House of Commons Hansard Debates for 9 Jun 1992

Column 231

Department of Trade and Industry must surely be at risk of being accused of negligence if they do not take action to protect our citizens from Liechtenstein and other tax havens which are robbing many of our citizens.

I have been told by the DTI that the Financial Services Act 1986 powers to trace and recover assets cannot be used in Liechtenstein or even outside the United Kingdom. That is not good enough. We must have changes to make sure that we have the powers to do so. The motion implies that the Government are to blame. That is clearly wrong. So far, there is no evidence to suggest that the DTI wrongly licensed LBI in 1988, although, of course, there is an argument that the legislation that allowed LBI to be registered was inadequate, but that legislation was supported by three Labour Governments. If anyone is to blame, it is a number of close Labour party friends who were responsible for pensioners' money. Indeed, one man in the House of Lords is sitting on £0.5 million of pensioners' assets.

Mr. Deputy Speaker : Order. It is out of order to criticise a Member of the House of Lords.

Mr. Shaw : I am sorry, Mr. Deputy Speaker. I withdraw any comment about the member of the House of Lords, other than the fact that I hope that any man who benefited to the tune of £0.5 million from LBI would want to repay that money as soon as possible.

I am disappointed also to know that, apparently, the Serious Fraud Office may yet have to go through another 12 months' work before charges might be brought. I hope that Ministers will ensure that the Serious Fraud Office has every possible support to bring early charges. We must find a better way of bringing to justice people who have taken pensioners' money by criminal acts.

Although responsibility for the Maxwell affair must rest with the financial institutions, the Government have a role. They must protect the small man against the big institutions which, in this case, acted out of self- interest and not their real customers' interest. Ultimately, the Government must ensure that no Maxwell pensioner loses his home or goes hungry through the failings of our financial institutions.

9.8 pm

Mr. Ron Leighton (Newham, North-East) : We have been privileged to hear remarkable maiden speeches by my hon. Friend the Member for Rossendale and Darwen (Ms. Anderson) and by the hon. Member for Hertfordshire, North (Mr. Heald). I am sure that the House will want to hear from them again very soon.

Before I came to the House, I worked as a printer on the Maxwell publications, although that was before Maxwell owned them. As a result, I know a large number of Maxwell pensioners. I worked with them, and I know them to be honest, decent, responsible and prudent people who always paid in for their pensions. They regarded their pensions as their most important and valuable asset, perhaps after their house--the foundation of their lives in retirement. They put their trust in the pensions industry and the financial houses. After all, the financial houses were all led by people who were Sirs or Lords, people who were always mentioned in the honours list. The employees thought that they lived in a law-governed society. All the

Column 232

firms were licensed by the Government and therefore they thought that their pensions were as safe as the Bank of England.

Then came along Mr. Maxwell. He took over companies such as the Mirror Group and others. There was immediate fear and unease among members of pension schemes. I received a deputation in the House from the Daily Mirror led by Mr. Joe Lynch, who told me that Maxwell was taking over the Daily Mirror only to get his hands on the pension fund. He told me that if Mr. Maxwell could get the pension fund, which was worth about £500 million, he would get the Daily Mirror for nothing. I was told by the workers in that firm that that was what it was all about.

The members of the deputation asked me what protection they had in law. I am not an expert in the law but I looked into the matter. It seemed to me that they had precious little protection. In Britain the protection of the law for pension funds is inadequate.

I arranged a meeting for the Daily Mirror employees with my hon. Friend the Member for Dagenham (Mr. Gould) who at that time was Opposition Front-Bench spokesman on the subject. The purpose of the meeting was to discuss the changes that a Labour Government would need to make. Unfortunately, the Labour Government was not to be. The first thing that Maxwell did when he went into the Mirror Group was to arrange a pensions holiday. He stopped paying any money into the pension fund. He was interested only in taking money out. Of course, he then took over many other firms and their pension funds and systematically robbed them. Can the House imagine and understand the pain, anguish, suffering and misery of the law-abiding citizens who had done everything right, acted prudently and religiously paid in their moneys only to find that their greatest asset, rightfully theirs, the foundation of their future life, had been stolen? They were robbed not by a burglar with a mask but by the chairmen of companies and City gents. The Maxwell pensioners came to me and asked how it was possible in this country of ours that such a thing could happen under the law and under the rules of the City.

