House of Commons Hansard Debates for 12 Dec 1991

Mr. Patten : I am trying to reply, but I have only five minutes in which to do so.

I agree with the right hon. and learned Member for Warley, West that we need more officers on the beat. That is why, when my right hon. Friend the Home Secretary recently announced 1,000 additional officers, he specified that 80 out of every 100 should go straight on to the beat. However, I shall certainly draw to the attention of my right hon. and noble Friend the Earl Ferrers the right hon. and learned Gentleman's views on police manpower in the west midlands. The hon. Member for Cardiff, South and Penarth (Mr. Michael) drew attention to the lack, as he saw it, of adequate policing in south Wales, and I shall also draw the points that he made to the attention of my noble Friend. He and I also share an interest in obtaining better secure accommodation for youngsters, particularly for those who are awaiting trial, to which the Government have given considerable priority.

I am concerned when I hear reports from the police on a number of things that trouble them. I was concerned about reports of attacks on the police, which is why the Government commissioned research into that problem. I am also concerned that some police forces are reporting apparent large-scale reoffending by those on bail--bail banditry, as it has been called by at least one policeman. The Home Office is conducting in-depth and rapid research into those suggestions, and I hope that we shall be in a position in the not-too-distant future to tell the House what we intend to do about the problem of reoffending on bail.

The speech of the hon. Member for Huddersfield (Mr. Sheerman) reminded me of the late and unlamented Senator Hughie Long at his worst. I have never heard such a rant. His attack on my hon. Friend the Member for

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Westminster, North was disgraceful. People not just in this House but worldwide now listen to what my hon. Friend has to say on law and order issues. I wish that my hon. Friend was remotely biddable in the way in which the hon. Gentleman suggested. I still bear the scars of his report on the criminal injuries compensation scheme. It took me a long time to recover from the mauling that he gave me on that. I registered my protests with the Whips, but that has done no good whatever, and my hon. Friend goes from strength to strength. The hon. Member for Huddersfield provided more equivocal support for the law and order measures which we have debated in the House in recent weeks. We have introduced the Prison Security Bill. That received a welcome from the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) which was equivocal in the extreme, and the Labour party does not support it. Earlier this week, we debated the Aggravated Vehicle-Taking Bill, to deal with those youngsters who take vehicles, causing mayhem, injury and damage with them. As always, the Labour party tried to have its cake and eat it by not voting against the Bill on Second Reading but tabling a series of wrecking amendments to destroy the Bill.

Mr. Sheerman : That was for exactly the same reason that I would criticise the right hon. Gentleman's speech tonight. It contained not one word about the fundamental problems that cause crime, but was all peripheral nonsense.

Mr. Patten : Let me end on a cheerful note. The hon. Gentleman must get himself a better brief. His speech was erected on the idea that juvenile offending had increased. Since 1985, the number of known juvenile offenders--that is, those cautioned and found guilty--has declined steadily year by year. If it is to be worth while to deal with the hon. Gentleman's arguments, they must be erected on a sound factual basis. His speech was based on the premise that juvenile offending is increasing, on which the hon. Gentleman is entirely wrong, as he was throughout his speech.

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Pension Funds

8.45 pm

Mr. Kenneth Hind (Lancashire, West) : I am grateful to have the opportunity to discuss this subject tonight. This debate could be regarded as a continuation of the previous debate on crime. I have two major concerns. The first is the long-term need to protect pension fund contributors, and the second, which has worked as a catalyst, is the appropriation from the Daily Mirror and Maxwell Communication Corporation pension fund, of between £300 and £500 million by the major shareholder, the recently deceased Mr. Robert Maxwell. That in itself points to the need for closer consideration of the matter and probably for reform.

Earlier today, in support of this debate, I introduced a Bill to provide a framework of protection for contributors to and beneficiaries of pension funds. In future, large occupational pension funds will be a major source of British wealth. It is not without significance that we have obliged the public to contribute to pension funds to provide for their old age. We must also provide a framework which will protect them and ensure that those funds are available to benefit them when the time comes.

As the population ages, pension funds will become more significant as support for large numbers of workers in their old age and will play an important part in investment in the economy. We need only look around the City and at company reports to see the importance of pension funds as a form of investment in our major companies and in the economy.

First, I want to address the problems of Mirror Group Newspapers and the Maxwell Communication Corporation. This debacle--that is the only word to describe it--must under no circumstances be allowed to happen again. That, as much as anything, is what this debate is about.

