House of Commons Hansard Debates for 8 Jul 1993

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scheme would be incorporated into the Mirror Group Newspapers pension scheme. The prospectus was issued in April 1991 ; by the time Mr. Maxwell had jumped overboard in November 1991, a commitment to the board of directors, in a prospectus--a doctrine issued under the Companies Act--had not been carried out. That is an appalling state of affairs for someone like myself who has been involved in the issuing of prospectuses ; it is appalling that a commitment should have been given and, many months later, not been carried out.

There is no doubt that the directors of Mirror Group

Newspapers--many of whom are still directors--must address the issue of meeting the commitment in the prospectus, or should resign and cease to hold any public or corporate office in the land. They are unfit to be directors of public companies--as Mr. Maxwell was described--if they cannot meet the commitment in the prospectus.

There is also an appalling situation with British Island Helicopters. Mr. Maxwell said that he would bring those pensioners into the Mirror Group Newspapers scheme, and in that instance he did so. There was a substantial liability, therefore, to pay pensions to British Island Helicopters employees. What has happened is that the old Mirror Group Newspapers scheme has effectively been closed and a new scheme started, but the British Island Helicopters members are not included in the new scheme.

A clear commitment was made by Mirror Group Newspapers and its pension fund to British Island Helicopters' members. There is clearly a moral commitment, even if legal devices enable the fund to get out of it. It is totally unsatisfactory that an existing legal and moral commitment like that could be avoided by closing down an old scheme and opening a new one.

I turn now to the issue of whistleblowing and corporate governance. As I said at the beginning of my speech, this has cost the Government money. The Government have, compassionately, come up with money, but they should not have had to do so. If the Maxwell empire had been properly run--and the people who know about the irregularities in it had spoken at an earlier stage--we would not have had this problem. Deborah Maxwell is no relation to any of the Maxwell family--it is coincidental that she has that name-- but she is a solicitor, a member of the Law Society, and on 19 November 1990 she wrote three memoranda. Having read the memoranda, I think that she is a very competent solicitor, with considerable skills and abilities. In one memorandum, Deborah Maxwell points out that there are implications in the share dealing involving MCC shares that concern the takeover code. She refers to stock exchange compliance in relation to family private companies and their shareholdings in public companies and also to section 134 in part VI of the Companies Act 1985, which deals with the 3 per cent. disclosure rules in regard to shareholdings in public companies. She mentions that there had been a panel ruling in relation to Maxwell family companies and their concert-party relationships, and she refers to the put option by Goldman Sachs and the notification to the stock exchange of the implications arising from that put option. That was a substantive and well- produced memorandum.

A second memorandum states :

"The failure to disclose this holding could have consequences under section 47 of the Financial Services Act

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1986, a copy of which I attach. This concerns, inter alia, the making of misleading statements to and the concealment of any material facts from the investment community."

The memorandum goes on to state :

"Trevor Cook has I believe advised you separately on the IMRO aspects of this holding The other matter of this which you must be satisfied about is that the trustees of BIM"

Bishopsgate Investment Management--

"have properly carried out their duties, inter alia, to act in the best interests of the various pensions funds in making these investment decisions."

Deborah Maxwell was querying whether investment decisions were being made properly by the trustees of BIM, or whether investment decisions were being made by Maxwell in his personal or family interest.

The third memorandum states :

"Following my conversation with Robert Maxwell on Saturday, it has as you know been agreed that, with effect from today, I am relieved of any compliance responsibilities in relation to BIM and MCC generally.

I am attaching two files relating respectively to the private holdings in MCC (the family and the Maxwell Foundation)"-- in Liechtenstein, of course- -

"and BIM's holding in MCC. Each file has a summary on top to show the present status. I will tomorrow let you have such other files as I keep relating to other companies in which BIM owns shares. I recommend that you give the BIM file to Trevor Cook who is already up to date with the position. I consider that the MCC private side holdings file should go to Robert Bunn who knows all the background information and has up to date details."

Those are three very good memoranda. They are clear and to the point. As I have just shown, in the third memo, Deborah Maxwell gave up her duties. She resigned. Hon. Members may be sad to know that, according to another memorandum, when she resigned she moved down the corridor and was given a salary increase of some £75,000 a year. She was also paid £50,000 in cash for leaving her job as compliance officer. She used £40,000 cash to repay her mortgage with the building society.