We in the House must start asking ourselves a few questions about banks. I believe that the banks are serving us badly. They are letting us down. We all used to believe that the banks gave us great benefits in terms of the balance of payments. We believed that we gained great benefit from the City and its invisible exports. We were all in awe of the City. We are no longer. The City and its short-termism is perhaps the major cause of our problems. It makes one appalling mistake after another with our money.

For example, when the Reichmann brothers got off the aeroplane, the banks immediately offered them bundles and bundles of used fivers and tenners. Now the firm has gone bust. The same thing happened with Maxwell. A Department of Trade and Industry report said that he was not a fit man to run a company. Yet the banks of this country fell over themselves to give him large loans. Did not they understand what sort of man they were dealing with? Did they know what day of the week it was?

The banks took the pension assets as collateral. Were they naive? Were they born yesterday? Did the banks, the people whom we have always been told to look up to, have the slightest clue what they were doing? They got it madly wrong. If the banks got it madly wrong, it is down to them.

Column 233

It is their fault. They are now in possession of stolen property. They have the pension assets which were stolen. What do other people do when they have stolen property? If you or I had stolen property, Mr. Deputy Speaker, what would we have to do? We must say that Parliament expects the banks to hand back that stolen property. Yesterday, both Opposition and Conservative Members and in particular the hon. Member for Horsham (Sir P. Hordern) made that point. The second matter that my old workmates, the Maxwell pensioners, drew to my attention was that the Maxwell empire appears to be bust, as it has no money to pay them. In that case, they ask, how can the Maxwell family have ㎏uch a lavish, millionaire lifestyle? Someone said that the Maxwell brothers are allowed £1,600 per week--I had thought that it was £1,500. We have heard about their large and expensive houses. I have been asked how that is possible or justifiable if there is no money. I do not know. Perhaps we shall find out this evening.

Maxwell was not alone--it was not possible for one man to commit such crimes--but was aided and abetted by many professional people in the City and elsewhere. What about the law? I have been asked whether it is legal to do that sort of thing. What will happen to all those people who aided and abetted him? Why have there been no prosecutions and no convictions? Why have all the crooks and criminals so far gone scot-free?

The Maxwell brothers did not answer the questions when they were brought before the Select Committee. Their expensive lawyers said that they did not answer because they were liable to prosecution, but where are the prosecutions? There have not been any. Why not? If there are not to be any, the brothers should be brought back before the Select Committee and the House so that we can deal with them. The last question that my old workmates asked me concerns the regulatory structure. They think that they live in a law-governed society. They asked how it could happen. We have laws and regulatory authorities, but it is clear that those authorities have proved totally inadequate.

The Department of Trade and Industry issued a licence, under the Prevention of Fraud (Investments) Act 1958, to London and Bishopsgate Investments' management--a Maxwell company--on 26 April 1988. It is true that Robert Maxwell was not originally a director, but Kevin Maxwell was and everybody knew it. Could the DTI not have put two and two together? Is that asking too much? Did it not understand that Kevin Maxwell did everything that his father told him and was not an independent person? Why did the DTI not look into a company in which Kevin Maxwell was a director? Three days later, on 29 April, IMRO, gave its approval and shortly after Robert Maxwell lent his name to the company.

The sole purpose of London and Bishopsgate Investments and its sister company was to divert £500 million of pension money into untouchable Liechtenstein accounts--to rob the pension funds of their money.

What is the truth that the House must cope with and explain to the pensioners? The DTI and IMRO granted a licence to plunder and pillage the pension funds of thousands of innocent people. The authorities were culpable and negligent and the pensioners were victims not only of fraud but of the official regulatory bodies which failed to protect them. The analogy has been made with Barlow Clowes. It was explained in that case that the

Column 234

authorities were negligent, and the Government put up £160 million to rescue them, although investors in that company knowingly invested offshore for a higher dividend and were taking a risk. The pensioners in the Maxwell empire took no risks. They were honourable and innocent. They were the misused victims of negligence and crime. Whoever should pay, it should not be the pensioners.

