House of Commons Hansard Debates for 8 Jul 1993

Mr. Harry Barnes (Derbyshire, North-East) : Some of us were privileged to hear in the House my hon. Friend the Member for Tottenham (Mr. Grant) describe the plight of two of his constituents, the London taxi drivers whose taxis were turned into living bombs, and their brave and public-spirited action. Some of us are very concerned that the right people should be convicted for those offences.

According to the magistrate in the case of John Matthews, there has been no stain on his character. However, the Home Secretary then immediately placed a massive stain on his character. That assassination of character is very worrying. Indeed, even more dangerous might be the assassination of John Matthews himself, as the Home Secretary may have pointed the finger at him so that Protestant paramilitaries might take action against him. The Home Secretary should come to the House to answer questions on this very serious subject that affects an individual's civil liberties.

Mr. Newton : I make no complaint about the fact that the hon. Gentleman has felt it right to raise that matter again. However, quite clearly, I cannot add to what I have already said on two previous occasions.

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ESTIMATES DAY

[3 rd Allotted Day

]

ESTIMATES AND SUPPLEMENTARY ESTIMATES, 1993-94

Class XIII, Vote 4

Department of Social Security

Pensions

[Relevant document : First Report from the Social Security Committee of Session 1992-93 on The Operation of Pension Funds : The Recovery of Assets (House of Commons Paper No. 189)]

Motion made, and Question proposed,

That a further sum, not exceeding £1,505,632,000, and including a Supplementary Sum of £810,000, be granted to Her Majesty out of the Consolidated Fund to defray the charges that will come in course of payment during the year ending on 31st March 1994 for expenditure by the Department of Social Security on administration, for agency payments, and for certain other services including grants to local authorities and voluntary organisations.-- [Mr. Hague.]

4.56 pm

Mr. Frank Field (Birkenhead) : It is a pleasure to open this afternoon's debate on a vote that takes note of a report by the Select Committee on Social Security and which draws attention to the grants in aid to the occupational pensions advisory service and to the Maxwell pensioners' trust.

I begin the debate by putting on record the Select Committee's thanks to a number of individuals and organisations. When the Committee began what is now turning out to be a mammoth task, considering the ownership and control of Britain's occupational pensions schemes, we were blessed--I use that word advisedly--by the services of Philip Chappell as one of our specialist advisers. Some months ago, Philip Chappell died after bravely trying to ward off brain cancer. While that death was a total blow to his family, it was also a severe knock to radical forces in this country.

Some hon. Members will be aware that Philip Chappell and Lord Vinson formulated a number of very important radical ideas about why and how individuals should own their own pension funds. Those ideas stemmed from those two individuals. Philip was not only a most courteous and careful attender of our Select Committee gatherings ; there was about him a boyish enthusiasm for ideas which endeared him to each and every member of the Committee on both sides of the table--if I may use that phrase. When one met Philip, one stretched across to meet him because his moral earnestness was totally attractive.

There is a sadness about our debate today as we have lost a great radical champion on pensions and capital ownership in this country. As my grandmother would say, "Dark clouds have silver linings." The Committee has similarly been blessed by an initiative of the National Audit Office which has allowed us to have seconded to the Committee one of its staff--Mr. Jonathan Cable.

All members of the Committee would wish me to say that the quality of our work in this area and related areas is very much determined by the high standards that Jonathan brings to his work. He does that in conjunction

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with our new special adviser, Peter Mills. The Committee is thankful to both those people as it is to the House of Commons Library for the care and diligence that it shows us when answering our inquiries.

I begin one part of the debate by recapping for the House the reports of the Select Committee and the work that it has undertaken, not merely in the field of the ownership of pension funds, but specifically relating to the plight of the Maxwell pensioners. Some hon. Members were not in the House when we made our first report on the theft by Maxwell of much of the pension fund.

Following the publication of that report, the Government responded very quickly to one of our main proposals, which was to establish the Goode committee. This will report in late September. If it does not report on the key question of the ownership and control of pension funds, that will be seen by many of us to be a cop-out and the loss of a great deal of parliamentary time. I hope that that initial report helped to sharpen and focus the debate that has ensued. Secondly, the Select Committee reported two persons to the House for contempt. It is not advisable to dwell on that report for contempt now. I merely wish to record that at some stage the Select Committee, which has a long memory, will wish it to be debated in the House.

