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Pensions Review

3.31 pm

The Secretary of State for Social Security (Mr. Peter Lilley) : With permission, Madam Speaker, I would like to make a statement about the framework of law and regulation of occupational pension schemes and about the plight of Maxwell pensioners. Rarely in the catalogue of crime has there been a fraud as callous and despicable as the pillaging of pension funds by Robert Maxwell. It raises two questions. First, how can we minimise the loss and anguish faced by the pensioners? Secondly, how can we ensure that such a crime never recurs?

The whole House will share a deep concern for the distress Maxwell pensioners face as a result of this appalling crime. Unfortunately, it is still not possible to be certain of its full impact on pensioners. At present there is a gap of some £350 million between the assets which remain secure in the various Maxwell pension schemes and common fund and their liabilities to present and future pensioners.

The assets siphoned off through the Maxwell private companies seem to be largely beyond recovery, but over £200 million of assets were given to banks and others as security against loans. It is not yet clear how much of this will eventually be recoverable by the trustees.

Mirror Group Newspapers has agreed to meet the liabilities to its 15,000 pensioners and employee members. Pensioners of Maxwell private companies now in administration have no such security. Most schemes are continuing to pay pension from available assets, but the Headington Pension Plan has not yet been able to pay its 240 pensioners their pensions for May and June. Moreover, the Maxwell Communication Works Scheme has said that from 1 July it will be able to pay some 4,000 of its pensioners only 30 per cent. of their entitlement.

Over the longer term, the priority must be to identify, locate and establish ownership of the stolen assets and secure their return. The liquidators are actively pursuing all legal avenues for the recovery of stolen assets. That will no doubt include appropriate legal action against any members of the Maxwell family or others involved in transactions which may be found to be unlawful.

However, this is not simply a legal issue. Over the years, many financial institutions had dealings with Maxwell companies from which they profited handsomely. Such transactions were perfectly honourable. However, the institutions involved may well feel some moral obligation to assist the pensioners who have so cruelly lost at Maxwell's hands.

Moreover, other financial institutions, too, may recognise the value to them of maintaining faith in the integrity of occupational pension funds. I want to make it possible for them to make some tangible contribution to helping the pensioners defrauded by Robert Maxwell.

Expediting the return of assets and securing contributions from the private sector will be a complex and lengthy process. The Government may be able to give it an impetus. I am therefore immediately setting up a special unit in my Department to take that forward.

The unit will work alongside the trustees and others seeking to secure the return of assets and their equitable distribution between schemes. The unit will do all that it can to speed up the return of assets. The Bank of England

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supports the foundation of the unit. The unit will also help to set up a trust into which voluntary contributions from the private sector will be paid.

Those steps will help to minimise the shortfall in the long term. But there is a particularly acute problem in the short term. That is not just because the process of identifying, establishing ownership and securing return of assets is an immensely complex and lengthy one. But, of the £230 million of secure assets, some £100 million are locked in the common investment fund since, unfortunately, it has not been settled how they should be allocated between the nine different Maxwell schemes. The trustees and liquidators have now agreed to accept the court ruling on the allocation of assets. But it will take some months before that ruling is given. Meanwhile, those assets are frozen.

No Government could accept a duty to make good losses resulting from fraud or theft of savings. But I do think it right to help to ease the unique short-term pressures that pensioners face while frozen assets are being released and progress is made in restoring and obtaining other funds.

I therefore propose to provide temporary, emergency funding to help Maxwell schemes which are unable to maintain pension payments over the next few months.

The funding that I am making available will amount to £2.5 million in the form of repayable grants. The intention is that the grants should be repaid eventually, provided that the assets of the pension funds are sufficient to permit that without detriment to their members.

There is one final measure which may be of marginal benefit to some Maxwell pension schemes, and that is to bring in regulations to implement the provision of the Social Security Act 1990 which will make any deficiency of pension funds that have to be wound up a debt on the employer company. I shall do that at an early date. It will therefore apply to pension funds of the Maxwell companies. I would not wish to raise the hopes of Maxwell scheme members that they will stand to gain greatly from any pay-out to ordinary creditors of their former Maxwell employer companies which are now in administration. Nevertheless, we are committed to implement that provision and I feel it right to do so now.