After many months, the Government--at long last, tardily, reluctantly, as a result of the pressure of the lobby that we saw yesterday and this debate-- have accepted some responsibility. They have realised that they cannot pass by on the other side, but their promise of £2.5 million is inadequate. The fears and the worries of the pensioners whom I met yesterday have not been assuaged. The Government should underwrite the pensions. They should ensure that pensioners get 100 per cent. of that to which they are entitled. However, this should not be achieved solely through the use of taxpayers' money. They should get the cash from the Maxwell companies, from the banks and from the £300 billion-rich pension industry, all of which ought to pick up the tab. There should be some convictions. People should be punished for these crimes, which were committed by others besides Maxwell. What the Government have done so far is inadequate.

9.21 pm

Mr. Mark Wolfson (Sevenoaks) : I shall be brief because I know that others wish to contribute to the debate, but I must begin by adding to the congratulations on the two maiden speeches, which were first class both in brevity, bearing in mind the pressure of the debate, and in substance. I was particularly pleased to hear my hon. Friend the Member for Hertfordshire, North (Mr. Heald) refer to his predecessor, Sir Ian Stewart, as he was a good friend of mine. As my hon. Friend said, he has a good reputation to maintain.

We are debating an exceptional fraud. Maxwell appeared as a character larger than life to all who knew him and to all who knew of him. In death he has turned out to be a criminal of quite staggering proportions, a man without scruple, determined to the end to get his own way whatever the cost to anyone else.

The members of his family still have the opportunity to recover something of their shattered reputation by co-operating with the investigation to recover the stolen assets of these pension funds. They should do so now. The country has had enough of their blocking tactics, and so has Parliament. As many hon. Members have said in this debate tonight, we must also take into account the advisers to the Maxwells and the many others who were involved and should be assisting in the restitution of these funds, instead of keeping their heads down and avoiding the difficulties that they should face. I have a number of Maxwell pensioners in my constituency and I speak for them today, but I have a broader interest in the good standing of all company pension funds and the good name of the City of London, where I worked in the personnel field for many years. Employers usually have no option but to contribute to their company funds and all of us would regard a company's contributions to its employees' pension funds as part of a total earnings package, part of the contract of employment. That is exactly what it is.

Column 235

No reasonable person can possibly disagree with the contention that the Maxwell pensioners are the innocent victims of a massive fraud and if ever individuals deserved to have a wrong fully righted, it is these men and women. Righting of the wrong must involve several sources--all have a part to play.

I welcome the Government's initiative. It is essential, it is timely and it deals with the immediate difficulties. Yesterday my right hon. Friend gave the news to the House in the expectation that--he confirmed this today--it would meet the immediate needs of all pensioners. If it does not meet that expectation, I must tell my right hon. and hon. Friends on the Front Bench that many hon. Members from both sides of the House will ask for more. As of now, I am satisfied with the action as a first step.

The hon. Member for Oldham, West (Mr. Meacher) said yesterday that the amount provided was derisory, but I cannot agree with that. He was considering the sum against the total figure, not against the immediate needs that it is designed to meet. The Secretary of State has confirmed today, in a key phrase, that the objective of the immediate rescue package is that the funds should be able to resume or maintain payment to their members.

I also welcome the decision to set up a special unit. However, will the number and quality of people working in that unit be adequate? Will they have the necessary clout to give Government weight to solving and investigating the problems? They will be dealing with many heavyweight people, who will not readily forward the information that they should. Therefore, it is important that the unit has strong personnel.

I agree with the point that has been made many times in the debate that those banks--we must not include all banks in such

strictures--that lent to Maxwell against the assets of his pension funds have a clear moral, as well as a legal, obligation. Further to the moral obligation, I pick up the point made by the hon. Member for Gordon (Mr. Bruce) who focused on the business standing of those banks. Surely good banking judgment is about making sure that the assets against which one lends are sound. In the Maxwell case, the assets have been found not only to be unsound, but stolen. Therefore, the banks involved remain as shining examples of bad bankers to all the world. It is in those banks' interests to return the funds as rapidly as possible. We look to them to take that action. I believe that it is absolutely proper for the Secretary of State to set up a fund to accept contributions to help deal with the problem of the pensioners. I look to the pension industry, which has no insurance system at this stage, to give serious consideration to whether it should ensure its future standing and the sense of security of members of pension funds all over Britain by making some contribution to meet the shortfall.

