More recently he’s been raking in over 100k a year giving speeches-as recently as last month another one at 12.3k which seems to be the going rate.

  7. In an Independent Scotland, he will surely find himself in the dock.
    That is, if England have an extradition treaty with Scotland.
    Which I very much doubt will ever be the case.

  8. The BBC’s Glenn Campbell felt able to say about Darling “the one word used most often used about him is integrity”. Why does any BBC journalist peddle such myth?

    http://www.youtube.com/watch?v=h0DlRIE4gQo

  9. I am ashamed that he is Scottish. Keep up the good work Derek

  10. Steve Asaneilean

    I don’t know enough about this so have to take you on trust Derek. But if what you are saying is true then it is utterly shameful and Darling should never be allowed to forget it. What a sad reflection it is that he can walk away into the lifestyle of a virtual millionaire without so much as an apology for what he did as GB’s bagman then as Chancellor.

  11. He’ll move abroad, as he knows he can’t walk the streets of Scotland.

  12. @AnneDon BBC Radio Scotland 17:15, platform for labour depute election and then discussion of Alistair Darling, described as a ‘principled man’. bBC are in full Labour campaign mode

  13. On STV news last evening, he was called a man of integrity. I saw no integrity in his threats, lies and false promises before the referendum Now I’ve learned about this. This man should be prosecuted and sent to for the rest of his life. Loch St. Kilda for the rest of his life. That’s too good for him. He’d probably pretend he was a tour guide and fleece the tourists.

    • Please excuse the careless proof reading. “This man should be prosecuted and sent to for the rest of his life. Loch St. Kilda for the rest of his life.” should read: This man should be prosecuted and sent to St. Kilda for the rest of his life.

  14. Arise Sir Alistair Darling Lord of Lickspittle and Baron of Cringeworthy. Welcome to your new seat in the House of Lords. You look very dapper dressed in ermine. Now it’s time to go on endless money – spinning tours telling everyone how you saved the UK in the banking crisis (which you kinda oversaw). A best selling book (ha ha) with your pals in the media paying you a handsome amount to serialise.

    Yes, and then the docu-drama of how your gargantuan efforts in the Bitter together save the UK again for a second time.

    One of the greatest living Scotsman. Along with oor ane big hitter Gordy Broon!

    Eh see it all now.

  15. Dr JM Mackintosh

    I had the misfortune to hear BBC Radio Scotland repeatedly describe Darling by one word – Integrity.

    Sums up the Slab and BBC cabal perfectly.

    Also reminded me to retune the radio. Getting on fine without BBC TV – Radio next to go!

    • You might have seen Lena the Hyena’s article about the close links between Slab and the BBC a few weeks ago. Nepotistic? Incestuous would be nearer the mark, and just think how much worse it must be in London, with the BBC, Labour and their mutual friends at the Guardian in an unholy alliance (or should that be an incestuous ménage a trois?)

  16. Pretty much anything Brown and Darling were involved in ended in either economic carnage or with more than a whiff of impropriety. We’ve yet to see the back end of either LIBOR or personal expenses scandals, both gentlemen implicated, and somehow I doubt we ever will see the full truth exposed. On their record of economic management however the record is quite clear. Singularly or jointly they resided over the worst record of any British government. The effects of their mishandling of the economy will be felt for generations to come and by that I mean carried as a burden by generations to come.

    Neither of these individuals has either principle or integrity, not at any part of their careers and most certainly not now. I’ve yet to hear either one of those pricks apologise to the UK electorate as individuals or on behalf of their party for the hardship they had more than a little responsibility for inflicting. As for their conduct during the referendum campaign, this was perhaps their most appalling crime. Terrifying pensioners, involving the NHS in their lies, smearing the YES camp and the SNP in particular with the vile lie of ‘blood and soil nationalism’ (inaudible mumble). They set about either demonising or terrifying their electorate without a second thought for the consequences.

    As the facts become known to the electorate over the coming months and the hardships increase, they and their party deserve nothing less than to be held fully responsible for their actions at the ballot.

    • how will the facts become known to the electorate ??

      • Same way we’ve been doing it for the past two years. You tell someone, that person tells another, who then tells another, who then tells another…

        It took us from twenty four percent support to forty five percent support in two years. Slow, but effective. Its going to be chip, chip or drip, drip, but it will get there.

  17. Derick fae Yell

    I didn’t know about this. Sadly, unsurprised. Thanks for the info

    What ARE we going to do to counteract BBC Pravda on the Clyde?

    • Not a thing. Simply deprive them of oxygen. Make them an irrelevance by never viewing any BBC channel, spread the word and make their name synonymous with mis-management, a byword for government dishonesty and willing channeller of state narratives. Cripple their viewing and listening figures and they’ll get the message. They are already feeling the effects of this boycott in Scotland as over the last quarter leading up to the referendum their radio listening figures alone slumped something like 8%.

      http://wingsoverscotland.com/an-incredible-achievement/

      We’ve got a new media to encourage and build.

      • Since the original Devolution Agreement, there has been a most welcome perceptible rise in the energy and intensity of Scottish cultural life – indeed, much of the early and sustained momentum for Scottish Independence has been driven from that source, prominently so in the approach to the Referendum. In marked contrast to the cynical scaremongering of the Naw campaign, much of it making use of spurious, if not altogether demonstrably untrue claims, careful research on the part of so many Yes campaigners has built upon our new cultural awareness and sense of identity by establishing the facts about the case for Independence for Scotland and our inalienable right to it, as Scots. I regard this as the New Scottish Enlightenment. Of course, such understanding of the truth must include the awareness of what’s been so wrong within the establishment and many of the UK’s institutions, and your shocking exposure of just one of the “impeccable” Mr Darling’s frailties brings to light a signal example of the incompetence and profound misbehaviour (polite terms) of some of those whose job it was to serve us and to protect our interests and our rights. Ahead of the next Referendum, we need, in the Revelations section of the new Scottish Enlightenment, “A Little List” …..

  18. To Bill darling is not Scottish he is English born in London so no need to feel ashamed

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