Mr. Roger King (Birmingham, Northfield) : I hope that my hon. Friend will not take it amiss if, as somone with an open mind on the matter, I ask him whether he has had any dealings with the Maxwell empire in any shape or form and is now seeking to cleanse his spirit and soul this evening. I make that point because it is abundantly clear from statements made by many people who seem to have spent years toadying the the great man that they are now seeking to cleanse their souls and spirits by saying that they never had anything to do with him. I am sure that my hon. Friend is not such a person, but he probably has had parties in Blackpool and may well have enjoyed the odd tincture with the great man so that he now feels that he is almost obligated to his conscience to present a case this evening which is probably not true to his natural form. I await his reassurance on that.

Mr. Hind : I have no need to cleanse my soul. Perhaps those who need to do so will recollect the words of Mark Antony at Julius Caesar's funeral :

"So are they all, all honourable men."

Mr. Robert Maxwell, a former Labour Member of Parliament, was the subject of an inquiry in respect of his company, Pergamon Press. The inspector's report said of him :

"This man should never be allowed to control a public company."

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How right that inspector was. How foolish we were not to take due note of that incisive comment, by a man who read Mr. Maxwell's character extremely well.

In the past, Labour Members criticised supporters of this Government and right hon. and hon. Members for financial mismanagement, but that is not the exclusive preserve of Members of every party other than Labour. No one can point a finger at anyone in this debate in that regard. The guilty have an equal share in that respect.

Robert Maxwell helped himself to the Mirror pension fund. While professional journalists--rightly, in my view investigated the financial misdeeds of others, Maxwell had his hand in their pocket and robbed them blind. That was not all. A more serious aspect is that, after Robert Maxwell's death, we are led to believe by the newspapers that a further £300 million went missing from the group's various pension funds, which suggests that such activities went deeper than just one man, and that others were involved. They too must be called to account, and we know that those matters are now being investigated by the Serious Fraud Office.

The existing law has failed us in respect of the proper control and management of pension funds. The law is clearly defined. It is based on the law of trust--and most pension funds are trusts. There was a major judgment on that subject in 1883. In the case of Speight, the judges held :

"Trustees also have a duty to act diligently and prudently ... in selecting an investment the trustee must take as much care as a prudent man would take in making an investment for the benefit of persons for whom he felt morally obliged to provide."

They were saying, in the language of the Victorian era, that a trustee should be as prudent in his selection of investments as he would be in dealing with his own.

More recently, in the case of Cowan v . Scargill in 1984, the same sentiment was repeated in modern-day language :

"Trustees are required to exercise their powers in the best interest of present and future beneficiaries ; trustees must put on one side their own personal, social, or political views". Those are clear guidelines to the way in which pension funds should operate. The Maxwell affair has clearly shown that a coach and horses was driven through that law, so we must consider carefully the need to change it.

Mr. David Martin (Portsmouth, South) : My hon. Friend makes a significant point about the duties of trustees. Will he deal also with the trustees themselves, and say whether there should be better legal rights-- to provide for a more significant number of ex-employees to serve as trustees, so that the interests of all members of a pension fund can be better protected?

Mr. Hind : My hon. Friend leads me to my next point. My Bill would not allow a director or shareholder to serve as a member of the pension fund trust of the employer company. Control of the pension fund should be at arm's length, by independent persons who are not involved in the management of the employer company.

Robert Maxwell proved the undesirability of having directors or chairmen who are in control of both the company, as majority shareholders, and the pension fund. He was a fund trustee, along with his two sons, so effectively he controlled both the company and the fund. That led to the problems that the fund faces today. If one individual holds a dominant commercial position in respect of a pension fund, he or she will be able to direct those who operate the fund, in the same way that he or she manages the company--and will be able to select those

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persons who are to serve as trustees and manage the fund. That clearly happened in respect of the MGM and MCC pension funds.

Mr. Charles Wardle (Bexhill and Battle) : My hon. Friend's views will be shared by many pensioners. Does he agree that pension fund assets would be easier to identify if they were held in the fund's own name rather than in the names of nominee companies? Although nominee companies are perfectly legal, do they not present a determined manipulator such as Robert Maxwell with opportunities to cover his tracks as he goes along?