Hon. Members will no doubt be concerned that this person, who on 19 November 1990--a year before Mr. Maxwell jumped overboard--had substantial knowledge about the fact that Mr. Maxwell, in a host of areas, was potentially breaking the law or breaking City codes and regulations, had received a substantial sum and ceased her duties when whistleblowing could have occurred. It is a great tragedy for the pensioners, who, in the end, have lost many hundreds of millions of pounds, that £50,000 managed to secure her silence in a way that could have been critical in the circumstances.

We should not blame Deborah Maxwell alone. There were many other potential whistleblowers who could have prevented the enormous cost that the Government have incurred in helping the Maxwell pensioners. A number of directors of MCC knew of the problems. Sadly, they did not know of much else. I have seen the board minutes of that corporation. It is difficult to envisage what the board thought was the business of MCC. I understood that it was publishing, but the board minutes show no reference to publishing. All one can see is a number of transactions with banks as Mr. Maxwell was rapidly renegotiating his loans.

As I have said, we know that Deborah Maxwell knew. We also know that Goldman Sachs had immense knowledge of the Maxwell empire. It knew that he was a desperate man from the way in which he was structuring

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his deals. It knew that he was short of cash and was involved in strange deals. It knew that there was a severe risk of a false market developing for MCC shares. Indeed, many people believe that there was a false market. We also know that Lord Donoughue knew of irregularities involving stock lending.

There were many more who knew about problems in the Maxwell empire because there were many resignations in Maxwell companies in the last two years. In many instances, the money involved, as with Deborah Maxwell, was only £50,000. In other instances, people received £100, 000. In the Maxwell empire, £100,000 here or £100,000 there was nothing if it secured silence. It was £250,000 that secured the silence of Lord Donoughue.

Mr. Deputy Speaker. (Mr. Geoffrey Lofthouse) : Order. The hon. Gentleman is probably aware that he must not criticise Members of the other place.

Mr. Shaw : It has been difficult. I have tried merely to state fact and avoid criticism. A payment of £250,000 was made and, in the view of many, it did secure silence.

Occasionally, the sums involved were greater than £250,000. Jean- Pierre Anselmimi, as far as one can make out from documentation, knew virtually everything that went on in the Maxwell empire up to his resignation. It took £300,000 to buy his silence.

My final point concerns restitution. Who will pay back the pensioners' money ? Enough information about wrongdoing is now emerging. I do not think that we need to see a trial next year in order to establish whether serious wrongdoing has occurred. Common sense shows that there has been some wrongdoing by some parties who must, in many instances, remain nameless for the purposes of this debate and for legal reasons.

The Government have committed no wrong. As I said earlier, they have bent over backwards to try to assist in different ways. The reality is that private individuals and the private sector have failed the Maxwell pensioners. There is no justification for public expenditure being taken away from important Government programmes in order to continue bailing out those involved in this affair and so that some institutions and private individuals can be let off the hook. The City firms that failed in their duties in their enthusiasm to do business with Maxwell, and the private individuals who were directors of his companies and took large sums of money on resignation simply because they knew too much, must make their contributions to restitution for the pensioners.

I believe that a list should be prepared showing all those involved. Contributions should be invited and every lawful method should be used to ensure that contributions are made. It may be that the largest contribution should be £100 million. Many hon. Members know what sort of financial institution should be contributing at that level. Smaller contributions should also be made, right down to £50,000 or so from some private individuals who have benefited enormously from the Maxwell pension problems.

I hope that the Government will do everything that they can to continue to help the pensioners. I hope that they will take a particular interest in the plight of the MCC works pensioners and the British Island Helicopters pensioners, who have particular problems, even worse than those of

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many others. I hope that we are not far away from a

resolution--perhaps on the second anniversary, or just before it, of Mr. Maxwell going overboard--to this awful and appalling problem that has upset so many people in their pension years.

6.9 pm

Mr. Malcolm Bruce (Gordon) : I apologise to the House, and especially to the hon. Member for Birkenhead (Mr. Field), for being a little late. I was hosting a reception for Deaf Accord, which overran slightly. I did not hear everything that the hon. Gentleman had to say but I heard some. As other hon. Members have done, I thank him for the work that he has done since the sad story broke and I also thank the Select Committee on Social Security for the progress that it has made.

May I reverse the sycophancy and say that, although it is good to witness the hon. Gentleman's good nature in his thanking the Government for their response, the House must nevertheless be grateful to him for his work and for ensuring that the arguments were presented in a way that would secure that response. I shall not break the spirit of all-party accord, but I believe that the Government have a little more responsibility for certain aspects of the matter than has been acknowledged.