Certainly, the review of pension schemes is essential. I do not disagree with the time limit of a year. We always knew that, whenever such a review took place, it would be complicated and would require a great amount of consultation. However, the review should take no longer than a year. I welcome the statement of the Secretary of State today that he will act upon some of the urgent recommendations that may be part of the review before the end of that year.

Column 236

We live in a capitalist society. The takeover of companies always causes major worries for their employees. The Maxwell example has shown that a takeover can put the soundest of pension schemes at extreme risk. Therefore, the whole business of takeovers, when linked to that type of example, is put into a bad light. So the City as a whole--the regulatory bodies, the Bank of England, the banks involved and the pensions industry--has a strong moral obligation as well as self- interest to see the Maxwell pensioners right in the long term. 9.30 pm

Mr. Ian McCartney (Makerfield) : I am grateful for this opportunity to take part in the debate, and I promise not to exceed the time allocated for speeches. As a member of the Select Committee on Social Security in the last Parliament, I shall make only a few points and not go over those made by other hon. Members. If the House is seized of the matters which deserve urgent action, some early decisions must be taken.

I congratulate the occupants of the Opposition Front Bench, because without the motion the Government would not have provided time to debate this and interrelated issues. The Government should have agreed some time ago, because of the seriousness of the matter, to provide time for a wide- ranging debate. It should not have been left to the Opposition to find time for what must be inadequate consideration of this important matter.

The Secretary of State paid credit yesterday and today to the work of the Select Committee. I do not say that just because I was a member of it. Members of the Committee from both sides agreed when we discussed the case that our recommendations would be driven by the evidence that we collated, and by no other means. So our recommendations present the Government with an ideal method of dealing with the issue in the short and long term.

The Government business managers should give a clear assurance at business questions this week that time will be provided before the summer recess to debate the Select Committee's report. It contains five pages of recommendations, yet the Secretary of State has to date accepted only one recommendation. If he is really serious about doing something over the scandal, for the pensions industry and for the future security of pensioners, he will ensure that the House has ample opportunity to debate those five pages of recommendations. Both Front Benches must give urgent consideration to the fact that the Select Committee on Social Security will not be re-established before the summer recess. Only by reconstituting it will there be adequate opportunity to debate all the issues. If its

re-establishment is delayed until the autumn, it will take until March of next year before the Committee continues to deal with the issues that were before it prior to the general election. That is an unsatisfactory state of affairs, and the business managers on both sides must explain why the appropriate orders for the establishment of the Select Committee have not been laid before the House. It is not good enough to say that it must wait until after the shadow Cabinet election or other matters relating to Opposition business have been settled. The work of the Select Committee is too important to be left to the indecision of business managers. I hope that, without delay, orders will be placed before the House to enable the Committee to start its work before the summer recess.

Column 237

Mr. David Shaw rose --

Mr. McCartney : I will not give way because I have only a few minutes in which to speak. I hope that the hon. Gentleman will have ample opportunity to speak on the subject in the Select Committee before the summer recess.

I have a suggestion for the Government if they think that my hon. Friend the Member for Oldham, West (Mr. Meacher) was churlish in his remarks about their lifebelt proposals. There was almost unanimous support from both sides of the House for the principle set out in the Minister's statement. I am not prepared to say something in private to the Select Committee and then stand on the Back Benches in public and say something different. The concepts contained in the Minister's statement yesterday were the very concepts that were unanimously agreed by the Select Committee. I stand by that.

However, doubt is being expressed both inside and outside the House about the adequacy of the proposals. So far, the debate has shown good will to the Select Committee and the all-party group, and I suggest that arrangements are made for regular contact between both Front Benches and the all-party group to take cognisance of whether it will be necessary at some stage to provide further resources. The Minister could then have no objection to the involvement of the Opposition Front Bench in considering the adequacy of the proposals put forward yesterday.