The Maxwell fraud is shocking because it is so exceptional. Most private pension schemes have served their members well. They have expanded considerably over the past decade. This Government are committed to reinforce their role. They provide substantial additional benefits to those in retirement, and have contributed significantly to the growth in pensioners' incomes which we have seen over the past decade. More than half of all employees are members of such schemes. We are determined to ensure that their standing is maintained and enhanced, and the security of their members protected.

The Maxwell affair has focused attention on the whole framework of pension scheme law. It has raised questions about issues, many of which may have played no part in that crime, but which none the less need answering. I therefore agree with the Select Committee on Social Security that there should be a thorough review of this area. I propose accordingly to implement our manifesto pledge by establishing an independent committee with the following terms of reference :

to review the framework of law and regulation within which occupational pension schemes operate, taking into account

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the rights and interests of scheme members, pensioners and employers ; to consider in particular the status and ownership of occupational pension funds and the accountability and roles of trustees, fund managers, auditors, and pension scheme advisers ; and to make recommendations.

I believe that those terms of reference will enable the Committee to consider all the issues raised by the Select Committee in its valuable report. I am pleased that Professor Roy Goode QC, Professor of English Law at Oxford University, has agreed to chair the review. I shall announce the names of members of his committee shortly. The committee will invite evidence from all interested parties and hold a number of public hearings. I have asked Professor Goode to report within 12 months or earlier if possible. If the committee finds changes which should be initiated urgently I have asked it to report them to me before it concludes its work.

I should emphasise that the committee will not be asked to carry out an investigation of the Maxwell affair. That involves crime and fraud and is rightly being investigated by the Serious Fraud Office. In conclusion, Madam Speaker, I have initiated a wide-ranging, open and independent review of pension law. I have taken exceptional steps to ease the acute short-term pressures on some pension schemes and their pensioners. I have established a unit to mobilise support for the pensioners from those in the City who recognise an interest or obligation towards them. I believe these measures are imaginative and responsible. I commend them to the House.

Mr. Michael Meacher (Oldham, West) : Is the Secretary of State aware that the Opposition welcome the fact that today's lobby by the Maxwell pensioners and tomorrow's Opposition day debate and vote to highlight their plight have finally jolted the Department of Social Security out of its six -month long stupor? This is the first positive action by the Government since the Maxwell scandal broke nine months ago and the Opposition welcome it--as far as it goes.

In essence, the statement tells us few details except that the rescue package of £2.5 million amounts to a derisory 0.5 per cent. of the stolen assets. Why will the package cover fewer than half of the pensioners at risk? Why will not every one of the 12,500 pensioners who have already or are due soon to lose all or a substantial part of their pension receive compensation? Why will not every pensioner who retires in the coming months also be covered? Will the compensation payment top up the pensions of those covered to 100 per cent.? If not, how much will pensioners receive?

What does a few months mean? Does it mean to October, to December, or what? Why is the right hon. Gentleman imposing such a short and arbitrary deadline when the recovery of the assets and any litigation that may ensue may take far longer than that? Is it not clear that the Secretary of State's temporary relief will leave pensioners cruelly exposed long before a final settlement is in place? Is it not clear that the Government's commitment of some £2.5 million falls far short of the extent of their liability since the Department of Trade and Industry issued a licence under the Prevention of Fraud (Investments) Act 1958 to a private Maxwell company which Robert Maxwell then used as a channel to steal the pensioners' money? Is not the £2.5 million offered in the statement to pensioners insultingly meagre when compared with the £160 million offered to Barlow Clowes

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shareholders who chose to risk offshore investment in search of speculative profit? Does the right hon. Gentleman accept that this finger-in-the-dyke exercise will not do as it bears no relation to the full extent and depth of the Government's moral and legal responsibility in the matter?