I pick up where the hon. Member for Dover (Mr. Shaw) left off. He spoke of those who should contribute to reinstating the Maxwell pension fund. It is deeply disappointing that the City of London appears to have lost sight of just how much damage has been done to its interests, and that it has shown so little concern about what it could and should do to repair that damage.

In the last Parliament, I was a member of the Select Committee on Trade and Industry, which compiled a report on financial services and the single market. We travelled to the main European financial centres such as Paris, Madrid, Milan and Frankfurt. There was no doubt that the credibility of British financial institutions had been deeply undermined by the Maxwell experience. That was especially so in Germany, where we have had considerable difficulty in getting our way of managing pension funds accepted. If the Germans had their way, our system would not be admitted in the European Community. I acknowledge that considerable benefits have accrued from the way in which the reputable life and pension institutions in the City of London make a pound work much harder than almost any other comparable institutions in the world. We do not want to lose that, so I wish to make it clear that my remarks are not designed to undermine those institutions, although I suppose that one could argue--and the Germans surely would argue--that, if our pension administration followed their law, the Maxwell case could not have arisen.

We must complete the reform of our pension fund law to ensure that such an occurrence is almost impossible in the future. If we can achieve that, we might eventually be able to ensure that the pensioners who have been defrauded will receive full compensation, including contributions from the City. I accept that the Government should not jump straight in and pay for the consequences of fraud, but on behalf of the pensioners I am obliged to say that, although the bit-by-bit access to funds is better than nothing and although it ensures that the day-to-day bills can be paid, it does not make for a long, happy and

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planned retirement. It seriously undermines the plans that many people had for their retirement, and we can all have a great deal of sympathy for people in that situation.

Mr. Page : I understand the hon. Gentleman's concern about the mental processes of pensioners who are wondering where the next penny will come from, but does he accept that it is incumbent on the unit to ensure that the money was supplied only to the various pension funds when it was needed--in other words, to continue to apply pressure on to reach a decision, because some were not over-hasty in, for example, resolving the common investment fund allocations?

Mr. Bruce : I accept the hon. Gentleman's point, but individual pensioners are still left in a difficult position. Such pressure was regrettably necessary to produce some results.

Mr. Mark Wolfson (Sevenoaks) : Does the hon. Gentleman agree that it is important that one of the messages that goes out to the pensioners from this debate is one of reassurance that the House is ultimately determined to ensure that restitution in full is made but that we are also adamant that payment, as far as possible in full, must be made by those who made mistakes or were responsible for wrongdoing?

Mr. Bruce : I entirely agree. Having had numerous meetings with Ministers, I understand their difficulty in saying that in such terms although I think that many would like to. All we can ask is that they say nothing that undermines the sentiment that the hon. Gentleman has expressed.

The hon. Member for Morley and Leeds, South (Mr. Gunnell) referred to members of pension schemes with annual reviews but no guaranteed increase. I have been contacted on their behalf, and I understand that more than 1,000 people are members of two or three such schemes. Following on from what I said earlier, it is understood that getting a payment is better than not getting a payment, but their concern is that, had the money not been stolen, they could reasonably have been assured that they would have received at least a cost of living rise every year for the foreseeable future.

For those who retired recently and perhaps took early retirement, the thought that their pension is fixed for the next 20 or 30 years, if they live that long, or even for 15 or 20 years, is a further worry. I therefore hope that full restitution might include returning to those people the money that they might reasonably have expected to get from the fund if it had not been stolen. I have been asked to make that suggestion to the House.

I echo the points made about deferred pensioners. There appear to be different views. The claim that the £100 million to which the Secretary of State referred is effectively an interest free loan cannot be squared, but the issue was raised in an intervention. I am sure that the Minister has taken note, and I merely want to reinforce the point.

My hon. Friend the Member for Bath (Mr. Foster) has members of three different former Maxwell schemes in his constituency and has asked to be associated with my remarks. He has been active on their behalf and has made representations to try to ensure that they get full refund of that to which they are entitled.

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My particular point of constituency interest has already been mentioned by the hon. Member for Dover. I do not mean to criticise him in his absence, but the correct name of the firm to which he referred is British International Helicopters, not British Island Helicopters. The firm has its headquarters in my constituency. I have been very much involved with the company--more involved than I might have wished --since it was sold by British Airways.