Mr. Hind : My hon. Friend makes a good point. My Bill advocates that there should be no nominee companies, and that a pension fund should be a recognised legal entity. The people who control a fund should be clearly defined, as should the rights of contributors. I will return to that aspect later.

If one person dominates the fund, directors are appointed by this majority shareholder, as well as the trustees. On 31 January, Lord Williams of Elvel, Labour's deputy leader in another place, and a director of Mirror Group Newspapers, addressed their Lordships on that very point--on corporate governance. He raised questions on comments made by my noble Friend the Under-Secretary of State for Industry and Technology, saying

Madam Deputy Speaker (Miss Betty Boothroyd) : Order. The hon. Gentleman is, I think, aware that hon. Members are not allowed to quote directly what has been said by a Member of the Upper House unless that Member is a Minister. I should be obliged if the hon. Gentleman would paraphrase.

Mr. Hind : Lord Williams of Elvel was talking about chief executives, and about non-executive directors confirming what he described as the outrageous ambitions of a chairman or chief executive. Now, the outrageous ambitions of another chief executive, unfortunately deceased, have been revealed for all to see. Perhaps Lord Williams and one or two others should take their own advice.

Mr. John Butterfill (Bournemouth, West) : Is it not particularly extraordinary, in the case of Lord Williams

Madam Deputy Speaker : Order. Perhaps I could give the hon. Gentleman and the House a little guidance. The Chair is not prepared to entertain criticism of Members of the Upper House unless there is a substantive motion before this House. There is no such motion this evening, and I therefore hope that the hon. Gentleman will observe the correct procedures.

Mr. Butterfill : I am grateful for that guidance. I did not intend to express a direct criticism ; I merely wished to comment that it was extraordinary that someone with such a distinguished record, who had been a managing director of Barings and, I believe, chairman of Ansbacher, should associate himself with the gentleman whom we are discussing.

Madam Deputy Speaker : Order. I have given my guidance. Hon. Members are enjoying themselves : let us keep it at that level, provided that it is within our procedures. I know that they will follow the procedures of

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the House, and stay in line with the guidance that I have given--and that given by Mr. Speaker, which will have been heard by hon. Members who were present earlier.

Mr. Hind : An important aspect of the relationship between directors and trustees is illustrated by the closeness of the relationship between the Mirror Group Newspapers pension fund and the companies. The accounts for last year contain an interesting section headed "Investment Report". It states

"As part of this process, the following changes were made in the structure of the Scheme's investment. Due to uncertain stock market conditions and relatively high interest rates, the Trustees instructed its investment managers to sell stocks, and hold an average of 20 per cent. of their portfolios in the form of cash deposits".

The trustees and directors must have been aware--as it was in the report-- that they were converting stocks into cash, which the company could subsequently borrow and invest in other Maxwell companies. As we know, that is probably what happened. It almost seems as if preparations were made for what subsequently took place.

The report continues :

"a further £12,034,000 was invested in the Common Investment Fund this fund is managed by Bishopsgate Investment Management (BIM) in conjunction with other pension funds managed by the Pergamon Group Pensions Departments. The Scheme's participation in the CIF remains crucial to the Trustee's overall strategy".

The management of a pension fund must be independent of the employer company. BIM--a company that was charged with the management of a large proportion of the pension funds--was a private company wholly owned by the Maxwell family. Effectively, they were appointing the directors and staff, and, therefore, handling all the funds from the pension schemes.

We are not discussing an arm's-length transaction. If legislation is to be drawn up, as I advocate in my Bill, that is precisely the sort of abuse that we should set out to prevent.

Mr. Keith Mans (Wyre) : Is it not slightly ironic that various investigative journalists such as Paul Foot and Alastair Campbell, who spend considerable time investigating corruption in other parts of the business world, should find that their own pensions seem to have been pinched from their own company over their heads?

Mr. Hind : I made that point earlier. While those people were investigating other people's pockets, Robert Maxwell had his hand in their pockets and was robbing them blind. That is a fact of life. I feel deeply sorry for them, and hope that their experience will be a salutary lesson that will help the rest of the country to avoid repeating it.

We cannot avoid the fact that the people appointed to manage the funds must carry some responsibility. Sycophants and nominees of the dominant majority shareholder of the employer company must not be in a position to manage the company.

Lord Donoughue, a Labour peer, was one of the directors of Bishopsgate until fairly recently. Interestingly enough, Madam Deputy Speaker, he is reported to have said in another place--

[Interruption.] --I mean, Mr. Speaker. I apologise--it was the wig that threw me.

