House of Commons Hansard Debates for 8 Jul 1993

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We interviewed representatives of Price Waterhouse, Robson Rhodes, Buchler Phillips and Arthur Andersen--the four agencies referred to by my hon. Friend the Member for Birkenhead. We know the fees that are being charged by those four reputable and highly thought- of companies--fees no doubt commensurate with their standing--and I get the impression that the pensioners are not yet convinced that the labourers are worthy of their hire.

The people representing those four agencies must be able to demonstrate not just to the Select Committee but to the pensioners that the work that they are doing justifies the costs that they are bringing in this case. They have some way to go in doing that, although I particularly commend the representatives of Arthur Andersen, who have impressed me by the openness of their approach and their readiness to share with us the details of their work. As a member of the Select Committee, my second concern is about the recovery process being undertaken in relation to Maxwell Communications Corporation. It became clear that the Law Debenture Corporation, as trustees for the pensioner group, is not being given observer status on the creditors' committee.

I accept that there is not an organised conspiracy among the other creditors to keep the pensioners' representatives off the committee ; however, the thought that, in trading the millions and millions of pounds worth of debt related to this whole sorry affair, major banks--including Barclays and banks in America--are swapping places on the creditors' committee at a time when representatives of the pensioners cannot participate in it, leaves me with a bad taste in my mouth. I hope that that can be rectified in tbe near future. I should like to touch on the situation in the north-west, where almost every constituency has pensioners or deferred pensioners who are affected, either directly through the Mirror Group or through the hundreds of other companies that Maxwell bought up.

As a member of the Select Committee on Social Security, I put on record my thanks to those hon. Members of all parties in the north-west who have worked to represent pensioners, although few pensioners in my constituency were affected. I am grateful to other hon. Members for the knowledge and expertise that they have brought to this matter.

I do not wish to score a political point, but Robert Maxwell did not lay the ground rules as to how pension funds could be raided. I hope that the Government will take that on board in their dealings with the pension funds of the state enterprises that they currently own and are considering privatising.

6.50 pm

Mr. Mark Wolfson (Sevenoaks) : I would describe myself as one of the lay members of the original Maxwell pensioners group of Members of Parliament. More than 100 of us were active immediately the situation arose. Since then, much work has been done, particularly by the hon. Member for Birkenhead (Mr. Field) and by my hon. Friends the Member for Hertfordshire, South-West (Mr. Page) and for Dover (Mr. Shaw). On behalf of my constituents, I should like to thank them for their continuing work and assiduous approach.

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I have a number of pensioners from a variety of Maxwell companies who were subjected to his blandishments, not only through written submissions to them when he took over their companies, but by his video film, which encouraged them to think that he, of all people, would look after them from the cradle to the grave. They faced an appalling situation and there has been real progress since those early days by the Government and the agencies that they established to deal with the problem. I congratulate my right hon. and hon. Friends on that action.

Many points have been well covered in the debate and I shall not go over them again except to emphasise what has already been said : that the standing of the City took a terrible beating by the Maxwell example and it behoves the City to continue to play a full part in righting that wrong. The standing of particular companies in the City also took a beating, as did that of individuals. I support the strictures of my hon. Friend the Member for Dover concerning individuals who should not be running companies where they clearly carried out wrongdoing over the Maxwell pensions.

Equally, in addressing the broader issue of pensions, it is important that, ultimately, the independence of more trustees on pension funds from the companies whose pensions they are running is established. It is difficult for staff representatives, for example, or company directors, who may also be pension trustees, to stand up against even more powerful people in a company who may wish to take action that is not correct in pension terms. I ask for a better balance in trustees.

I used to work for Hambro's bank. All of us, as prospective pensioners, were grateful for the good offices of the senior people there who were trustees of the fund, because they handled it extremely well. We want to keep them doing that, but we also need to take action to deal with those who may not handle pensions properly. That needs to be covered for the future.

As I said in an intervention, hon. Members cannot rest easy until all those pensioners receive restitution in full for what they are owed. By that, I mean not only current pensions, but pensions in the future. The roll-up of interest would have enabled those pension funds to keep pace with increases in the cost of living, or other commitments that those pensions had in them when people joined them in terms of improvements over the years. These are big targets to achieve, but I believe that, on the progress achieved so far, their achievement is not out of our reach.