When selling the company, British Airways' management behaved dishonestly and despicably towards its work force. The management, especially the then chairman and the current chief executive and chairman--I do not need to name them because everyone knows who they are--treated members of all parties with absolute contempt. They convened a meeting shortly after I was elected. They invited me, the then hon. Member for Banff and Buchan, Sir Albert McQuarrie who was a Conservative, and the present hon. Member for Aberdeen, North (Mr. Hughes). In front of an audience of several hundred employees, they asked us to campaign for the Nott assurances to be implemented and for British Airways to be privatised as a single entity, specifically on behalf of the work force of British International Helicopters.

Before the ink on the privatisation agreement was dry, we discovered that the management were in secret negotiations to sell the company, initially to a Mr. Meade--a person at least as disreputable as, if not more so than, the person to whom it ultimately was sold. I managed to blow the whistle on that deal when I heard about it, because I happened to be due to ask the Prime Minister a parliamentary question that day, and the negotiations were broken off 24 hours after the matter was raised during Prime Minister's questions. According to information brought to my attention more recently, Ministers had intervened to say that that sale should not go through.

That is a pertinent point. Hon. Members with a particular interest in British International Helicopters have had numerous meetings with Ministers, and we believe not only that the employees have been appallingly treated, but that the Government have a responsibility rather different from any responsibility that they may have for the other companies.

Basically, the Government gave their approval to the sale to Robert Maxwell, whom they had previously designated as a person unfit to run a public company. I am sure that the Minister is already aware of the fact, but I should like to make it clear to him that the hon. Members apart from myself who have a constituency interest in the company include the hon. Members for St. Ives (Mr. Harris), for Waveney (Mr. Porter), and for Kincardine and Deeside (Mr. Kynoch), my hon. Friend the Member for Orkney and Shetland (Mr. Wallace), the hon. Members for Aberdeen, North (Mr. Hughes) and for Angus, East (Mr. Welsh) and the Secretary of State for Transport. So it certainly is an all-party group.

I do not expect the Minister to acknowledge the belief that the Government have a moral responsibility arising out of the sale--indeed, some of his colleagues have refused to accept that. Nevertheless, everyone in the all- party group believes that that moral responsibility exists. That is not simply a personal view of mine. The hon. Member for St. Ives, in particular, has vigorously expressed the same view.

The hon. Member for Dover has to some extent brought us up to date on the way in which the Mirror Group has treated BIH pensioners. Those pensioners were

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induced by an agreement between Maxwell and British Airways to transfer from the British Airways pension fund to the Mirror Group pension fund. They then contributed to the Mirror Group fund, and the day that Robert Maxwell fell overboard the company went into administration because of the way it had been managed. I should like to put on record the fact that the company has been bought out by its management and staff and is now trading successfully. Nevertheless, not only those people's pensions but their entire livelihoods were put at risk. Indeed, a number of them lost their jobs.

I find it breathtaking that the directors and management of the Mirror Group can simply expel a group of people from the pension fund with impunity. I read with some interest the exchanges between the hon. Member for Dover and the chairman of the trustees, Mr. Colin Cornwall, and the brittleness of the atmosphere comes through even on the printed page. I have met Mr. Cornwall, and I appreciate his compromised position, but I am concerned by the fact that he felt unable to speak out in a more forthright way as a trustee of the original fund.

In response to the question asked by the hon. Member for Dover in the Select Committee, Mr. Cornwall said that the decision effectively to freeze the old scheme and to set up a new scheme to which the employees were not party

"was a decision of MGN. The trustees really had no status in the matter of who should or who should not be eligible for the Past Service Scheme we simply are not in a position to bandy words with MGN, which has the sole control over who is and who is not admitted in their Past Service Scheme".

That may be the literal and legal truth, but in terms of moral justice it is an outrageous position for the trustees to have taken. I certainly hope that it may yet be possible to resolve the matter without recourse to the courts, but legal action is still not ruled out.

At a meeting between the all-party group and the present Parliamentary Under-Secretary of State for Employment, the hon. Member for Maidstone (Miss Widdecombe), who was then a Minister responsible for social security, it was suggested that we might try to secure arbitration. Sir John Cuckney was approached, but he felt unable to arbitrate.