In the other place, Lord Donoughue said that tame directors were often appointed--friends of the majority shareholder, who would not ask too many awkward questions.

Mr. Roger King : Flunkeys.

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Mr. Hind : That is a good word, and I shall adopt it. We must ensure that no more flunkeys are appointed to pension funds. It is not in the interests of the general public.

Mr. Butterfill : It might have been better if the company had been called Billingsgate rather than Bishopsgate. Then everyone would have known that there was something fishy going on.

Mr. Hind : My hon. Friend makes his own point.

The fourth matter to which the House should give serious consideration is the proportion of any pension fund that can be invested in the employer company. I shall listen with interest to what my hon. Friend the Minister says about that. I know that the Government are giving serious consideration to restricting to 5 per cent. the proportion of a total fund that may be invested in the employer company. I would certainly advocate that as a sensible course. It would prevent a pension fund from collapsing should a company go into receivership.

A recent example from the north-west was provided by the Lewis's stores group, which has recently gone into receivership. It was the subject of a motion under Standing Order No. 20 on which, with your permission, Mr. Speaker, I spoke some months ago. The receivers found that in February 1990 the company had sold an empty building in Bolton to the pension fund for £2.4 million. That building has not returned any profit to the pension fund and since then, I am told, it has declined in value.

In April 1990, £250,000 worth of contributions to the pension fund were not paid by the company. The following summer, that company borrowed £1.25 million from the fund. That sum has not been repaid, and since then the group of companies has gone into receivership, been broken up and sold. The money is probably lost to the pension contributors and beneficiaries. Although the group owned several department stores, it was not a big company. We must act with care to guard against such things happening.

Mr. Patrick Nicholls (Teignbridge) : While he is talking about tracing assets, does my hon. Friend intend to say anything about the Labour party's failure so far to admit how much money it received from Maxwell over the years, and to offer to restore it, since the donations were clearly funded directly or indirectly by pillaging the pension funds of working people? Early-day motion 365 refers to the matter. Perhaps my hon. Friend, having introduced this debate, has heard from the Labour party about its intention to reveal how much money it has received.

Mr. Hind : My hon. Friend makes a good point and I have no doubt that the House will note the early-day motion to which he referred. The fifth point to be included in a Bill is that there should be a declaration that the assets of the pension fund are the property of the contributors and not of the employer company. A case has been decided on those lines, but the principle has not yet gained widespread acceptance.

The first time when such a case came to my notice was in the mid-1980s when BTR--the Birmingham Tyre and Rubber company--tried to take over the Pilkington Group, which is one of the major employers in my constituency. On that occasion, it was made clear to me by the employees who worked and lived in my constituency

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that they had real anxiety that the balances that were oversubscribed in the pension fund would be taken by BTR as part of the takeover and would be used for the benefit of BTR because they would be regarded as part of the acquisition.

It is important that we make it clear that that should not be allowed to happen, and that all payments into the pension fund are the property of the contributors and of the beneficiaries. If that principle were established, even if there were oversubscriptions, the contributions would be carried forward in perpetuity for the benefit of future contributors and future recipients of pensions. Mirror Group Newspapers is a similar case. To whom do overpayments into a pension fund belong? At Mirror Group Newspapers, there has been a recent holiday payment for the company of the 14 per cent. that should have been made into the pension fund. That means that the company is benefiting from what would normally pass into the company pension fund for the benefit of the employees. I should like such practices to end, and we should take a clear look at the problem. Oversubscriptions should be not for the benefit of the employer company, but for the benefit of the contributors and of those who will receive pensions from the fund.

Mr. David Martin : On the subject of holidays from contributions, does my hon. Friend consider that there should be a duty to make up pensions that have fallen behind in inflationary terms? That would restore them to their original value. Should that be an obligation over the years so that, as people get older, they do not find that their pension is falling in purchasing value?

Mr. Hind : My hon. Friend makes a good point. Surely that must be the responsibility of the trustees and of the contributors to the pension fund in the terms and conditions when a pension fund is set up. Within the framework of legislation, such an aim would be difficult to achieve. It might be regarded, especially in relation to some of the existing pension funds, as quite an onerous burden to take on. However, as an aspiration, it would seem a sensible approach.