Thirdly, the Select Committee has already reported on the recovery process. It said that that was an initial report and part of today's debate is about it. Shortly, however, we shall be making a much more major contribution to the study of the recovery process, when we will look at three of the four agents deputised for the task of recovering both assets which were stolen and assets which were misappropriated or are in disarray as a result of Robert Maxwell's behaviour, and then his death.

It is true to say that, while we have rightly been concerned with the Maxwell pensioners, and it has been totally proper for the Select Committee to put them at the centre of its consideration--indeed, they have looked to the Select Committee to champion their cause--the Committee has not been concerned only with their plight. We have tried to use what has happened to those tens of thousands of people as a barium meal is used for an X-ray ; we have been concerned to draw out the weaknesses of occupational pensions, to enliven and inform the debate, and to draw general policy conclusions from our considerations, not being concerned only--I emphasise the word only--with the Maxwell pensioners, important though they are. I turn now to what the Government have done in this area. I hope that I do not embarrass the Under-Secretary--whom I welcome for the first time in this debate to his post on the Treasury Bench--by going through the various moves that the Government have accomplished. First, very soon after the extent of this awful theft became apparent, the Government agreed to drip-feed the pension funds to ensure that pensions were paid. The Government are to be congratulated on that and on using taxpayers' money--not their money--to good effect. That initial sum has already been spent. The second move made by the Government to help to minimise the horror of this enormous theft of pension funds was, in effect, to give the pension funds a loan of £100 million or so, which the Government have every right to call in now, to underwrite the guaranteed minimum pension under the relevant social security Act. So they are to be congratulated on that.

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Next, they deserve congratulation on setting up the Maxwell pension units and, above all, on appointing Sir John Cuckney to an overseeing job in this whole area. Our friends who sit elsewhere in this Chamber have been slow to wake up to the importance of this initiative. When we look at the initiative that the Government have taken in trying to combine public responsibility and private initiative, the Maxwell pension units and the role of Sir John Cuckney will, I believe, be at the forefront of the debate.

I am sure that the whole House joins me in emphasising the thanks that I now pay publicly to Sir John for the work that he does and the skill that he brings to that task. He is a public servant of considerable distinction. Many Maxwell pensioners are particularly grateful to him, because it is from the trust fund that he established that they are now being paid their weekly or monthly pensions.

The next reason for which we have to record thanks to the Government is that, through the initiative of Sir John Cuckney, we now have in place Sir Peter Webster, a retired High Court judge, who is attempting to build up some expertise in the area of mediation in this country. It is fair to say that he is probably the first person of that standing to attempt such a task and our thanks go to him. Next, the Government have established the Goode committee, and we await patiently, but anxiously, its findings, due in September this year.

Lastly, the Government have taken the initiative, through the Board of Trade, to investigate the Mirror group prospectus. The Select Committee believes that that has very important repercussions for many of the pensioners.

I shall end by calling for some Government action, but it is right and proper that, in looking at this today, we should record what the Government have done. I shall watch with considerable interest how schizophrenic the Under-Secretary is when he comments on the Government's record. He knows that, if he is too boastful about what the Government have done, he will clearly be committing them to an interventionist line, from which they have tried to shield themselves. So I am sure that we shall have that pleasure before too many hours have passed.

There are two topics on which I shall not comment, because I am anxious that every hon. Member who has played a part in previous debates and in the Select Committee should have a chance to speak. The first is the cost of the recovery process. It will probably reach something like £50 million before the task is finished, which is a ginormous sum. I will not dwell on it, because I know that my hon. Friend the Member for Liverpool, Broadgreen (Mrs. Kennedy), who hopes to catch your eye, Mr. Deputy Speaker, intends to concentrate on that aspect. The second area of real concern relates to the two pensioner groups that have been left out in the cold. I guess that the hon. Member for Dover (Mr. Shaw) will be dealing with that. I will end by looking at the actions that we now want the Government to take, or not to take.