We welcome the belated announcement that section 58B of the Social Security Act 1990 will finally, after a delay of two years, be implemented. But will the right hon. Gentleman confirm that that will merely make the pensioners unsecured creditors while other preferential creditors will remain ahead of them in the queue? On the establishment of a commission to review pension fund law, is he aware that the Opposition have repeatedly asserted that such law should be reformed, and that we regard a year's delay as excessive? Is not there already sufficient understanding of the law's deficiencies, and a consensus as to the remedies, to allow some emergency measures to provide protection this year to every member of an occupational pension fund?

Is the Secretary of State aware of the almost universal support for the establishment of an adequate compensation fund, as already exists in every other major western country?

Following the Barber judgment, which established that pension contributions are deferred pay and are therefore the property of their members, will he accept that European law requires that at least 50 per cent. of trustee places should go to scheme members, employees and pensioners?

Finally, will the Secretary of State accept that there is no need to wait for a year, and risk another pension scandal, to implement the important protections of a compensation fund and a reconstitution of trustee boards? They could and should be done now.

Mr. Lilley : I am grateful to the hon. Member for Oldham, West (Mr. Meacher) for his welcome, albeit grudging, of the scheme. He describes the package as derisory. He does not seem to realise that it deals with an acute short-term pressure, unique to this case. It so happens that funds, which have already been discovered in the hands of the central fund, are frozen. We need time for the money to be released and the measure will create time for that and for progress to be made on securing additional funds, which were previously stolen, and contributions from the City.

I am advised that the amount is sufficient to deal with that period when we have acute short-term pressure. The amount will be handled by the unit, probably in negotiation with the most badly affected schemes. It will be up to them to decide how much they top up pensions in the interim, with our help.

Mr. Meacher : What if it takes longer?

Mr. Lilley : I believe that the court will take a matter of months to rule and there is no reason to suppose that the case will take longer. It would be foolish to base our judgment on hypotheses rather than the facts before us.

The hon. Member for Oldham, West is always willing to make lavish promises and has elsewhere promised to bail out all those affected. It is widely recognised that no Government can accept a liability to reimburse all victims of fraud and theft, nor is there any question of Government accepting responsibility.

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I am glad that the hon. Member for Oldham, West recognises and welcomes our implementation of section 58B of the Social Security Act 1990. I confirm that his interpretation is correct and that, as Parliament decreed in passing that Act, it will make pension funds ordinary creditors of the schemes. That is why I made it clear that one should not place excessive expectations on that.

The hon. Gentleman criticised the 12-month duration of the review as too long. I made it clear that that is the maximum and I have asked the Committee to report in a shorter time if it can and, if it comes across issues on which we should take immediate action, to report while carrying out its inquiry.

The hon. Member for Oldham, West concluded by saying that we should introduce a scheme immediately to provide 50 per cent. employee representation on pension funds. In all of the Maxwell pension funds, 50 per cent. of their trustees were employees. That did not prevent the crisis. None the less, we shall be open to suggestions from Professor Goode's review on anything that should be done in the short term to overcome any problems that he identifies.

Several Hon. Members rose --

Madam Speaker : Order. Before we proceed, the House will have seen for itself the number of right hon. and hon. Members rising to question the statement. No way can I call them all, so many will be disappointed. I remind the House that we are not having a debate but questioning a statement. I therefore ask right hon. and hon. Members to put one precise question for the Secretary of State to answer precisely. Then we can get through the questions efficiently and properly.

Mr. Richard Page (Hertfordshire, South-West) : In contrast to the carping comments by the hon. Member for Oldham, West (Mr. Meacher)--[ Hon. Members-- : "Question."], I thank my right hon. Friend for his statement, which is almost exactly that for which I and other right hon. and hon. Members have been asking for the past few weeks--especially the short-term relief to pensioners. Does my right hon. Friend agree that his remarks and actions today will allow pressure to be kept on the banks especially to find out exactly where the money has gone? A decision on the final compensation to Maxwell pensioners can then be made on the basis of fact, not emotion, and with proper regard to who is responsible--rather than just relying on taxpayers' money.