Mr. Alan Simpson (Nottingham, South) : Does my hon. Friend agree with me that the Government's offer yesterday was regarded as derisory because it amounted to little more than the loan of "half a Gazza" when Maxwell pensioners' demands were for the whole of the Lazio team? Many of the Maxwell pensioners see the only prospect of getting those funds through the strategy set down in the early-day motion that I submitted today, which asks the Government

"to use its full powers of sequestration against the banks, investment institutions, individuals and foreign-based companies to recover all the monies stolen from the Maxwell pensioners". If the Government would not hesitate to do so against the miners in 1984, they should not hesitate to do so against the bankers today.

Mr. McCartney : My hon. Friend makes a powerful point. That is why I have been arguing that the House should make time to debate the consequences of the Select Committee report and should make regulations to allow that Committee's work to continue. Before the general election we were considering how we could provide for the return of the assets and deal with the difficulties of international law in returning assets from Liechtenstein and other places. The Select Committee must be allowed to continue that work.

The hon. Member for Dover (Mr. Shaw) was being rather kind, to say the least, to those who came before the Select Committee for IMRO. In reality, they were totally inadequate for the job that they were trying to perform. Moreover, they were inexperienced in the role and work of the City. What was wrong was the self-regulatory basis of IMRO, which was ill-prepared and unprepared to take action at the outset in respect of the Maxwell companies. Had they taken that action, many of the problems that have arisen as a result of the loss of hundreds of millions of pounds of assets would not have arisen.

Column 238

The Government should, at an early stage, make it clear what Professor Goode has been asked to do in respect of self- regulation. Will his committee look at the wider aspect of the role of IMRO and at whether, under the new arrangements for his committee, the Occupational Pensions Board is adequate to cope with the increasing demands in that growing sector of financial institutions in the City ?

Mr. John Gunnell (Morley and Leeds, South) : Does my hon. Friend accept that the IMRO regulations provide for directors of IMRO companies to supply a quarterly return, which they must sign, saying that they know of no failure under the regulations and nothing that could give rise to or constitute a complaint from any customer? As all the directors of IMRO companies, of which I am one, must sign such a document, and as it is filled in every quarter, is it not clear that all the directors of IMRO companies have been signing such documents apparently unaware of the theft from the funds? Does not that mean that self-regulation has failed dismally and that those company directors have been prepared to sign, knowingly or unknowingly? May I show a Christmas card that Robert Maxwell--

Madam Speaker : Order. Let me try to help the hon. Member for Morley and Leeds, South (Mr. Gunnell). An intervention must be precise, particularly at this time of the evening when we are waiting for the wind- up speeches.

Mr. Gunnell : My apologies, Madam Speaker, but I thought that the card was a precise example of hypocrisy on a major scale.

Mr. McCartney : My hon. Friend the Member for Morley and Leeds, South (Mr. Gunnell) had me there, and I shall keep a close eye on him in future debates. His suggestion to look at the Select Committee report and what it says about IMRO is valid.

I want a commitment from both the Labour and the Government Front-Bench teams that they will initiate, in Government time, a debate on the Social Security Committee's report and regulations and will set up a Select Committee before the summer recess.

9.41 pm

Ms. Marjorie Mowlam (Redcar) : I congratulate the two hon. Members who made excellent maiden speeches. The hon. Member for Hertfordshire, North (Mr. Heald) gave a clear and precise presentation that demonstrated his barrister background. Having listened to his maiden speech, I think that his experience of Speakers' corner will come in useful, as he will not be heard in as much silence as he was today. My hon. Friend the Member for Rossendale and Darwen (Ms. Anderson) gave a clear, fluent, committed speech. As many of us know, she has worked hard for many Members of Parliament and for the Labour party behind the scenes for many years. We are pleased to see her here in her own right ; our party's loss is her constituents' gain. In view of the time left, I shall briefly pick up on a number of issues raised, starting with one mentioned by the Secretary of State. He said that he was convinced that his proposals had been welcomed by a wide spectrum of opinion outside the House. Let us consider the response of some of the action groups to his comments.

The Maxwell pensioners action group said :

Column 239

"It's a long way short of what we want, and we shall campaign on." The BIH pensioners action committee said :

"The £2.5 million was a little like a student loan ie. giving a little to people with nothing--hoping they would be repaid in the future."