The first crucial necessity is that pressure is kept up on the main players in the Maxwell saga so that it is brought to an end as quickly as possible. There are a number of ways in which we as Members can help--by having debates such as we are having today, the work that the Select Committee can do, the statements that Ministers and Opposition spokespersons can make in their

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contributions to these debates, and the comments that Ministers can make both throughout the country and in letters that are published. It is essential that none of the main players--whether it be those who are, in a sense, in the dock for playing a part in the theft of these assets, or those committed by the courts to the recovery of the assets--believes that they can relax, sit back and take their time, because the patience of the pensioners is clearly ruf the common investment fund. As I expected, the hon. Member for Hertfordshire, South-West (Mr. Page) is in his place. Given that he has given the parties to the common investment fund such a good old shaking in the past, and a justifiable one, I need not dwell too long on that. I leave the common investment fund and its main participants to his gentle but firm boot.

Thirdly, I hope that we are not going to hear today that the Government should call a halt to the whole proceedings and shovel out large sums of taxpayers' money. There is something that the Government can do, but I am not in favour of their taking over the entire deficit and suggesting that the taxpayer should meet the total cost.

The recovery process is in operation and other forces are at work to gather funds for the depleted pension funds. However, I believe that, in the near future, the Government should make a statement on what they believe to be the likely shortfall when the whole process has been concluded, which may not be for three or four years, and at that stage to suggest how they envisage that sum being made up. Some of us noted that the Securities and Investments Board recently fined Invesco MIM £750,000 for malpractices over its stewardship of some of the Maxwell pension funds. I hope that the Government will be asking the SIB to pay that fine, and other fines that we shall hear about shortly which will make £750,000 mere chicken feed, and that those funds will be paid into the Maxwell pension funds to help rebuild the capital stock.

I hope that the Government will judge the situation carefully and, if they consider that it would be useful to bring the parties together soon, to suggest a round table meeting. There will be three parties to that round table meeting.

Thanks to the hon. Member for Hertfordshire, South-West and others, the Government need not concern themselves too much with the distribution of the common investment fund. The money is there ; the question is when the assets are realised and how they are distributed. I am sure that the process will take its natural course.

There is also the disputed ownership of some assets. Sadly, it is now clear that those disputes will probably end in the courts, will cost a great deal of money in legal fees and, at the end of the day, will be settled. I hope that rightful restitution will ensue from that activity and that the assets will be returned to Maxwell pension fund holders.

There is another matter on which the Government may be able to act. There are already some writs out, but there will be many more on those City institutions which were

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only too willing to work with Robert Maxwell and take his fees. Some of them are grand institutions, and I am sure that they now wish that Mr. Maxwell had never crossed their path.

They know perfectly well that, if matters are not settled, they will be dragged through the courts and that process will be time-consuming and immensely expensive. Their professional reputations will suffer and some may be fatally flawed as a result of those cases. At some stage soon they may well have an interest in settling, and I hope the Government will keep a watching brief so that, when the minds of those people are concentrated-- as Doctor Johnson said, being hanged in the morning concentrates the mind wonderfully, and so does losing one's professional reputation--the Government will act swiftly to bring the parties together. When they know what the shortfall will be, the Government may consider what small, modest contribution the taxpayer should make, but they should suggest to those professional bodies that the time has come for them to contribute and make good whatever shortfall there is when the recovery process and the legal proceedings have been completed.

I end as I began, by underlining our commitment to the Maxwell pensioners.

Mr. David Porter (Waveney) : The hon. Gentleman will recall that I was briefly a member of the Select Committee in the last Parliament. May I ask him just two questions? First, will the Committee keep a watching eye on Maxwell victims who are part of British International Helicopters and who had a particular problem which made them different from other Maxwell victims?

Secondly, in its first report, the Committee suggested that, if the Government did not produce a Bill on occupational pensions, the Committee itself might do so. Is that still the hon. Gentleman's intention?

Mr. Field : I hope that, following the Goode committee, the Government will bring forward its most radical proposals. If not, I hope that they will at least seek to amend those proposals. On the hon. Gentleman's second point about those caught in the sale of the helicopter company, when the hon. Gentleman was a member of the Select Committee, he was a doughty champion of his and some other Members' constituents, and his intervention underlines that point. However, I understand that the hon. Member for Dover will deal with that point if he is lucky enough to catch your eye, Mr. Deputy Speaker.