Mr. Lilley : I am grateful to my hon. Friend for his comments, and I pay tribute to him for the part that he played in pressing the case of Maxwell pensioners. My hon. Friend has undoubtedly helped considerably in bringing about the measures that I was able to announce today.

My hon. Friend is right to emphasise that there is an acute short-term problem, and it is that which the Government have sought to help ease in the first place. He is right also to recognise that the focus is on the financial institutions. It would be wrong for anyone to suggest that the focus should be taken away from them.

Mr. Archy Kirkwood (Roxburgh and Berwickshire) : Can the Secretary of State give the House an assurance this

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afternoon that, following his announcement, all Maxwell pensioners will, at least over the next six months, have 100 per cent. of that to which they are entitled?

Mr. Lilley : I very much hope that the fund, in agreement with the trustees of the pension schemes--who have the ultimate

responsibility--will be able to make it possible for all the pension schemes to maintain the payment of pensions. But that must be for discussion between them and those who will be arranging the distribution of the grants.

Mr. David Shaw (Dover) : Will my right hon. Friend accept the congratulations of the whole House on implementing the all-party recommendations of the Select Committee on Social Security so speedily and efficiently after he entered the Government? Will he confirm that he will take up with the financial institutions the fact that many institutions that go round selling themselves as the smartest banks and financial institutions in the world are suddenly declaring that they were incompetent when it came to assessing whether Mr. Maxwell was honest or otherwise? Will he also confirm

Madam Speaker : Order. The hon. Gentleman has asked two questions on my count.

Mr. Lilley : My hon. Friend the Member for Dover (Mr. Shaw) also played a valuable part in investigating the affair. I agree with him that the onus is on those who had dealings with Maxwell in the past to examine their consciences and to see whether they should share the profits that they made in the past with those who suffered a great loss at the hands of Maxwell.

Mr. Frank Field (Birkenhead) : Does the Secretary of State accept that the House welcomes many of his recommendations today, but is perhaps somewhat surprised at the sum of the compensation--if that is the term-- that he is offering at this stage? Can he tell us more about how he arrived at that sum? How was it calculated? Does he believe that it will be adequate to answer the point raised by the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood)? Will he give the House an undertaking that, if the trustees report to him that there are not adequate funds, he will come back to the House before the fund is terminated?

Mr. Lilley : I am grateful to the hon. Gentleman for those remarks and for his earlier ones. I should explain that the money is not compensation. It is designed to ease the acute short-term pressures facing some of the funds and their pensioners. I am advised that the sum should be enough to enable all pension funds to maintain payment of pensions during the months in which we are waiting for the court to make its ruling on the allocation of the frozen funds. During that time, we also hope to make progress on securing the return of stolen assets and on securing contributions from the City. What we cannot do is suggest that the Government offers an open-ended guarantee that would remove pressure on other quarters to contribute. That is an important aspect.

Sir Peter Hordern (Horsham) : What is the position of the banks? If the banks advanced money to Maxwell on the security of the assets in the pension funds which were not his to pledge, should they not have the responsibility of returning those assets to the pension funds?

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Mr. Lilley : My hon. Friend makes a powerful point. There is a legal question about the ownership of such assets, but there is also a moral question, which we invite the banks and other financial institutions to answer. I am sure that many will be willing to answer positively.

Mr. Dennis Skinner (Bolsover) : Is the Minister aware that while the Maxwell clan is still living on the fat of the land, many of the thousands of people that I have met on the Maxwell lobby do not have two ha'pennies to rub together? I have some advice for the Secretary of State regarding the banks. Will he institute the legislation that was used against the miners' funds in 1984, when that money was hunted down in Swiss, Luxembourg and Irish banks? If it was good enough for the National Union of Mineworkers, it should be good enough for Maxwell. The Secretary of State should get the money from the banks and put it into the pockets of the Maxwell pensioners.