The MCC works plan said that it was

"A step up the ladder, a scratch on the surface."

It is worried about the frequency with which the Secretary of State used the word "may". Therefore, to say that the proposals were greeted with overwhelming approval is a slight overstatement. I wish to concentrate on the issue on which the Secretary of State laid stress : the special unit that he has set up in his Department, and the trust fund designed to encourage City institutions to contribute to the Maxwell pensioners' funds. He said a number of times, both yesterday and today, that the long-term problems could be solved only if assets were unfrozen and other contributions were made. He said that he was waiting to see how the institutions in the City of London reacted to their moral conscience.

I tried to help the Secretary of State this afternoon by phoning around as many financial institutions in the City as I could to find out where they stood on the issue. I am pleased to be able to help him with a number of comments from those institutions. The chairman of one of the clearing banks said :

"The failure in the system is the failure to control a government-regulated company--Bishopsgate. As far as we know--no stolen shares passed through our hands--we find the suggestion of a moral obligation to pay worrying. A way has to be found to recompense the pensioners, but for us, charity begins at home."

The chairman of another clearing bank said :

"We are squeaky clean on Maxwell".

When asked about whether he would contribute to the Secretary of State's fund, the chairman said :

"That's going a bit far. I don't think my shareholders would appreciate that."

The National Association of Pension Funds, an organisation which represents many pension funds throughout the country, states that it has no money and does not believe that it should contribute. When asked whether it would advise pension fund members to contribute at its council meeting tomorrow, its representatives said that it did not consider that relevant. The Secretary of State must be aware that it would be ultra vires, in terms of the fiduciary principle, for many pension schemes to contribute to his pension fund.

The Secretary of State has not received a positive response from European and American banks that hold collateral linked to the Maxwell pensioners. When asked whether it would contribute, Shearson Lehman representatives said :

"We entered into transactions in good faith. We intend to pursue our own position in the courts."

Most of the other banks were not willing to talk about conscience. Banque Nationale de Paris had no comment and Credit Suisse and Swiss Volksbank were unable under Swiss law to make any statement. I spoke to people in Goldman Sachs and other banks in the United States. Those bankers consider themselves to be people of good will, but they do not consider a statement in support of the trust fund to be of any value. One of them said :

Column 240

"I don't know what kind of show you are running over there. Every time the Government runs into a regulatory problem they come round the City with a begging bowl."

We accept that the banks have a responsibility and we would like to see them contribute. How do the Government propose to bring alive the small conscience in the City institutions?

Mr. Lilley rose --

Ms. Mowlam : The Secretary of State had a good session. There will be plenty of time to sum up and the right hon. Gentleman can confer with his colleague. I will not give way. The Minister can share his view with his colleague who can present it in winding up. The hon. Members for Gordon (Mr. Bruce) and for Sevenoaks (Mr. Wolfson) spoke about the future of the City of London. If the European federal bank comes to London, will it have to worry about the begging bowl every time there is a problem? I agree with the hon. Member for Sevenoaks that we must consider that serious problem. The Secretary of State generously acknowledged that the Select Committee and the all-party group had been crucial in helping him to reach his decision. It would have been helpful if he had said that the idea for this kind of fund had been circulating in the City for many weeks and openly discussed. As I am sure he knows from the report in yesterday's issue of The Independent, the National Westminster bank has been discussing for some time what it calls a men of good will fund--to which we shall not have to contribute--to help pensioners in great distress until the legal question about a call on shares is answered. The head of the bank's risk department has been exploring avenues for some time in trying to respond to the problem, and the National Westminster felt fairly aggrieved when the Secretary of State found out and decided to pre-empt the scheme. The Secretary of State said several times that he wanted to put Maxwell pensioners' minds at rest and then made contradictory statements. When asked by the hon. Member for Leeds, North-West (Dr. Hampson) about retrospective payments for members of the Headington pension fund, the Secretary of State said that he would have to come back to the hon. Gentleman. But in answer to the hon. Member for Bedfordshire, South-West (Mr. Madel) the Secretary of State gave a 100 per cent. guarantee about all the pensioners in that scheme. That can be checked in tomorow's Hansard.