I end as I began by focusing our attention on the Maxwell pensioners. Since the House last debated the plight of Maxwell pensioners, a considerable number of them have died. That should concentrate our minds on the task of maintaining pressure and trying to seek settlements without resort to the courts.

We should also expect the Government, who do not have a bad record in protecting the interests of the Maxwell pensioners, not to be frightened by their record but to build on it and, if the timing is right, to try to get those professional organisations which grew fat on fees from Robert Maxwell to pass on some of that fat to rebuilding the pension funds, so that, when we next debate the plight of Maxwell pensioners, it will be in celebration of reaching a conclusion instead of recording that more of them have died awaiting a resolution to their plight.

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5.6 pm

Mr. Richard Page (Hertfordshire, South-West) : I have two reasons for speaking in the debate : first, I have been fortunate to catch your eye, Mr. Deputy Speaker ; and, secondly, my constituency abuts that of Watford, the one-time print centre of the United Kingdom until Robert Maxwell operated upon it, leaving a considerable number of unemployed people and a large number of pensioners. When I heard of his death late in 1991, little did I know the difficulties and the effect that his passing would have not only on me but, more important, on my constituents.

It is ironic that, three months before Robert Maxwell's death, I saw a line diagram of the management structure of the Maxwell empire. I remember thinking that it was a management structure designed for purposes other than ease of management control. Little did I know that within a few months I would be among those trying to unravel where the money had gone. I believe that the behaviour of some British institutions in that affair requires the type of examination to which the hon. Member for Birkenhead (Mr. Field) referred. The House can imagine my horror and dismay when I found that hundreds of pensioners in my constituency were in danger of having the roof taken from above their heads. When the truth began to filter through, I cursed the man for what he was doing to my constituents. However, now that there is some stability for those pensioners, I can see, perhaps with a little more tolerance, part of the reasoning behind his actions.

It is true that Robert Maxwell was an egotist, a bully and a thug, but I can understand what drove him to try to save his empire. I make that comment because Robert Maxwell is not unique. In future, there will be other Maxwells ; I hope that they will not be as big but will be teeny ones. The House should face the fact that other pensioners in other occupational schemes are going short, and will go short, of their pensions because we have not closed the loophole that allows pension funds to be raided in that way.

Fortunately, in this case, a large number of Maxwell pensioners were involved when the shortfall in funds began to show in early 1992. I say "fortunately" because, had there been only a small number of them, the case would not have received the same publicity and they would not have been in the fortunate position that they are in today. They were also fortunate in that Maxwell was a flashy character who commanded plenty of newsprint before and after his departure. But, as I say, other pensioners in other occupational schemes have not been so lucky.

The Government's position is simple, and I understand and support it. They cannot be expected to bail out every pension scheme that goes wrong. It would be morally wrong to use vast sums of taxpayers' money in that way. But in the Maxwell case, with such large numbers descending on the social security services for support--to pay mortgages and make up for lost pensions--more money would have been lost had the Government not contributed.

When I first examined the position of the pensioners, I thought of R. A. Butler. If an hon. Member went to Rab with a problem, one of his first questions always was, "How many of you are there ?" If the reply was, "Just me," the chances of achieving a favourable response or a change

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of Government policy were slim. But a reply such as, "I have a large number of people outside demanding action," focused Rab's mind on the issue in hand.

I admit to being a mere spear-carrier in the great Conservative party. I appreciated early on that, if I was to be of real help in the pensioners' cause, I needed the strength of numbers around me. I did a trawl through the House and was fortunate to persuade more than 70 hon. Members to attend the first Maxwell pensioners' meeting. I thank the hon. Member for Birkenhead for joining me as co-chairman of the group, which helped to make it an all-party affair and to lift it out of the endless possibilities of party bickering that the situation could have engendered. I also appreciate the efforts of other hon. Members who supported my idea of a lifebelt.

I shall not go into the details of the many meetings that took place. I am grateful to the Secretary of State not only for taking up the suggestion that was made in that context but for going much further and setting up the pension units and seconding senior civil servants to enable moneys to be traced. Setting up the Cuckney fund was of great assistance, and I am grateful to Sir John Cuckney and Mr. Ballard, both of whom dealt with some of the trustees of the fund in a more delicate fashion than I did at various stages of the affair.