I congratulate the Government on their action so far. I welcome my hon. Friend the Minister who is to make his first contribution on this important issue. I hope that he will prove to us that the Maxwell pensioners' future will be safe in his hands and those of his right hon. and hon. Friends.

6.55 pm

Mr. Paul Flynn (Newport, West) : I shall resist the temptation to be sycophantic towards the Government. That will not be difficult because, with the exception of the hon. Member for Havant (Mr. Willetts), Conservative Members have spoken with an air of complacency and self- satisfaction which is misplaced.

The hon. Member for Havant valuably suggested that the demographic time bomb will not be as great as expected. At most, it will occur for a 10-year period, and after that there will be no problem. But that demographic

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time bomb was the reason that the Government degraded SERPS. The Maxwell pensioners, the deferred Maxwell pensioners and everyone else are now in considerable peril. The great problem is that the Select Committee's report might well dissuade people from some of the advantages of occupational pensions and put them into the difficult waters of personal pension schemes.

Conservative Members have boasted about the 5 million in those schemes. When 4 million were in the schemes a distinguished actuary, Bryn Davies, said that at least 1 million had been persuaded against their financial interests and they should opt back into SERPS. Neither the Government nor anyone else will advise them on that. The situation is far worse today. I gave examples of those who have not kept up their contributions. We know about only a tiny group in one quarter of last year who had been in schemes for fewer than two years. Of them, 44,000 have allowed their schemes to lapse. They have no personal pension scheme, no SERPS and no occupational scheme. They can look forward to the future with fear.

Choice is a fine thing, but it means nothing unless one can make an informed choice. It is virtually impossible to make the choices that are necessary now. On joining a personal pension scheme, the first matter to consider is age. Generally, a lower age should be a great advantage. Last week, the distinguished firm of actuaries Bacon and Woodrow produced the valuable expert calculation that the pivotal age was 47 for men and 39 for women. Even more valuably, it went through what advice was on offer from the insurance companies. That varied from 40 to 52 for men and 30 and 47 for women. That means that on that crucial decision, on the so-called best advice, many women will be going into pension schemes nine years too soon and others eight years too long.

But age is not the only factor when deciding whether to join the scheme. Other decisions and calculations have to be made that are impossible for a lay person. On the question of terminating contributions to a personal pension scheme--a serious matter because the schemes have been in existence for only a short time, a maximum of six years--Bacon and Woodrow said that many firms are charging two years' premiums for people to pull out. Those who have been bribed to come out of the scheme by all kinds of incentives, by attacking SERPS and denigrating its value, find themselves in that dilemma. A fortnight ago, a financial adviser from Independent Financial Services in Paignton, Devon, gave a typical example of that. It is a remarkable story. He wrote :

"We are acting for a client who effected an Albany Life retirement annuity seven years ago for a monthly contribution of £40. So far the value built up within the contract amounts to just over £4,100. The client wishes to transfer, because of changes in his circumstances, to another fund provider. The transfer value offered him is £2,700. A huge £1,400 is being deducted by the existing provider.

The firm concerned asks how the company could justify the equivalent of three years' contributions from a retirement annuity that has been in force for just seven years. It asks :

"Do the financial advisers selling Albany's products realise how high the charges are?"

The implications of that question are serious, because companies such as Albany Life are giving advice.

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On Monday, while I was driving to the House of Commons, I heard a splendind programme, "Money Box", on which a man rang in to describe his situation. I was so surprised to hear it that I checked with the producers of the programme to see whether the figures given where right.

The firm that the person described was a reputable body, the Scottish Amicable Life Assurance Society, which was behaving in a rather less than amicable way with him. He is in business on his own ; he took out a flexible retirement plan and paid £3,000 in the first year. He had trouble in the second year with the recession and his contribution to the flexible plan was £1,500. He has just discovered that the society deducted commission of £1,700 from the total because he had disturbed the scheme. That is little short of criminal, but it is not unusual.

Virtually all the 5 million people who joined personal pension schemes have seen almost the whole value of their bribe, the initial contribution given to them, disappear in the first year as a result of commission charges taken by commission-hungry salesmen and by administration charges. The pensioners' funds are virtually worthless after that period. They will live to regret their decision to join the personal pension scheme.

They will not look back with satisfaction, although the hon. Member for Dover (Mr. Shaw) claimed that they would. By joing such personal pensions, they have been cheated out of SERPS, which was a sound scheme, which could have been amended and which would have got through the demographic changes in the next century.