The sixth point to be included in a Bill is that the trustees should make annual reports to each contributor. The directors of an employer company are required to produce accounts which are registered at Companies house and which are distributed to shareholders. They know exactly where the company stands. The company provides a balance sheet and consolidated accounts. Shareholders know how a company performs. That same luxury is not provided to the pension fund contributors. Under the legislation that I have in mind, the contributors would be able to deal with those matters. The trustees would then be appointed by the pension fund contributors. If there was any difficulty, the contributors could go, as in company legislation, to the High Court for directions.

The seventh and most essential point is that we must have regulations to make such a system work. There should be a registrar of pension funds who would be appointed to apply to all funds to register annual returns and to distribute them to their members. Such a registrar would have enforcement powers, so that he could deal with those who failed to register and to carry out the duties imposed under the legislation. I appreciate that my colleagues will say that that is another quango. Of course

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it is. However, it is an important move which must be taken when we are considering the large sums involved in pension investment and management.

Apart from a home, a pension is probably the largest single item that we purchase in our lifetime. It is also one of our most fundamental purchases, and it is the security for our retirement. Because of that, it is important that it is adequately protected. It should be free from the pilfering or appropriation of the likes of Robert Maxwell and people who want to follow in his footsteps. We should separate the company from the pension fund and protect the workers of this country, so ensuring that we can provide adequately for their futures.

9.15 pm

Mr. David Shaw (Dover) : I congratulate my hon. Friend the Member for Lancashire, West (Mr. Hind) on securing a debate on one of the major live issues. That it has only just become so is incredible, because over the years pensions have been regarded as rather boring and not many people have been interested in them, although 11 million people have rights under occupational pension schemes.

The Select Committee on Social Security, of which I am a member, is currently investigating occupational pension funds in this country. Although it is early days, some things are clear. On the evidence that we have received, the vast majority of pension funds are operating satisfactorily.

The case that has highlighted one of the shortcomings of pension funds, the Maxwell affair as it has become known--or Mirrorgate and Labourgate as it is known in some circles--is the only known instance where a man who was once described in a Department of Trade and Industry report as unfit to be a director of a public company ended up running a pension fund. Maxwellgate is the only known instance where a man with a series of major family companies, both offshore and onshore, based in Liechtenstein and Gibraltar, ended up running a pension fund. That is why we are debating the affair today. The present system for looking after pension funds and pensioners' money should have been more than adequate. Lawyers draw up constitutions of pension funds and normally operate them to a high standard. The actuaries attempt to assess liabilities while the auditors carry out audits. With the benefit of that professional work and advice, the trustees supervise and control.

One should be able to rely on the trustees. They should be the right kind of people with proper training, qualifications and expertise to carry out the job. I would differ from my hon Friend the Member for Lancashire, West over his reference to trustees. Directors are often the right and proper people to be trustees. The directors must determine what benefits the pension fund should provide. They also have a responsibility, as company directors, for earning the money to make up the deficiencies if a pension fund becomes short of money. That can occur when investment returns are not sufficient to meet the benefits that the directors want to pay.

It will always be necessary with occupational pension schemes to have a relationship between the directors of a company and the trustees. However, I agree with my hon. Friend the Member for Lancashire, West that there should be at least one or two directors and trustees, who are non-executive directors with wider experience than just

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being a director of the company and trustees, who are totally independent of the company. That clearly failed in Mirrorgate. The Financial Services Act 1986, one of the tightest and most bureaucratic pieces of legislation that the House of Commons has ever passed, should have provided many significant controls to protect the Mirror pensioners. It appears to have failed, because the two fund management companies were allowed to come under the control of Mr. Maxwell, his family interests and the Liechtenstein and Gibraltar trusts.

Mr. Michael Irvine (Ipswich) : My hon. Friend has rightly referred to the Mirror Group pensioners. Is he aware that, according to my information, it was not just the Mirror Group pension fund that Maxwell was running? He had effective control of no fewer than seven pension funds. Many of my constituents have suffered from his pillaging in another pension fund, and there are other pension funds besides that on which he had his hands.

Mr. Shaw : I thank my hon. Friend for reminding me of that. I am aware that he has been involved in trying to defeat and thwart Mr. Maxwell in his own constituency. I hope that his constituents realise how hard he has fought Mr. Maxwell and his cronies on their behalf. I have every confidence that, at the next election, he will get a result that will show his constituents that he has taken a strong interest in looking after their affairs in this matter.