I have been told that representatives of the BIH pensioners have now briefed officials of the Maxwell pension unit on their legal claims, and we are now waiting to see whether that will secure some kind of mediation. The legal claims being made by BIH staff against the Mirror Group and its professional advisers have been shown to me and, although I am not a qualified lawyer, they seem to me to have a strong legal case. They certainly believe that they have. I repeat that the moral responsibility seems to me incontrovertible, and I should regard it as most regrettable if the case had to go to court. I hope that we may be able to secure some justice, and anything that the Minister can do behind the scenes to bring that about would be much appreciated by all the parties involved in and concerned about BIH. I repeat my belief that the Government have more responsibility here than they have for some of the other schemes. Arthur Andersen, which acted as the administrator for BIH, has accepted liability under section 58(b), covering contracting back into SERPS, and the negotiation concerns only the size of that liability. The firm has

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approached the Inland Revenue because the Revenue is a preferred creditor in the liquidation of BIH, ahead of the trustees, and there is an £11 million corporation tax bill. The firm has asked the Revenue to allow payment, once the figure is decided, to be tax deductible.

The current position is that the Revenue has said :

"tax credits, having been given once, cannot be repeated". The sources in BIH to whom I have been talking say that they understand that argument, and that in normal circumstances they would accept it, but that if the Government could re-assess the matter, that would be of enormous assistance in enabling the transition to take place. I know that such a procedure would be exceptional, but I argue that the Government's involvement is exceptional, and it would be a gesture that might help to move the matter forward.

Each debate that we have had in the House and in the Committees has enabled us to secure progress. I am grateful for the cross-party nature of the support and for the constructive attitude of Ministers. Even if the questions that I have asked cannot be answered in a forthright manner at the Dispatch Box today, I hope that they will be taken fully on board, and that ultimately we shall be able to ensure that every pensioner who has been affected will have his or her rights fully restored.

6.28 pm

Mr. David Willetts (Havant) : I begin by congratulating the Chairman of the Select Committee on Social Security, on which I serve, on the way in which he has conducted the Committee's deliberations on this subject. Many members of the Select Committee, of all party loyalties, are surprised that the hon. Member for Birkenhead (Mr. Field) is not yet the leader of the Labour party. If he ever gets fed up with waiting for that distinguished post, the outstanding way in which he has conducted our investigations into the Maxwell affair over the past two years suggests that he would make an ideal candidate to run the Serious Fraud Office, which clearly needs improved management. The training and expertise that the hon. Gentleman has developed in investigating fraud make him the ideal man to take on that responsibility.

I am a layman in such debates. I have no accountancy or legal expertise, so some of the arguments and investigations of the tangled affairs of Mr. Maxwell have been beyond me. Three or four points, however, emerged strongly from the Committee hearings.

First, I was surprised at how easy it is in the City simply to transfer securities from one holder to another and from one physical location to another. Because so many securities are bearer certificates--there is no stamp on them saying who they belong to or what organisation claims their ownership--it seems to be possible to pick them up, carry them somewhere else and claim to own them, or to dispose of them. That surprised me.

Secondly, I was surprised by the way in which apparently elementary tricks, such as calling one firm BIM, Bishopsgate Investment Management, and another BIT, Bishopsgate Investment Trust, makes it possible to shuffle shares around with no one noticing what is being done, because BIT and BIM look so similar on a transaction document. Robert Maxwell did not need to develop extraordinary accountancy skills to carry out some of his frauds. Elementary techniques of that kind were used.

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Thirdly, it appears that the regulatory organisations let Maxwell pensioners down. The Investment Management Regulatory Organisation has already accepted some responsibility. Many of us have been rather surprised at the narrow role that the Occupational Pensions Board has played in the affair. I hope that the Goode committee-- an ingenious and suitable name--will examine the possibility of establishing a new regulatory authority to supervise pension funds. However, any new organisation that is established must displace an existing one. ined the debate, having been about my duties in other parts of the House, and I shall intervene only briefly. Committee members will know that, by nature, people who have retired are getting older and worry more and more, once they have retired, about their pensions going wrong. Does my hon. Friend think it a good idea, not only that there should be an ombudsman, but that there should be a system whereby pensioners could appeal, for example, to special commissioners? They could then give evidence and at least get that worry off their chest and into the open.

Mr. Willetts : My hon. Friend's suggestion is an interesting one, which I hope that the Minister will consider and perhaps deal with in his speech.