With the partial distribution of the common investment fund, we have a breathing space, but it is only that and we must look to the future urgently. We cannot relax and say, "We need not worry. Nothing will happen for another two or three years." We must press on with all speed.

Looking to the future and to the position of Government on pensions, it is clear that they face a huge dilemma. A study of the demographic profile of this country reveals an aging population, a subject on which my hon. Friend the Member for Dover (Mr. Shaw) will speak if he has an opportunity to address the House. He has done research and majored on that issue and has expressed much concern about the future.

In 1901, only 17 per cent. of men and 22 per cent. of women lived to be 75. The figures are now 52 and 70 respectively, and it is calculated that the 4 million people involved will grow to 6 million in the next four decades. The numbers aged over 85 will triple in those four decades. The Daily Mail today points out that one in five are over60, an increase of 8 per cent. in 10 years, and that the trend will continue.

The dilemma facing the Government is horrendous. They must persuade as many people as possible to accept the full responsibility of pension payments, getting them into occupational schemes as well as disclaiming financial responsibility for those schemes.

The Government want to get people into occupational schemes for obvious and sensible financial reasons, but surely they have a moral responsibility to ensure that those people are protected. The Government cannot say, "You are now out of the state scheme, into occupational schemes, and on your own." They must accept that, when people are moved from one to the other--let us not forget the contributions of 2 per cent., or whatever the figure was, which encouraged people to move from SERPS to occupational pension schemes- -they retain some responsibility.

Some may point to the work of the Investment Management Regulatory Organisation, and I agree that it has received some criticism during the Maxwell affair. I fear that it was a stable door closing operation, the horse

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having bolted ; the door being closed, the remaining horses are locked in the stable. Unfortunately, the horse that got out has caused an immense amount of damage and hardship to pensioners. We are awaiting the Goode report and cannot predict what it will contain, but it must propose some form of safety net. What I am suggesting is not like a bolt from the blue. There is already in place, for example, the air travel trust. Under that, if people book a package holiday and the airline on which they are to travel fails, there is a £30 million fund to pick up the costs of the failure. That money is made up of a levy on the industry, authorised by the Government. With the recent collapse of the International Leisure Group, a great chunk of that £30 million was absorbed. It is now being rebuilt and the Government are guaranteeing it.

I see no reason why another fund, paid for by the pension companies, should not be established. The levy need not be vast, bearing in mind the billions of pounds that go into occupational pension funds every year. Whatever form it takes, a safety net organisation should be established to pick up the Maxwells of the future to prevent pensioners falling on hard times.

I shall detail only one of the many cases that have come to my attention, literally that of the proverbial little old lady. In no way could she have survived in her house without her pension money. Her small mortgage was coming to an end and she needed money to pay the mortgage if she was to remain in her home.

It is incumbent on the Government to ensure that a scheme is established involving the whole pensions industry. The House has a duty to make sure that, should there be Maxwells in the future, pensioners will be protected.

5.27 pm

Mr. John Gunnell (Morley and Leeds, South) : It is clear to me as I look around the House that the overwhelming majority of hon. Members who will take part in the debate are members of the Select Committee and have therefore developed a certain expertise in the subject. My only expertise comes from frequently meeting many of the Maxwell pensioners who live in Leeds.

Leeds is the home of the former printers, E. J. Arnold, the company which was taken over by Robert Maxwell and which was the basis of the Headington pension fund, one of the funds that is less happy just now. There are also in Leeds a number of other printers who were taken over by Maxwell, but the pensioners in those companies come under the Maxwell works scheme and are more fortunate than their fellows, although they attend the same meetings as pensioners from the Headington scheme.

Those pensioners meet about once a month and I often attend their meetings. I am always struck by the way in which they cannot take for granted the almost everyday matters that we accept as normal. For example, we assume that at the end of the month there will be a salary cheque waiting for us. Most of us also assume that, having put in our claims, we shall receive our travel allowances, and so on. We know that those will come at the end of the month so we do not worry about them.