Besides the professionals and the Financial Services Act, the superannuation fund office of the Inland Revenue takes a strong interest in the affairs of pension funds. As my hon. Friend the Member for Lancashire, West pointed out, the superannuation fund office of the Inland Revenue is an internal organisation, and it is not responsible for publishing accounts. Indeed, today, in answer to a question, the Chancellor of the Exchequer refuses to tell me the latest dates for filing accounts of the Maxwell group of companies pension funds because he regards that as confidential taxpayer information.

Much tax relief is given by the authority of the House of Commons to people who have and run pension funds, yet, with large amounts of tax relief being given, we do not have, through the superannuation fund office, rights of access to very large pension fund accounts for the general public as well as, perhaps, for the people who are interested as beneficiaries. Some form of registration, very similar to that of the Registrar of Companies' operation, is necessary for major pension fund accounts. About £200 billion to £300 billion is now manged in pension fund form. Not only beneficiaries but the general public should have access to those accounts, as happens with private companies that must disclose their accounts to the Registrar of Companies.

We should focus on the main safeguard that Mirror Group pensioners and all other pensioners should have been relying upon--the role of the trustees. The trustees should have been the protection for the Mirror Group pensioners and the Maxwell Communication Corporation pensioners, and for all the other pensioners whom my hon. Friend the Member for Ipswich mentioned.

What has gone wrong, and what questions should we ask ? I prefer to ask questions rather than give answers and suggestions, because the Social Security Select Committee is still investigating the matter, and other matters

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connected wth pension funds. How could one man who was unfit to be a director of a public company have so much power ?

That is not the only thing that was said in the report. I read the Department of Trade and Industry report extensively in 1981, when I worked in a merchant bank and Mr. Maxwell came on the telephone to say that he wanted to be a client of that merchant bank. I rejected Mr. Maxwell as a client of that bank not only because of the statement that he was unfit to be a director of a public company but because the rest of the report shows that he did not take professional advice. He was not interested in legal or financial advice ; he was interested only in the ends of whatever he wanted to achieve.

We must also ask how Mr. Maxwell, with his reputation, could end up running an investment management company that was controlled through Liechtenstein and Gibraltar.

Mr. Butterfill : Mr. Maxwell's track record did not relate only to Pergamon. Before that, a mail order company had collapsed in considerable disorder and disarray. There was therefore a long track record of such problems being associated with Mr. Maxwell.

Mr. Shaw : My hon. Friend is correct. Before Mr. Maxwell became a Labour Member of Parliament there was what one might call a "blemish" in his background, but it got worse over the years. What happened is, therefore, all the more strange given the Liechtenstein connection, which was obviously set up for tax avoidance or tax evasion purposes. Mr. Maxwell was a man who wanted to avoid doing what the rest of us in this country do- -pay our taxes--by operating through Liechtenstein. According to a written answer that I received today, nine Department of Trade and Industry reports have been produced in recent years showing that Liechtenstein is a dubious place for any company in this country to have business connections with. However, Mr. Maxwell, who was fiddling his taxes, ended up owning investment management companies that were supposed to be properly regulated in the City of London.

Mr. Roger King : I have been listening to what my hon. Friend is saying and understand the message that he is successfully putting across, that change is required because we need to protect ordinary pensioners from having their pension funds looted by freebooting capitalists. Does my hon. Friend have any evidence of how widespread that practice is? Does it touch every single pension fund? One gets the impression that every pension fund is being plundered by out-of-control behemoths, like the hideous Maxwell. My hon. Friend should look carefully at this case, because Mr. Maxwell was an outrageous and extraordinary creature, who somehow controlled everyone around him, even honourable newspapers such as The Daily Mirror and the campaigning journalists who have been mentioned. I wonder whether my hon. Friend, in seeking to avoid any repetition of what has happened, is going a little too far in seeking all the changes to which he has referred, bearing in mind the fact that vast numbers of perfectly honest and respectable trustees control pension funds. Let us hope and pray that it does not happen again. After all, Mr. Maxwell is buried on the Mount of Olives and we are

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told that, in the event of a second coming, he will rise up to haunt us all again. Let us hope that, if we get hold of a JCB, we can eliminate that possibility. But let us remember that we shall probably not see the like of him again.