In response to my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson), who asked about AGB pensioners, the Secretary of State gave no guarantee and no straight answer. The right hon. Gentleman's statements have not created the peace of mind that he and the Opposition are eager to welcome. In many ways, he has done the opposite. As my hon. Friend the Member for Oldham, West (Mr. Meacher) made clear, we welcome the changes to section 58B of the Social Security Act 1990. As the Minister made clear, that will make the Maxwell pensioners unsecured creditors. We must be straight with the Maxwell pensioners and tell them that, as unsecured creditors, they will be similar to other trading partners and will receive very little, if any, money from the liquidation.

The Secretary of State was asked yesterday when he would introduce the social security changes and he said, "I shall do that at an early date." What did he mean? When he was Secretary of State for Trade and Industry he could

Column 241

have set up the inquiry into MGN, but we had to wait for the present Secretary of State to announce that inquiry. Understandably we have some doubt about the right hon. Gentleman's ability to act quickly on announcements.

One would have thought that the problem over the Maxwell pensioners would have stimulated the Government into responding to weaknesses in the regulatory regime. Many hon. Members have spoken about that. I hope that that issue, which relates to the Treasury, will be answered in the winding- up speech. The Government have said that they will not respond to the issue other than through the review of pension legislation. Hon. Members have spoken about IMRO, international controls and Liechtenstein. All those matters deserve an international response. Yesterday, the Chancellor of the Exchequer issued a press release on the Treasury taking over responsibility for the Financial Services Act 1986. It said that for the time being "No changes are proposed in the way financial services are to be regulated."

We have £270 million in Liechtenstein and it would be useful if that was returned. After the events at the Bank of Credit and Commerce International and following other procedures, it would be useful if the Government acknowledged that it would be helpful to have an international response. Perhaps the Minister will mention that today.

Similarly, there is a report on IMRO on the desk of the Secretary of State for Trade and Industry. The report states that in future IMRO should move to a one wholesale and one retail regulator. That report has been on his desk for some months, but there has been no response to the weaknesses at IMRO. I hope that the Minister will accept that that report suggests changes and that it is something to which the Government could respond. That would be better than the Chancellor's statement that no action is to be taken.

The position of the Maxwell pensioners is pitiable. Although we welcome the Government's response, it is insufficient and we are worried that in the months ahead the Maxwell pensioners will suffer as a result of the Government's weakness.

9.51 pm

The Economic Secretary to the Treasury (Mr. Anthony Nelson) : During this debate the House has spoken with one voice about the plight of the Maxwell pensioners. Nobody listening to the debate could go away unaware of the great sympathy that has been expressed by all hon. Members who have contributed and those who have tried to contribute. I hope that they will have other opportunities to express their views.

One aspect of the plight of Maxwell pensioners that has been given insufficient attention is the uncertainty involved. They are worried not just about the amount of money involved but about when and whether they will get it. For many elderly people of limited means and with an expected standard of life, that uncertainty keeps them awake at night and visits a particular sort of distress upon them. I am aware of that and it is the Government's awareness of that which led to the proposal that my right hon. Friend the Secretary of State made yesterday and again today. In the short time available, I shall do my best to acknowledge and respond to the many contributions that have been made.

Column 242

I, too, congratulate my hon. Friend the Member for Hertfordshire, North (Mr. Heald) on an outstanding maiden speech in the great tradition of the House. He spoke with warmth about his predecessor, Sir Ian Stewart, whom we all remember with gratitude and admiration. He mentioned the plight of his AGB pensioner constituents and I took that on board. They will be among those whom it is intended will benefit from this package of measures. He made some interesting points about the remit of the review. He proposed that consideration should be given to a register of assets and that perhaps a compensation scheme was needed. He and other hon. Members rightly pointed out that 12 months is probably an adequate period given that the Government will come forward sooner if more immediate measures are needed. We must remember that we are dealing with an enormous number of beneficiaries of occupational pension schemes and it is important that we get it right.

When in the past the House has looked at the problems in pensions, insurance, investments and banking, time and again we have looked at the deficiencies of past legislation and the latest incidence of collapse. What we must try to do--it is more difficult--is look forward to the next problem that might arise. We should spend more time trying to secure the horses in their stable than locking the doors of those that have already bolted. As I have said, that is difficult, but it will take the time and attention of the review.