As Robert Maxwell has been gone for 20 months, but pensions have nevertheless been paid, we might expect

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pensioners to believe that they will continue to be paid. My hon. Friend the Member for Birkenhead (Mr. Field) was right to praise the actions that have been taken to ensure that. However, the Maxwell pensioners are not entirely certain that their pensions will continue to arrive.

That might seem strange, given existing guarantees, but it is not really that strange, because the original £2.5 million that was properly made available is now exhausted and the money is coming from the £6 million that Sir John Cuckney was able to raise through voluntary donations. Obviously, the pensioners can estimate the length of time that that is likely to last before it, too, is exhausted.

Elderly people rely on their pension cheques arriving for the rest of their lives and they need to be reassured that that will happen. Hon. Members concerned about the matter should meet pensioners and talk to them. Indeed, the Minister represents a seat not so far from Leeds--I welcome a Yorkshire Member in the office that he holds--and the Maxwell pensioners would be happy to meet him. Although some things have not gone as they hoped and they have had disappointments, I am sure that they would not shout at him. They would have a sensible discussion about the issues on the table and the best way forward.

The whole community of Leeds have been involved in supporting the Maxwell pensioners. I pay tribute to the work of the Yorkshire newspapers, particularly the Yorkshire Evening Post, which continually emphasised the injustice suffered by the pensioners and our obligation to ensure that their pensions were paid.

I pay particular tribute to one blind pensioner in my constituency, Ivy Needham, who leads the Leeds pensioners. When we think of Robert Maxwell and his wealth and of Ivy Needham struggling in her council house in Middleton, it is clear that Ivy is an apt symbol of the injustice that the pensioners have suffered. I knew Ivy before all this arose. She put pressure on me because a class for the blind and partially sighted in a local school faced a rent increase. She certainly let me know what she thought of that. In some ways, the injustice of the events surrounding Robert Maxwell inspired Ivy to lead the Maxwell pensioners, despite her physical handicap. As the Minister knows, Ivy was recently granted up to £7,500 legal aid for her application to the European Court where, as the symbolic pensioner, she is pursuing a claim against the Government for failing to implement EC directive 80/897, which requires member states to take the steps that are necessary to protect the pensions of former employees of insolvent companies. The legal aid covers the preliminary work needed to establish whether there is a case to be heard.

I believe that it is in the Government's interests that that case is heard. It would be valuable to know whether the directive applies. I regret that the Government are not committed to ensuring that the case is heard so that we can know what judgments will be made. To have knowledge of such judgments would be helpful not just to Ivy Needham, the symbolic pensioner, but to the Select Committee--which, I am sure, would want to see European judgments on the matter--and the Government.

There are one or two matters that I hope will be resolved in today's debate. I recognise that setting up the Maxwell pension unit is an achievement for the Government. The civil servant who heads that unit is leaving--or he may have just left. As he gave good and clear leadership to the unit, I want the Minister to assure

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me that the fact that he has returned to his native department does not mean any lessening of the Government's commitment to the work of that unit. As my hon. Friend the Member for Birkenhead said, there are tasks still to be carried out. There is a clear co-ordinating job for the unit as the distribution of the Cuckney investment fund is arranged and assets are recovered. The unit's excellent leadership has been especially helpful in that process.

I want the Minister to clarify the position on the state earnings-related pension scheme. We recognise that not having to pay to get back into SERPS is a positive move by the Government, and it should be seen as such. However, people are a little uncertain about when and whether that money will become payable. We need to know what the shortfall will be between the money raised and the money required. The £100 million involved in that is clearly relevant. We must look at pension funds that are especially disadvantaged. People in Leeds come from two different schemes, so they are able to compare one with the other. The Maxwell pensioners had hoped for a 5 per cent. increase but are to get 3 per cent. When they compare their position with that of pensioners in the other scheme, who are to have no increase, perhaps they will not feel too badly about not getting the full 5 per cent. There should be justice between the schemes and I hope that the Minister will say something about that.

As hon. Members have said, at the end of the day there will be some shortfall. Assets have been identified and there are now mechanisms to ensure that they are recovered. That fact gives some validity to the Government's assertion that had they underwritten the necessary money from the start, that information would not have been discovered and the assets identified and recovered.