Mr. Lilley : The hon. Gentleman should not think that he is the only person who has sympathy for the Maxwell pensioners. It is precisely because the whole House recognises the acute pressures under which they have been placed that I made my statement today. An array of legal methods is available to the liquidators and they will use those methods vigorously, with the help of the unit that I have established today, to achieve the rapid return of the stolen assets where that is possible.

Mr. Peter Bottomley (Eltham) : Does the Secretary of State accept that, while he has advisers to help him, the role of hon. Members is to stand, especially, at the side of those who never worked for Maxwell, but whose pensions went into his hands and out of those of their trustees when they retired? We shall not rest until we know that those pensioners will continue to receive the money on which they retired and on which they expected to live in the same way as other pensioners.

Mr. Lilley : I agree with my hon. Friend. Those pensioners evoke peculiar and extreme sympathy. We wish to see them benefit from the measures that I have undertaken today.

Mr. David Winnick (Walsall, North) : Does the Secretary of State accept that it is deeply offensive to the victims of these events to see the continuing millionaire life style of the Maxwell family? Would we be right to come to the conclusion that all those held responsible for plundering the pension funds--it was not Maxwell alone--will be brought to justice?

Mr. Lilley : For almost the first time in my life, I agree with the hon. Gentleman.

Mr. Patrick Cormack (Staffordshire, South) : Bearing in mind the crucial role that the banks can play and the positive contribution that they can make, will my right hon. Friend summon the chairmen of the clearing banks and other suitable financial institutions to tell them that hon. Members on both sides of the House are anxious that they should honour their moral obligations?

Mr. Lilley : I have no doubt that they will be paying close attention to proceedings in the House, but should it be necessary to act as my hon. Friend suggests, I shall, of course, do so. However, I hope that the unit that I have established today will make progress, establish a trust fund and secure contributions.

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Mrs. Gwyneth Dunwoody (Crewe and Nantwich) : Is the Secretary of State aware that, as far back as the late 1960s, the Board of Trade produced clear evidence on whether Mr. Maxwell was fit to be in charge of a company? The banks should be told that, as they ignored that evidence, they should return immediately all the assets that they hold, which are not theirs morally or, I suspect, legally.

Mr. Lilley : The hon. Lady is quite correct. The Department of Trade and Industry published a report saying that Maxwell was not fit to be in charge of a public company. At that stage, we had no power to disqualify people from being directors as a result of such findings and it was only subsequently that the House took those powers without retrospective effect. None the less, the warning was made in public for all to see and those who dealt with Maxwell did so potentially knowingly.

Mrs. Marion Roe (Broxbourne) : I welcome my right hon. Friend's statement this afternoon, with particular reference to the proposed review of pension law. Has a time limit been imposed on the repayable grant that he outlined ?

Mr. Lilley : No, we expect that money to be repaid only if the pension funds found themselves in a position to do so without detriment to their pensioners--in other words, if they were successful in securing the return of stolen assets, in which case the money should be returned to the public purse.

Mr. Alfred Morris (Manchester, Wythenshawe) : Has the Secretary of State met any of the pensioners who are now lobbying the House ? If not, will he arrange to do so ? Is he aware that they will be deeply disappointed that he has not gone much further today and that they want a lifebelt which is adequate for its task and will be available until rescue is secured ?

Mr. Lilley : Of course I have met Maxwell pensioners and have a considerable number in my constituency. By and large, they will welcome the measures that I have taken today. Naturally, many would like an immediate and overall guarantee, but they recognise that, realistically, no Government could be expected to underwrite all losses made through fraud and theft from savings. They will therefore recognise that the measures that I have outlined offer the best way forward in their difficult plight.

Mr. Spencer Batiste (Elmet) : Will my right hon. Friend confirm that the consequence of what he has announced today is that the Arnold pensioners in Leeds, whose payments have already been stopped, and the Petty pensioners who are threatened with massive reductions in their payments, will now have those made up, pending the resolution of the issues that he has described ?