Mr. Shaw : I began by saying that this is a particularly unusual case because Mr. Maxwell was named in a Department of Trade and Industry report and we do not know of any other example in which somebody who was named in a DTI report has ended up running a pension fund or pension fund companies. I think that my hon. Friend was intending to suggest that Mr. Maxwell was probably not a capitalist, but a socialist who liked living off other people's money. I am sure that my hon. Friend would want us to ask other relevant questions, such as how all this came about. We must ask ourselves how Mr. Maxwell became so desperate for cash that he plundered the pensions of 16,000 people in the Mirror group and the Maxwell Communication Corporation and other pension funds. We are talking about something serious and about a serious amount of money. We must also ask ourselves why no one stood up to Mr. Maxwell. Why did the trustees not stand up to him? We have heard earlier about trustees in the other House, whom we must not talk about for various reasons of propriety and the rules and regulations of the House. However, we must question how people with titles could turn out to be such a weak lot. Surely it is not simply because they are socialists or members of the Labour party. Surely there is more to it than that.

Why did directors resign from some of those companies in the past year without explanations being given? Why did not the remaining directors, some of whom are members of the upper House and have socialist and Labour party connections, stand up and inquire? These members of the upper House demand enough information of the Government. Why did not they demand the information of Mr. Maxwell and his cronies? One is led to the conclusion that in this case the trustees consisted of a lot of political cronies and that the real questions were not asked because of Mr. Maxwell's political power and connections.

I come to the last and significant question that I want to ask.

Mr. Allan Rogers (Rhondda) : On the nine o'clock news tonight, we learned that evidence has come out that the Department of Trade and Industry was told about possible irregularities over a year ago and took no action. The hon. Gentleman would do better to address the system and structure that control pensions, rather than make cheap political points. Everyone is worried about irregularities in the City. For a long time, the Opposition have searched for structures and asked the Government to implement them against their friends in the City.

Mr. Shaw : The so-called irregularities of which the hon. Gentleman speaks are being investigated by the Conservative Government and have been investigated for some time. They are being dealt with. I cannot go into the irregularities in detail, because they are not relevant to the debate. However, in all probability the irregularities were financed by pension fund money. The purpose was to create a false market in the shares.

Any decent director of a public company--in the case of Mirror Group Newspapers and Maxwell

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Communication Corporation, those directors were Labour party sympathisers and supporters--would take steps to check why the price of the shares in the market was above what it should have been. Clearly, the Labour party supporters who were on the boards of those two companies did not investigate to a sufficient extent their share prices, where the pension moneys were going and what the trustees were doing.

The key questions are : where has the money gone, and what lessons can we learn for the future? The money appears to have been diverted into 400 companies, to end up sometimes in the banks and sometimes in private family money accounts around the world.

But more significantly and importantly, there is a political aspect to the loss of the pension fund moneys. Moneys have gone into publications such as The European . The European unfortunately brings us close to the question whether the Leader of the Opposition and his family benefited from Maxwell or Mirror Group pension fund moneys. Two children of the Leader of the Opposition were employed at The European newspaper. That is very close to the Leader of the Opposition. It is sad, and normally I would not make much of it, but the Leader of the Opposition did not worry about unleashing the dogs of war on Mark Thatcher when my right hon. Friend the Member for Finchley (Mrs. Thatcher) was Prime Minister. In the end, Mark Thatcher went abroad to make his money legitimately and properly. I am sure that the Leader of the Opposition will want to come to the House and make a statement about all moneys that his family may have received directly or indirectly from any Maxwell organisation, whether The European newspaper or any other. He should make a statement about the full amount of money and what he proposes to do. He should state whether he proposes to repay it to the Mirror Group pensioners and other pensioners who are suffering and may suffer as a result.

It would be helpful also if the Leader of the Opposition would answer some obvious questions. Has his office--has he--at any time benefited in any way, shape or form from Mr. Maxwell's and other contributions? We know that the Labour party has benefited from Mr. Maxwell. We know that pension fund money may have gone to the Labour party, even if indirectly. We know that £38,000 went to the Boundary Commission fighting fund and that £44,000 went to the Labour party direct. We know that other sums have been used to support advertising and publications of the Labour party.

The suggestion has been made that a Member of the upper House closely connected with the deputy Leader of the Opposition may also have facilitated that person receiving money to finance his office. We all know that politics is tough in this country and that there are not state moneys in that connection, but it is important when something like this happens that, if pensioners' money has ended up financing the offices of the Opposition, that money must be declared openly, and a statement should be made on the Floor of the House. I hope that personal statements will be made.

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