It becomes less valid as more information is received. At some point there will be a gap, and I want to be certain that when it is reached, the matter will be positively resolved. I do not want my pensioners, who worry week by week, to continue worrying into the distant future. The time must come when Maxwell pensioners in Leeds will be able to celebrate and to say, "We can stop meeting on the basis that we meet now, because we are assured that our pensions will continue to arrive in the post for as long as we need them." 5.40 pm

Mr. David Shaw (Dover) : Eleven million people have occupational pensions, and 5 million have personal pensions. That is a major success story and a tremendous achievement by the Government, which has contributed to a true capital-owning democracy, greater security in retirement and a better understanding by many more people of the economic processes by which this country creates wealth.

When the history of the Thatcher and Major Governments is written, people will pay great attention to the fact that so many members of the public were able to increase their ownership of the community by home ownership, pension ownership or other assets.

Mr. Paul Flynn (Newport, West) : Is the hon. Gentleman aware that, in the final quarter of 1992, 44,000 owners of personal pensions allowed them to lapse? What

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will they think when they look back on the age of Thatcherism? They have no personal or occupational pension or SERPS.

Mr. Shaw : There will always be people who, for one reason or another, do not continue their payments. Sadly, many people are oversold individual schemes--but they can obtain restitution under the Financial Services Act 1986. A lapse of 44,000 pensions schemes out of 5 million is not enormously significant--and it occurred at the peak of a recessionary period, when many people may have felt that it was difficult to keep up their payments. I have every confidence that many of them will return to their schemes, and that a large number of them may be members of other schemes anyway. Some people discover that they are in too many schemes and that the Inland Revenue has rules that prohibit that. There are several reasons why membership of schemes is cancelled.

I have not even mentioned the number of people who have life assurance policies and who save through unit trusts. A major change has been achieved and I look forward to the day when the Labour party will join that debate on an equal footing and will welcome that development.

Many of the 16 million pension scheme members have no problems or fears, whether their schemes are personal or occupational. They will pursue worthwhile careers while they save for their years of retirement and will then enjoy many years of happy retirement with no problems. However, members of the Social Security Select Committee recognise that some schemes have problems.

The Select Committee has examined several schemes, including the Harland and Wolff scheme in Northern Ireland, which has problems, and has discussed the Belling and Lucas schemes. The Select Committee is also concerned about the Dormobile scheme, with which I had a particular problem, because a number of my constituents were concerned about a mysterious loan that had been made.

Sadly, some schemes have been brought to the Select Committee's attention and they need careful investigation and review. However, it surely cannot be the long-term role of a Select Committee to become involved in problems of that kind. We must establish a mechanism that allows for problems to be resolved in a better way.

A number of organisations are involved, including the occupational pensions advisory service, and they do the best job that they can in the circumstances. Perhaps the Goode report will recommend that a better way be found of structuring the various advisory bodies and support mechanisms. I hope that the Government will always play an active role in supporting them. Given that there are 16 million pension scheme members, it is incumbent on the Government never to abandon or be accused of abandoning those people, but always to examine better ways of protecting the interests of scheme members and of ensuring that this country's pension system remains one of the best in the world.

The Select Committee began examining occupational pension schemes in general in July 1991. When the Chairman and I began discussing with colleagues our producing a report on occupational schemes, little did we realise that Mr. Maxwell was at that very moment already secretly ripping off his company's pension fund to the tune of £220 million. As our report got under way, that figure was to grow to £450 million. We must have had a sixth

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sense in July 1991. Mr. Maxwell went overboard--jumped overboard, as it would now appear--in November 1991, and within a month it was apparent that the Maxwell fund was encountering serious difficulties. The Select Committee therefore extended its investigations. Following the Select Committee's initial work in the last Parliament, the Department of Trade and Industry announced that the Mirror Group prospectus would be investigated, and the Government established the Goode committee to investigate aspects of occupational pensions. The Securities and Futures

Association--unbeknown to some, but this is now know to

all--investigated Goldman Sachs and its role in the Maxwell dealings. The Investment Management Regulatory Organisation appeared before the Select Committee, and there came to light a number of deficiencies in the way that it had treated the Maxwell companies. As a consequence, IMRO examined its own organisation and the role of its members, and that led to Invesco MIM recently being fined £2 million including costs. There is no question but that, in just those four areas, the Select Committee had a considerable impact on initiating serious examination of some of the problems surrounding the Maxwell affair.