Mr. Lilley : Yes. Our intention is that those funds should be able to resume payment to their pensioners.

Mr. Derek Fatchett (Leeds, Central) : Further to the Secretary of State's last response, there is no guarantee that that money will be forthcoming for the Arnold and Petty pensioners because the Secretary of State has already said so in answer to an earlier question. Will he confirm that again ? Moreover, will he acknowledge that his statement is a great disappointment to those pensioners who lost their pensions in May this year because of the fraudulent actions of another person ? Will he also

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acknowledge that his statement has increased their insecurity because they have no guarantee that they will have any rights in the future ? The Secretary of State is playing for time with other people's investments and futures.

Mr. Lilley : The hon. Gentleman is trying to attach a dark cloud to a silver lining. It is clear that the measure is intended to enable the pension funds to resume and maintain their pensions, but we do not offer an unlimited guarantee into the indefinite future. I have made that clear.

Mr. Ian Bruce (South Dorset) : My right hon. Friend has told the House that a unit will look at the institutions in the City but will he go further, in line with what the hon. Member for Bolsover (Mr. Skinner) was saying, and have that unit examine matters such as buying political influence from the Labour party, buying football clubs and things of that nature? Will the unit be able to look at such fraudulent conversion and try to get money back from those who have it in their bank accounts?

Mr. Lilley : All those who had close dealings with Mr. Maxwell will doubtless be examining their bank accounts.

Mr. Alan Williams (Swansea, West) : Is it the Minister's intention that returned stolen assets or contributions to his new trust fund will be tax deductible?

Mr. Lilley : I hope that the trust fund will have charitable status and that no question of taxation would therefore arise.

Mr. Tim Rathbone (Lewes) : Will my right hon. Friend elaborate on the future of pension fund trusteeships? Can he reassure the House that the steps that he is now putting in hand will ensure, to the best of the Government's ability, that such a thing can never happen again?

Mr. Lilley : One can never be absolutely certain that one has created a system that is 100 per cent. foolproof against crime. However, we can certainly ensure that such a crime never recurs, and that we have a system of pension fund law and regulation that is up to date, efficient and deals with some of the issues that have been highlighted as the spotlight has played across the spectrum of law and regulation in this sphere, so that people have greater security than in the past. We should not forget that occupational pension funds have been of great benefit to the bulk of their members over the years. We want such pension funds to be of even greater benefit in future.

Mr. Robert Hughes (Aberdeen, North) : While much of the Secretary of State's statement requires digestion, will he now answer one specific question? What is the definition of a Maxwell pensioner? Does it mean someone of normal retirement age or does it refer to the age at which people become eligible for the benefits from the pension scheme? Will he go further than hope that pensioners receive a 100 per cent. payment, and guarantee that they will get a 100 per cent. payment?

Mr. Lilley : If the hon. Gentleman is dealing with complexities of people with the right to early retirement, that must be a matter for discussion with representatives of the individual pension schemes. That is why an across-the-board, 100 per cent. guarantee cannot be given.

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Mr. Bob Dunn (Dartford) : Is the Secretary of State aware that many Maxwell pensioners have today expressed great anger at the sight of the Maxwell family continuing to enjoy high living standards, and being involved in the running and setting up of businesses, when many pensioners have been denied the financial security for which they have worked? Is it not time to take action against the Maxwell family to prevent its members continuing their dastardly deeds?

Mr. Lilley : There are deep feelings about that issue among all hon. Members, and a desire to see the appropriate action taken against anyone-- whether members of the Maxwell family or others--who have acquired assets illegally and have an obligation to return them to those who have suffered as a result of the depredations on the Maxwell pension fund.

Mr. Alex Carlile (Montgomery) : Will the Secretary of State assure the Floform pensioners in my constituency that the £2.5 million grant that he so generously announced this afternoon will be increased if the short-term pressures prove greater than he expects? Does the Secretary of State expect those who have not received pensions for the past two months to start receiving them now?

