GOVERNMENT minister Andrew Smith has promised to meet Sheppey steelworkers who lost their pensions when their company went into liquidation last July.

Mr Smith, the Work and Pensions Secretary, agreed to talk to members of the Pensions Fund Action Group who were employed at Allied Steel & Wire's Sheerness and Cardiff plants when the company went bust.

The group has staged three protest marches in London and presented two petitions to the Government calling for compensation for ASW final salary scheme members and greater protection for pension scheme members.

Sittingbourne and Sheppey MP Derek Wyatt secured the promise when he and Frank Field, the MP for Birkenhead, met the minister this morning.

Mr Wyatt said afterwards: "This is encouraging. He is aware of the the issues and he is open to ways of solving it, but he can't make any early commitments."

On Wednesday the minister announced that the Government was setting up a compulsory insurance scheme. The scheme, funded through a fixed-rate levy on all firms, would ensure workers do not lose their final salary pension if their employer becomes insolvent.

But the fund, which will not start until at least April 2005, will not help any workers who have already lost their pensions because of their employers going bust.

After this morning's meeting, Mr Wyatt said the minister had promised to look at an insurance scheme introduced in the United States during the 1970s which compensated those who had already lost their pensions when the scheme began.

Under current rules, when a pension scheme is wound up and assets are distributed, people who have already retired get priority, meaning that workers approaching retirement can lose most of the money they have saved.

Keith Plowman, chairman of the Pensions Fund Action Group for former ASW staff, said: “Things are looking a little bit better, but we do not expect this to be resolved overnight.”

They also discussed Mr Field's Pensions (Winding-Up) Bill which will be considered by the House of Commons on June 20.

The Bill aims to give pension scheme members greater protection and compensate those who have lost money. Mr Smith agreed to look at the Bill.

Mr Wyatt, who said 41 companies had gone into liquidation in the last 18 months puting staff in final salary schemes into the same position as ASW workers, praised the ASW pensions action group for their high-profile campaign.

He added: "We have got a lot of work to do, but this is a start."

Mr Wyatt also raised the plight of staff at the Sheerness-based HBC Engineering Solutions, formerly owned by the German-owned group Weidmuller Klippon.

Mr Smith promised to investigate after Mr Wyatt told him that only the English part of Weidmuller had been sold. Staff still working there had their pension with the German company and were finding it difficult to get information about their pensions.