I am delighted with the Government's response to the Select Committee. There is no question but that the action of my right hon. Friend the Secretary of State for Social Security in establishing the Maxwell pension unit displayed remarkable sensitivity in recognising that a serious problem existed that required special attention. That unit has been an incredible success. The Maxwell pension trust, which my right hon. Friend also initiated, has also been enormously successful, with the Government paying its administrative costs, so that it has not been a burden on any pensioners. That trust has helped to raise a considerable amount of money, to ensure that Maxwell pensioners have their legitimate current needs met for the foreseeable future.

The Government's contribution of £2.5 million to support certain pensioners in pension schemes in financial difficulties is an important and compassionate measure that has helped a number of pensioners--including a small number who were direct pensioners of companies that went into liquidation. There was therefore no pension scheme to pay them and they were dependent on those companies' survival. Once the companies went into liquidation, the pensioners were left without any money. The Government's £2.5 million certainly came to their rescue.

More important than anything else, the Government have, in effect, lent £100 million to the Maxwell pension schemes by deferring collection of state scheme premiums. Many of us have difficulty in understanding how it operates, and I will not attempt to explain the complexities of that particular transaction. It is one that, even as an accountant, I find difficult to follow ; it is very intricate. There is no doubt that the Maxwell pensioners have benefited a great deal from collection being deferred and that there is no interest payable.

Mr. Frank Field : It is worth putting on record the fact that both the hon. Gentleman and I have sounded sycophantic when talking about the Government. That is because the Government did many of the things that we asked them to do.

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Mr. Shaw : I am grateful to the hon. Gentleman, as an Opposition Member, for pointing that out. It is a delight that hon. Members on both sides of the House recognise that there has been an all-party move on this issue to keep it off the main political agenda. Inevitably, there are differing political views about certain aspects and individuals involved, but there has been tremendous cross-party agreement. My hon. Friend the Member for Hertfordshire, South-West (Mr. Page) made great efforts, together with the hon. Member for Birkenhead (Mr. Field) and myself, to avoid getting to a point where the Maxwell pensioners lost because of political wrangling.

Mr. David Lidington (Aylesbury) : Does my hon. Friend agree that there is considerable concern--particularly among the deferred pensioners involved in the Maxwell schemes--that the Government's intention might be to postpone premium and interest payments only until the pension funds are able once again to meet their liabilities to pensioners currently in receipt of pensions, rather than until the schemes are able to cope with their liabilities to deferred pensioners? It would be reassuring to many of the deferred pensioners, including those whom I represent, if the Government responded generously this evening.

Mr. Shaw : I coe of many--although not too many !

My hon. Friend the Member for Aylesbury (Mr. Lidington) makes a strong point about deferred pensioners. There will be considerable concern if the Government cannot find a way of bridging the gap. The Committee has increasing confidence that that can be done, if the institutions that have done wrong meet their commitments to make restitution. Moreover, because of the various events that have taken place with the pension funds, the Committee feels that it might be possible to reconstruct the position and enable much of what has been lost to be recovered. That can be achieved, as my hon. Friend has pointed out, only if we get to a point where the Government can ensure that there is enough support in the intervening period. I hope that the institutions that are to blame will come forward, in the not too distant future, and recognise their responsibility. That would ensure that the public-purse commitment would not continue for long. We have to consider the many other pensioners, the many disabled and other people who need help from the public purse. If the institutions and companies involved with Mr. Maxwell have done wrong, they should be made to pay out soon. We could then get on with the business of government and Parliament and ensure that the £300 billion a year of public spending goes to those in need, and not to finance those financial institutions that may have done wrong. I am particularly concerned about two pension schemes. One is the Maxwell Communication Corporation works pension scheme, and the other is the British Island Helicopters pension scheme. My hon. Friends the Members for Waveney (Mr. Porter) and for St. Ives (Mr. Harris)--both former members of the Select Committee--have taken considerable interest in that matter during the last year and a half.

Those two schemes are in a terrible position. Mirror Group Newspapers issued a prospectus that said, in paragraph 3(a) of the accountant's report, that the works

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