My final observation about the investigation of the Maxwell affair is simply on the extraordinary cost of professional fees, which are clocking up at a very high rate. That is an additional argument to the many already advanced in our debate for a negotiated settlement, which does not involve years of elaborate wranglings in the courts. I understand that many of the organisations involved are ready for a negotiated settlement, but a problem has arisen because of insurance entitlements. Many insurance companies will pay out only if a final legal case has resolved liability. I hope that Sir John Cuckney--who has made such a distinguished contribution to solving those problems--is able to solve that one as well.

There is a danger of these debates--we have fallen into that trap a little today--ending with exchanges of mutual admiration in which different members of the Select Committee agree on how marvellously it has done. So I was thinking of something controversial and outrageous to say.

Mr. Alan Duncan (Rutland and Melton) : Uncharacteristically so.

Mr. Willetts : I thank my hon. Friend for that. I was thinking of saying something uncharacteristically outrageous and controversial. We have better prospects for a sensible pensions policy in this country than almost every other advanced western country.

Mr. Paul Flynn (Newport, West) : Outrageous.

Mr. Willetts : Yes. What an outrageous remark. I was afraid that it would stir up dispute.

I was very surprised by the remarks made by the hon. Member for Gordon (Mr. Bruce), who committed the classic Liberal Democratic assumption that it is all better in Germany ; they have all got it sorted out on the continent. We heard eloquent praise of how German pension regulation would have made the Maxwell affair impossible here.

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However, the extraordinarily high self- investment in the German system is shocking, with company pension funds investing in the companies for which the employees work. That is one reason why Germany does not have a healthy takeover market for its firms. The only way in which they can manage to run the risks of self-investment is by pension funds insuring against the risk that the company in which they invest does not go bankrupt.

Such insurance is only possible in a stable economic environment. It will be interesting to observe, as Germany goes into deep recession, whether the insurance premiums that German pensioners have to pay rise and whether that forces a change in the behaviour of German pension funds, by opening up German capital markets so that they more closely resemble those in Britain and America. We have a healthy system of properly funded private pension arrangements, which is much better than in most other advanced countries.

Secondly, the public sector has avoided making the bogus promises that have brought state social security arrangements into such disrepute in many other countries. We have not been trapped in the seductive politics, but dangerous economics, of the chain letter, which has bedevilled state pension arrangements in other countries. Ending the link between the basic pension and earnings and linking it solely with prices has been crucial.

Thirdly, in this country we do not face the dramatic demographic change that is in prospect for some other advanced western nations. Although there will be an increase in the number of old-age pensioners in the 21st century, I think that it is manageable. I do not think that it is, of itself, a reason for crisis measures. The Government surely should base their approach to pensions policy on the fundamental principle that we in the Conservative party believe that it is best that claims on future resources should be registered in the form of private contracts wherever possible. I appreciate that one could not imagine that slogan on the blue baize of the Conservative party conference platform--it might need to be put rather more crisply--but it is a fundamental principle.

It is better if people's claims on the resources on which they are to live in retirement can be registered through the ownership of private assets-- through their personal pensions, savings or occupational pensions. That is more reliable than relying on the state's promise that it will tax future generations to pay for pensions.

Mr. Frank Field : The hon. Gentleman promised that he would be controversial. At what part of his speech will that start?

Mr. Willetts : One of the other pleasures of serving under the hon. Member for Birkenhead on the Social Security Select Committee is that occasionally he comes up with ideas so radical and imaginative that we Conservative members find ourselves acting the role of the boring old greybeards. I know that we have in prospect an exciting pamphlet for him on pensions policy, which may be an example of that.

Mr. Page : If my hon. Friend wants to be controversial, I find some of his remarks extremely controversial. His laid-back approach towards the demographic profile is unwise and unjustified. If I were him, I would be exceedingly careful about projecting that profile as a solution to our future.

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Mr. Willetts : I will not detain the House with a learned debate on the nature of the demographic change confronting the country. Suffice it to say that, in the 1960s and 1970s, we had an age-dependency ratio rather worse than the average for OECD countries. In the next century, we face the prospect of an age-dependency ratio rather better than that in other advanced OECD countries. That subject is obviously being discussed at the G7 summit this week, and quite rightly so. Anything that can be done to shift the burden of pension provision from the public to the private sector makes sense, but we do not face the sort of demographic crisis which confronts countries such as Japan.