We have a generation of people who should be looking forward to their retirement and to an income that is assured. Instead, there are 5 million people who are not looking forward to a pension scheme--they are not pension schemes--but who are contributing to saving schemes with no assured outcome. They cannot work out what changes there will be in the stock market by the time they retire. They could lose dramatically. We have a generation of people on personal pensions who can look forward to an uncertain future and a future of fear about their finances in their retirement.

7.2 pm

Mrs. Llin Golding (Newcastle-under-Lyme) : I welcome the hon. Member for Richmond, Yorks (Mr. Hague) to his first debate as Under-Secretary of State for Social Security. I think that I have worked out the significance of my hon. Friend the Member for Birkenhead (Mr. Field) immediately transferring him back to the Treasury team ; it was to remind him to bring money.

This evening, the Government should take the reputed advice of the Foreign Secretary and do something for once just because it is the right thing to do. They should give justice to the victims of the massive Maxwell fraud. The members of the Maxwell pension schemes, especially the majority who are not yet pensioners, need us to continue to give attention to their plight. They are concerned that the impression is being given that their problem has been solved. That is far from being true.

I congratulate the Select Committee and especially its Chairman, my hon. Friend the Member for Birkenhead, on their continuing effort to obtain justice for the members of the Maxwell pension scheme. The Maxwell Pensioners Action Committee is anxious that we and the public understand that enormous problems remain.

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Those problems are the failure so far to recover the assets taken from the pension funds by Maxwell, which found their way into the banks and other financial institutions, the refusal of the insurance companies to settle the claims from the trustees, the difficulty of sorting out who is entitled to what from the common investment fund, uncertainty about section 58B settlements and the bulk transfer claims, such as that undermining the AGB scheme. One trustee pointed out that the returns so far have been small and has put the amount still outstanding at £440 million. He points out that pension funds that are being wound up need even greater assets than those that are continuing.

A considerable amount of the assets taken by Maxwell has been tracked down- -to the value, I am told, of £188 million. However, it is one thing to discover where the money is and another thing to get it back. Except for NatWest, the banks and other financial institutions holding assets given as security against loans are reluctant to part with them.

The trading debt has increased the difficulties. Whatever the rights and wrongs of the situation, one thing is certain. On present form, the matter will take a long time to settle. No writs of claim have yet been issued by the trustees. The insurance companies appear to be adamant that they will not pay up the £75 million claimed by the schemes because of material non-disclosure. As the action group put it, that amounts to saying :

"fraud was going on at the time of the renewal. You did not tell the institutions about that fraud. Therefore the policy is void and you cannot claim for the fraud."

As I have said, there is even difficulty about the allocation of moneys in the common investment fund, although it is thought that that will be sorted out fairly shortly. I have been told that there are difficulties with the implementation of section 58B of the Social Security Act 1990 which makes any deficiency in pension funds that have to be wound up a debt on the employer company. Will the Minister clarify what payments have been made when he winds up the debate? Given all the problems that threaten the viability of the Maxwell pension schemes, is it any wonder that those who depend on them, especially the deferred pensioners, are so worried? Their worries were not dispelled when they read that the trustees of the various Maxwell pension funds had told the Select Committee that they were guardedly optimistic that, within three to five years, recoveries would be sufficient to cover in full the pensions of all current pensioners and those of most deferred pensioners.

Those pensioners ask the obvious question. What happens until the recoveries are made? What about the annual increases? Which deferred pensioners will not be covered? What happens if, as at least one trustee believes, the hopes expressed by the other trustees are too optimistic? Whether one takes an optimistic or pessimistic view, it is clear that there is an obvious need for the Government to give substantial further aid.

Some help has been given by the Government which has been acknowledged by many hon. Members who have spoken tonight. A £2.5 million grant was initially given to tide over the funds, but that has now all gone. Help is now being given from a trust fund which was created under the chairmanship of Sir John Cuckney, to whom tribute has been paid by many hon. Members tonight.

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The fund has raised just over £6 million from outside voluntary donations. When it was established, the chairman of the National Association of Pension Funds, Brian Macmahon, said :

"We hope that the trust fund will grow to make up most, if not all, of the eventual shortfall in the Maxwell funds."

I am afraid that the City has not been very generous.

The Secretary of State announced the deferral of state scheme premiums to the national insurance fund in respect of the payment of guaranteed minimum pensions for as long as he is satisfied that "it would not be in the best interests of scheme members to enforce payment."

