ASW workers marched on Downing Street in protest

Derek Wyatt, Labour MP for Sittingbourne and Sheppey, hosted a special Commons summit on Tuesday looking at a loophole in legislation governing pensions.

The meeting followed a protest on Monday by workers from the Allied Steel and Wire (ASW) steel company in Cardiff and Sheerness, Kent, who served a writ on the government.

About 800 workers, some of whom had been paying into ASW's fund for more than 30 years, lost a large part of their pensions when the firm folded in July 2002.

Given guarantees

Mr Wyatt told BBC Radio Kent there were about 100 companies whose workers were in the same situation as the ASW staff.

He said the legal loophole meant pensions were not protected if the company responsible went into liquidation between 1997 and 2005.

"If we go back to ASW in Sheerness and Cardiff, remember it was a condition of their employment that they took out the pension," he said.

"They were also told their pension was safe, that it would rise with the stockmarkets and so on - they were give those guarantees in their contracts.

"A fat lot of good those guarantees were."

Mr Wyatt said he wanted a compensation fund set up to provide financial cover for employees' pension schemes in case their company collapses.

Unions representing the ASW workers are to take the government to the European Court of Justice, claiming it failed properly to implement an EU Directive which would have offered them protection.