The government has again rejected demands that it should compensate some victims of collapsed occupational pension schemes.
It has dismissed a call from the Public Administration Select Committee that it should pay out, as requested by the Parliamentary Ombudsman.
In March, the Ombudsman said the government was partly to blame for 85,000 people losing part or all of their pensions between 1997 and 2005. It said the government had been guilty on three counts of maladministration.
But pensions reform minister James Purnell said: “We have real sympathy for those who have lost their occupational pensions, and this is why we have put the Financial Assistance Scheme in place. However, we do not believe the taxpayer should be expected to underwrite what were private company pension schemes.”
The government said it has allocated an additional £2bn of funds for the Financial Assistance Scheme over the next 60 years. This is designed to help some of those who lost money in the period before the establishment of the Pension Protection Fund.
A judicial review may still look into the government’s decision not to go along with the Ombudsman’s demands.