I hope that, in his concluding remarks, the Minister will range also into the wider aspects of the debate on occupational pensions. We look forward with keen anticipation to his first speech from the Dispatch Box--the first of many, no doubt. As occupational pension provision is covered by the estimate, I hope that he will give a signal to the occupational pension industry, which is seeking clear guidance on what will happen to the pension age.

Almost all experts agree that the case for equalising the pension age at 65 is unassailable. That is widely accepted. I have not come across a single expert on social policy who, if he were given £3 billion by Father Christmas, would spend it on pensions for men aged 60 to 65. That is not a sensible priority. It is much more sensible to move towards a higher equal pension age of 65 for women. That is the trend in other advanced western countries and I hope that we shall participate in that trend.

I hope also that there will be progress on establishing an age-related bonus for people who opt out of the state

earnings-related pension scheme. To achieve success in encouraging people to opt out of SERPS and to take out personal pensions, a sensible framework of incentives is required. That means that the incentives have to be age- related. I hope that we shall hear more on the encouragement of personal pensions.

I am concerned that the personal pension regime will experience the same difficulties as the Government's policy on share ownership. They had enormous success in spreading share ownership more widely, but insufficient success in making that share ownership deep. Similarly, the Government have had enormous success in increasing the take-up of personal pensions--5 million new personal pensions have been taken out. But those personal pensions need to be substantial. They need to be deep and valuable investments. That means encouraging employers wherever possible to contribute to personal pensions.

I have been told by people in the industry that, at the moment, group personal pensions, which would provide the right incentive for employers to contribute to personal pension arrangements, are virtually impossible to organise in Britain because of the absurd regulations under the Financial Services Act 1986. It would be marvellous if encouragement could be given to group personal pensions as a way of ensuring that personal pension provision was deep as well as wide.

I hope that the important connection between the occupational pension provision and the tax regime will be recognised in this debate. Having served for several years as the Chancellor's PPS, the Minister is in an ideal position--I can see him perking up--to have a broad view and to bring together the fundamental considerations of tax policy and those of pensions policy.

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Is it right, for example, that tax rules oblige people when they retire to take the full income from their occupational pension immediately? There might be a lot of sense in allowing people to take a rather lower income initially and to continue to accumulate savings in their pension scheme so that if later they need nursing home provision or greater social services provision, they can take a higher pension. I hope that, in his keenly awaited debut, the Minister will be able to address some of those questions.

6.42 pm

Mrs. Jane Kennedy (Liverpool, Broadgreen) : As my hon. Friend the Member for Birkenhead (Mr. Field) will confirm, I am too new a Member of the House to remember the beginning of the Select Committee's review of pensions. When I joined the Committee last October, many months of work had already been completed.

First, let me echo the welcome that has been given to the establishment of the pension law review committee, which I suspect has given rise to a sense of relief among those serving on the Select Committee. Had the Government not accepted the case for the establishment of that committee and had we been committed to doing the work ourselves, I for one would have felt many years older by now.

I have been comforted by the fact that members and non-members of the Select Committee alike have confessed to finding the subject complex. I enjoyed our interview with Sir Peter Webster two days ago. Sir Peter was able to tell us little--in fact, he came to tell us how little he could tell us, as it is in the nature of his job as mediator that he shares confidential information with the parties between whom he is mediating--but he did tell us that this was the most complicated affair that he had encountered.

I may not feel any less at sea, but it is a comfort to know that others also feel at sea in this very complicated affair. I commend Sir Peter's appointment as a mediator. I wish him success in his endeavours, and I feel that his role will be vital in persuading those who hold disputed assets to seek resolution of the disputes rather than allowing the matter to drag on in the courts. The criminal aspects of the affair have greatly curtailed the work of the Select Committee and have caused us problems. I shall not refer to those aspects except to say that, as a member of the Select Committee, I am very concerned about costs. Thousands of hours are being spent by lawyers, receivers and administrators and their support staff on work that is clearly essential, and it is worth putting on record the real fear that the money being recovered on behalf of the various creditors--not just the pensioners--is being quickly eroded. As my hon. Friend the Member for Birkenhead explained, he estimates that the figure will reach £50 million. I think that that is a conservative estimate, although I hope that it will not greatly exceed that.

There are one or two people who regularly attend our open sessions, whose faces tell their own story--I refer to the representatives of the pensioners, who listen carefully to the comments of those whom we interview. I can see Mr. Ken Trench--the chairman of the Mirror Pensioners Action Group--in the Gallery, listening carefully to our debate.

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