Mr. Lilley : Certainly, it is our clear intention that those who have not been receiving pension payments should now start doing so, and that those threatened with having them cut off should continue to receive them. I am advised that the £2.5 million is adequate to ensure that we can ease the problems of this unusual short-term period, when hundreds of millions of pounds of assets are frozen and unavailable to the funds. Let us get the matter in perspective : £100 million of frozen funds will be released when the court rules on how that money is to be distributed among the various schemes, and there is no reason to suppose that the court will not rule.

Mr. David Madel (Bedfordshire, South-West) : My right hon. Friend mentioned the Maxwell Communication Works pension fund and the potential difficulties that may be faced after 1 July. Having given his welcome statement on temporary help, can he confirm that those pensions will be paid in full from 1 July and that it is the Government's intention that full payments should continue through the autumn? I am thinking particularly of the Maxwell Communication Works pension fund, which has brought problems to Bedfordshire and Hertfordshire.

Mr. Lilley : It is certainly our intention that those who are not being paid pensions and those threatened with a cut in pensions should receive and maintain pension fund payments. There will have to be discussions between the trustees of those funds and the unit distributing the money to decide how best to operate the scheme and the precise amount to be paid out in the light of the trustees' long-term position.

Mr. Tony Banks (Newham, North-West) : What advice is the Governor of the Bank of England offering to the banks that are effectively in possession of stolen property? Will the Secretary of State support the Select Committee in efforts to reinvestigate the affair and recall those two crooks the Maxwell brothers to answer questions, so that

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if the brothers do not do so, they can be brought to the Bar of the House and, if necessary, put behind bars where they belong?

Mr. Lilley : The Governor of the Bank of England fully supports the unit that I have established today. A Select Committee would have to be re- established before it could consider who to interview or reinterview, which would be a matter for it, not me.

Mr. Michael Bates (Langbaurgh) : Does my right hon. Friend agree that, if a regulatory failure has occurred, substantially more responsibility must be placed on the pensions industry as a whole? Given that the industry has assets of some £300 billion, and that many of the participating funds are in surplus, a swift contribution to the trust fund is surely in its own best interests.

Mr. Lilley : My hon. Friend has made a good point. There are many precedents for members of an industry--in their own interests--to take action to ensure that that industry ranks high in the faith of the public, and maintains a good public reputation. I am sure that the pension fund industry will want its reputation to remain as good as it always has been, and should be. One way to secure that reputation is to ensure that the plight of the Maxwell pensioners is considerably eased, and I very much hope that the industry will be able to contribute to the fund.

Mr. John Gunnell (Morley and Leeds, South) : The Secretary of State has made it clear that whether 100 per cent. of the pensions that Maxwell pensioners currently expect is paid to those pensioners will be up to individual pension funds and their trustees. Will he make it clear to those trustees that the Government intend pensioners to receive 100 per cent.? If the funds that he has announced today are not sufficient to enable that to happen, will the right hon. Gentleman ensure that sufficient funds are made available for pensions to be maintained at the level expected by these innocent people before they learnt of Maxwell's crime?

Mr. Lilley : I have made it clear that the Government cannot underwrite 100 per cent. pension payments indefinitely. We have made available a fund that will enable the restoration and maintenance of pensions that have been cut during the period concerned, or cuts which have been threatened. It will, however, be up to the trustees and those who handle the money that I have made available to decide how it should best be allocated during a period in which we are subject to acute pressures and are waiting for a much larger sum to be released. I hope that much more money will come from the City, and from the return of stolen assets.

That is the long-term solution. People should not expect the action that I have announced--action to deal with the short-term pressures--to resolve the long-term problem ; that will be done through the return of stolen assets, and the securing of contributions to the trust fund from those who feel obliged and willing to contribute.

Mr. David Sumberg (Bury, South) : Does not my right hon. Friend's statement constitute the first public recognition that the Government have a role to play in these matters? That is very welcome.

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Does not the onus now lie on the banks? This is not their money, or Maxwell's money ; it is the pensioners' money, and honour and justice dictate that the banks should do something about it.

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