A press release claimed that that was equivalent to an interest-free loan of £100 million. However, according to outside experts, the value of that depends on whether it means postponement until after the l give nothing new--certainly not £100 million. To be helpful and for it to be something more than a public relations exercise, the Minister must defer payment until the needs of the deferred pensioners have been met. As the Minister has been asked by his hon. Friend the Member for Rutland and Melton (Mr. Duncan), what is the situation? The Minister must clear this up today. If the Government's claim to have lent £100 million interest- free proves to be wrong, there is even more reason why we should question their refusal to do more to clear up the unholy mess.

The position of the Secretary of State has been clear from the start. He claims that no Government could accept a duty to make good losses resulting from fraud or theft of savings. Ministers have added the argument that in any case, if they were to underwrite those pensions, the banks and others who hold vast sums in security against loans would be under less pressure to make settlements. These arguments understandably are rejected totally by pension scheme members. They hold the Government to be as responsible for the loss of their savings as they were for those of the Barlow Clowes investors--who, incidentally, received £160 million.

The Government were responsible in two ways. They provided a useless system of controls and failed to implement an EC directive. On the first point, there can be no doubt that their dogmatic and doctrinaire encouragement of the self-regulation of the occupational pensions sector proved to be a disaster. Given the massive potential for fraud which Maxwell exploited, there is no justification for the self-regulation of the conduct of pension funds.

The Securities and Investments Board report showed that the Investment Management Regulatory Organisation's involvement with the Maxwell companies both before and after Maxwell's death was woefully inadequate. The SIB has not for legal reasons published the whole IMRO report. When it does so, pensioners believe that it will establish even further the responsibility of the Government. The second reason for holding the Government responsible for the plight of Maxwell pensioners is their refusal to implement Community directive 80/987 of 20 October 1980, which requires, among other things, that EC member states ensure that necessary measures are taken to protect the pensions interests of ex-employees. I know that the Government will argue that they have

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complied because there are provisions in the Insolvency Act 1986 and statutory instruments that provide for the protection of contributions to pension funds. But these do not give required statutory protection for pension benefits. In view of that neglect, the pensioners are determined to get justice from the EC if they do not get it from the Government.

Ministers will know that the European Court has made it clear that, if the Government have not implemented the directive, the employee is entitled to damages. They will also know of the several thousand petitions that were handed to the President of the European Commission in Strasbourg in January, and that Ivy Needham has now been awarded legal aid on appeal to have her case for damages against the Government prepared for presentation to the European Court. What nonsense it is that Ivy Needham, for a pension of £52 a month, should have to expose the incompetence and callousness of the Government before she can obtain justice.

The culpability of the Government is clear. They share with Maxwell responsibility for the disaster. Clearly, had they not been blinded by their phobia of giving protection to employees, that would not have happened. They ought now to be doing everything that they possibly can to remove the anxiety from the members of the Maxwell pension scheme and to enable them to have a secure retirement. The Government must make it clear during the period of recovery of the missing money that they will make resources available to cover the pensions. Their argument that the financial institutions would be less likely to pay up does not hold water. Those banks, insurance companies and other institutions would be far more likely to pay up if they were faced by trustees who were actively supported by the Government. The need for the Government to accept responsibility goes to the heart of the matter.

I am told, however, that there are other smaller actions which the Government could take to give help to trustees. One is to reduce even further the difficulties of the trustees in obtaining information from the liquidators and others to tackle the problem of VAT payments for schemes where the company has gone into liquidation.

I know that the reference to the Occupational Pensions Advisory Service on the Order Paper is a peg on which to hang a wider debate. However, I would not like to miss an opportunity to thank that organisation for all the work that it is doing and particularly to those volunteers who do so much good work and give so much of their time and effort.

A reference to occupational pensions in general is also included on the Order Paper. I will not, however, repeat all that I have said previously about the need to provide security for and meet the legitimate aspirations of members of pension funds. I await the report of the Goode committee with great hopes that it will end the scandal of employers who milk pension funds for their own purposes without care for their employees and of the Government who let them do it. In the meantime, I appeal to the Government to give help to those who suffered and still suffer from the Maxwell disaster.