My hon. Friend the Member for Cheadle (Mr. Day) supported the amendment, for which I am grateful. He deplored the party-political stance of the hon. Member for Oldham, West (Mr. Meacher), who, I agree, introduced an unnecessary partisan approach.

The hon. Member for Gordon (Mr. Bruce) welcomed the review and asked, rightly, how funds could be diverted so badly. The review must consider that, and the banks and City institutions must contribute to the trust fund that has been set up.

The hon. Member for Gordon and others referred to the problem of British International Helicopters Limited scheme members. To date, all pensions have been paid in full and will be until the end of July. Money is available to pay after July, and the unit will discuss with trustees how to continue pensions in the short term. I congratulate the hon. Member for Rossendale and Darwen (Ms. Anderson) on an outstanding maiden speech. She spoke warmly about our colleague, Sir David Trippier, whom we miss very much, but we welcome her to the House. I was impressed by her comments about textile workers, whom I know something about. She mentioned the problems and concern of her constituents who are affected by the Maxwell collapses and called for an assessment--this is an important point--of trust law and pension law. That was considered by the professor to whom she referred, but I did not draw the same conclusions from the report as her. She spelt out the case for a statutory compensation scheme. My hon. Friends the Members for Dover (Mr. Shaw) and for Leeds, North-West (Dr. Hampson) spoke about Headington. It is intended that the package of £2.5 million will restore payments, including the May and June payments, about which my hon. Friend the Member for Leeds, West asked. The trustees must decide how to allocate resources, but he asked whether, in assessing the

Column 243

sum liable to be paid, they included an assessment for back payments of sums due. The answer is that we intend, as far as possible, that they should.

My hon. Friend the Member for Dover also spoke about the problems of getting assets out of Liechtenstein. I share his frustration, but there is a limited amount that one can do to make another sovereign state disgorge assets. However, there is a prospect that, under the Basle negotiations on international banking regulation, countries that do not subscribe to international standards of banking prudence may have authorisation withdrawn for subsidiaries or branches in particular countries, so some pressure could be brought to bear in that way. He asked for a tougher line to be taken, and I am sure that that will be noted.

The hon. Member for Newham, North-East (Mr. Leighton) asked whether the banks knew with whom they were dealing and referred to the 1971 Department of Trade and Industry report. Many of them must have known, although with the benefit of hindsight it is easy to be critical. He asked whether the Maxwells will be prosecuted. That is a matter for the Serious Fraud Office. The assets are a matter for the liquidators, who are investigating. He said that the Department of Trade and Industry should not have licensed LBI, but under the Prevention of Fraud (Investments) Act 1958 it was extremely difficult for it to be denied approval, even for those few days.

My hon. Friend the Member for Sevenoaks (Mr. Wolfson) welcomed the assurances that have been given, but said that if funds proved inadequate he and the House would be back for more. We hope that they will be adequate. I assure him that the manning of the unit will be adequate. We shall ensure that it is staffed with people who are thoroughly able to do the job. I noted what he said about pension funds and banks contributing to the trust that has been set up. The hon. Member for Makerfield (Mr. McCartney) referred to the report of the Select Committee on Social Security. I pay tribute to its work. Its central recommendation was that there should be a review, and that recommendation has been accepted in full. I believe that there were about 60 recommendations, six of which were implemented immediately. It is the Government's intention to respond formally to the Select Committee by the end of this month. The hon. Gentleman criticised IMRO and asked whether it was competent, but that is a matter for SIB.

Finally, the hon. Member for Redcar (Ms. Mowlam) did not get much change out of the City, which is hardly surprising--it is hardly likely to say to her, "What a good idea. I'll certainly put £5 million into the kitty." These issues are very sensitive. [Interruption.] Well, it is not going to say that. I predict that we shall have a much better success rate.

Mr. Derek Foster (Bishop Auckland) rose in his place, and claimed to move , That the Question be now put.

Question , That the Question be now put, put and agreed to . Question put accordingly , That the original words stand part of the Question :--

The House divided : Ayes 262, Noes 315.

Next Section

Home Page