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7.16 pm

The Parliamentary Under-Secretary of State for Social Security (Mr. William Hague) : This has been a wide-ranging and interesting debatewith some fascinating features. Foremost among them was the fear of the hon. Member for Birkenhead (Mr. Field), who opened the debate, that it might degenerate into excessive sycophancy. A non-partisan atmosphere prevailed through most of the debate, despite the attempts of my hon. Friend the Member for Havant (Mr. Willetts) to inject some acrimony into it. In the end it took the Opposition spokesman, the hon. Member for Newcastle-under-Lyme (Mrs. Golding), whom I thank for her welcome to the Front Bench, to bring some real acrimony into the debate.

Hon. Members on both sides of the House may think on reflection that to allege that the Government share with Robert Maxwell the responsibility for the problems of Maxwell pensioners is an allegation too far. It is certainly one that I wish to reject at the outset. The debate has also been interesting because some hon. Members have spoken up strongly on behalf of their constituents. I respect them for doing so.

Some called on the Government not to do certain things as well as to do certain things. One or two called on the Government to adopt a certain policy but not to say so--a requirement that presents particular challenges for me in making a response from the Front Bench. But I shall do my best in the time available to respond to some of the points that have been made.

The debate has highlighted some difficult issues and several aspects of occupational pension provision in which many right hon. and hon. Members believe that there is a case for changing the law. Not surprisingly, much comment has focused on the position of the Maxwell pension schemes, and I shall dwell on the Maxwell affair in some detail in a moment.

It is worth remembering that the debate also takes place against the background of greatly expanded pension provision in Britain in recent years. The growth of occupational pension schemes has been of huge importance in lifting the living standards of the average pensioner well above the levels in the 1960s or 1970s.

That is why the questions raised in the debate tonight are so important and why issues surrounding the future of occupational pension schemes--whether it be the equalisation of benefits for men and women, freedom of choice in pension provision, or the framework of regulation and law within which pension schemes operate--deserve detailed and careful consideration.

The Government have clear objectives for the future of pension provision. They include encouraging individual responsibility and enabling the working population to make adequate financial provision for retirement ; encouraging freedom of choice between alternative forms of pension provision ; ensuring equality between men and women following the decision of the European Court of Justice in the Barber case ; and improving the security of pension rights in response to the widespread and wholly understandable public concern in the wake of the Maxwell affair.

Before I deal with what should be done in future, I remind the House that in recent years we have taken some significant steps in the direction of achieving the objectives that I have outlined. We have given individuals the right to opt out of their employer's occupational pension scheme,

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to make voluntary contributions to improve their pension provision and to contract out of SERPS into an appropriate personal pension. The hon. Member for Newport, West (Mr. Flynn), who sadly is not with us for the moment, criticised the history of personal pensions. I draw the hon. Gentleman's attention and that of the House to a leaflet, entitled "Thinking about a Personal Pension", which was launched by my right hon. Friend the Secretary of State a couple of weeks ago. It was widely unpublicised despite the best efforts of the Department of Social Security. However, for all those contemplating a personal pension, it is well worth reading.

Millions of people have used the opportunity presented by personal pensions to enhance their pension provision in a way that they could not have done before. In addition, we have tried to ensure that individuals can make a more informed choice about their pension provision.

We may have further to go, but we have introduced regulations which place a statutory obligation on schemes to provide greater disclosure of information and there are more controls to provide for secure pension provision. Since 1990, employers have been unable to take taxable refunds from scheme surpluses if they have not first guaranteed pension increases in line with prices up to a maximum of 5 per cent. a year.

Regulations now restrict to 5 per cent. the amount that pension schemes can invest in associated or connected companies and individuals can now obtain more help if they are dissatisfied with their pension provider. I join the hon. Member for

Newcastle-under-Lyme in paying tribute to the work of the occupational pensions advisory service, which represents extremely good value for money for the grant in aid that it receives from the Government. It has now been given secure financial backing and the first pensions ombudsman was appointed in April 1991 to provide an independent avenue of redress for people who have suffered injustice at the hands of their pension schemes.

The pensions registry has been set up to help scheme members trace past pension rights. The schemes must pay a levy which pays for the register and for consumer protection measures like the ombudsman. Considerable progress has been made on these issues, but I recognise that the principal concern expressed by all hon. Members has been the Maxwell affair and its aftermath.

The Government welcome the Social Security Select Committee's continuing interest in the recovery of the Maxwell pension schemes' assets. We share its concerns over the plight of the pensioners and the need for the recovery process to move rapidly towards a conclusion. I understand the anxiety that Maxwell pensioners suffer thinking about the uncertainty of payments in future. The hon. Member for Morley and Leeds, South (Mr. Gunnell) referred to that anxiety. It is a considerable tribute to the hon. Gentleman's constituent Ivy Needham that, although I have not yet met her, her name is very familiar to me after only a few weeks in office.

The hon. Member for Morley and Leeds, South asked whether I would be prepared to meet Ivy Needham and other Maxwell pensioners in Leeds. In a way, that will save me writing a letter, as I was about to write to Ivy Needham to tell her that I would be very happy to meet her and her colleagues in Leeds. They are allowed to shout at me as much as they like, because I understand how strongly they feel about these matters.

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The Government's response to the legacy of chaos left behind by Robert Maxwell has helped to facilitate considerable progress. We do not want--and have not tried--to give the impression that the problem has been solved. The hon. Member for Newcastle-under-Lyme referred to that impression. The problem has not been solved. However, the initiatives that we have taken have ensured that pensions continue to be paid while work continues to recover the missing pension scheme assets.

Last summer, we made available £2.5 million in funding, which the hon. Member for Birkenhead rightly insisted on calling taxpayers' money. I only wish that he could sometimes make those on the Opposition Front Bench as conscious as he is that Government money is taxpayers' money. We provided that emergency funding last year to help pension schemes pay pensions.

That role has now been taken on by the Maxwell pensioners trust which we set up under the chairmanship of Sir John Cuckney. The trust has raised more than £6.3 million--enough money to pay pensions for another three years. We have therefore created a substantial breathing space for the pension schemes to make further asset recoveries and to pursue such other claims for damages or against employers as the trustees and liquidators think fit.

Last October, my right hon. Friend the Secretary of State announced a further important measure to help the Maxwell pension schemes when he agreed to use his discretion to defer the collection of state scheme premiums. It may be helpful if I say a few words about that, because several hon. Members, including the hon. Member for Morley and Leeds, South and my hon. Friend the Member for Aylesbury (Mr. Lidington), have raised that point.

Currently, three of the Maxwell pension schemes, representing two thirds of all pension scheme members affected by Maxwell, have contracted back into the state earnings-related pension scheme. Currently some £2.7 million of annual pension entitlements of those scheme members are being met through SERPS. Those sums will increase as more pensioners reach pension age.

My right hon. Friend the Secretary of State has exercised his discretion to postpone collection of the state scheme premiums that would normally be payable and which, for those three schemes, amount to some £100 million. That is important additional assistance to rebuilding the Maxwell schemes, particularly in the shorter term. As long as my right hon. Friend is satisfied that it would not be in the interests of scheme members to enforce payment, he can choose not to do so, but it would be quite wrong, and a considerable mistake on the Government's part, to give general guarantees or blanket assurances. I would not want scheme trustees to think that they can relax their efforts to achieve anything less than the maximum possible restoration of their assets. We will continue to discuss the exercise of that discretion with scheme trustees on a scheme-by-scheme basis. However, we have no intention of enforcing the payment of state scheme premiums automatically when a scheme has covered its liabilities for pensions in payment.

As a result of the Government's initiative, the pension scheme trustees and the liquidators have not been left to untangle the web of confusion woven by Robert Maxwell alone. They have at their disposal the considerable services of Sir John Cuckney. Many hon. Members have referred to his outstanding work, and they were right to do so. He and the Maxwell pensions unit continue to encourage

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informal methods of dispute resolution, such as mediation, rather than lengthy and costly legal action in the courts. The Maxwell pensions unit continues to be available to assist the pension scheme trustees and the liquidators and administrators in any way it can. Hon. Members have complimented civil servants on their good work in managing the Maxwell pensions unit. I can reassure those who raised the matter that the return to his native Department--as one hon. Member put it- -of the civil servant heading the unit does not imply that the unit is ceasing its work. I expect its work to continue for some time. It is in very capable hands. The civil servant in question has become one of the trustees of the Maxwell pensioners trust and he will continue his work in that way.

Over the 18 months that have elapsed since Robert Maxwell died, I am well aware that the long-term position of some of the pension scheme members remains uncertain. However, we have made visible progress. The Headington pension plan, for example, which was unable to make any pension payments, has been able to resume paying 75 per cent. of its pensions. The remaining 25 per cent. continues to be provided by the Maxwell pensioners trust. For the longer term, the pension scheme trustees recently told the Select Committee that they were now guardedly optimistic about meeting their pension liabilities in full.

The Select Committee expressed concern in its report on the length of time that was being taken to release funds to the pension schemes from the common investment fund. Sir John and the MPU have given active encouragement to the trustees and liquidators who have recently been able to agree each scheme's minimum share of the £173 million currently held in the common investment fund. The minimum shares in total add up to 80 per cent. of the fund leaving only 20 per cent. in question.

That has enabled an initial advance of some £16 million to be made to the pension schemes and it has provided the first step in the solution to this problem. I hope that agreement will soon be reached on resolving the remaining issues. That will enable a full allocation of the common investment fund to be made and will clarify the long-term asset position of the schemes.

Some hon. Members referred to the gap and wanted to know what will happen when the extent of the gap is clarified. However, it is still too early to say what the gap will be. A substantial amount of work remains to be done. The Maxwell empire kept appalling records of what had happened to different transactions ; they wove a very complex web.

I join the chairman of the SIB, who appeared before the Select Committee yesterday, in urging City institutions to resolve speedily disputes over pension scheme assets. I hope that all parties involved will work constructively with the trustees and the liquidators over the next few months to secure a speedy resolution of all these complex claims.

Mr. Frank Field : Would the Under-Secretary support the SIB if it paid over the fines of City institutions to the Maxwell pension fund?

Mr. Hague : All that I am prepared to say for the purpose of this debate is that I very much support what the hon. Gentleman said about urging everyone to come to a resolution as speedily as possible. For tonight, I must leave

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it at that. I know that other hon. Members wish to intervene and I do not wish to take too many minutes of the time that hon. Members are hoping to spend on education matters.

Clearly, there is much work still to be done before the pensioners' distress and anxiety can be relieved. The Government will continue to support Sir John Cuckney in his efforts to bring a speedy conclusion to this affair.

The Maxwell saga has contributed to the raising of wider issues about the regulation of pension funds, many of which have been touched on in this debate. The Goode committee is continuing its review of the framework of law and regulation within which occupational pension schemes operate. The Government look forward, as I am sure does the rest of the country, to receiving that report towards the end of September.

Some hon. Members, including my hon. Friends the Members for Sevenoaks (Mr. Wolfson) and for Hertfordshire, South-West (Mr. Page), put strong views about what should happen after that. It would be wrong of me to second- guess that committee's recommendations or to comment on proposals that might pre-empt the committee's careful consideration of these important and complex issues, but the Government look forward to receiving and studying the report and hearing the comments of right hon. and hon. Members on both sides of the House on its recommendations.

Within the lifetime of this Parliament, the Government and the House will need to take a number of decisions about different aspects of occupational pensions. Taken together, they will have far-reaching implications for tomorrow's work force, for future pensioners and for society as a whole, as we grapple with the consequences of demographic change. No doubt the Select Committee will play its part in helping us to cope with the intricacies of these decisions. There are many things that we need to do. We must legislate for equal state pension ages for men and women. Once the European Court of Justice's decision in the Coloroll case is available, we will need to address the implications for occupational pension schemes and take account of the consequences for contracting-out arrangements. Meanwhile, we are committed to ensuring that personal pensions remain attractive across the age range, and we are considering a structure of age-related rebates to achieve this. We also want to take into account recent work on the treatment of pension rights on divorce--a very important subject in its own right.

We shall be seeking to bring about a framework for occupational pensions which is stable, while allowing pension vehicles of various types to develop and flourish ; which is secure, in order to give people confidence, whatever type of pension provision they make : and which is fair to employers, employees, pensioners and deferred pensioners.

This has been a constructive, though short, debate and has been helpful in setting the scene and identifying some of the issues. We are all indebted to the hon. Member for Birkenhead and the other members of the Select Committee for the careful attention that they have paid to pensions issues in recent months, and for providing the opportunity for this debate.

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The debate was concluded, and the Question necessary to dispose of the proceedings was deferred, pursuant to paragraph (4) of Standing Order No. 52 (Consideration of estimates).

ESTIMATES AND SUPPLEMENTARY ESTIMATES, 1993-94 Class VII, Vote 8

Education Spending

[Relevant documents : First Report from the Education Committee of Session 1992-93 on The Department for Education's Expenditure Plans 1992-93 to 1994-95 (House of Commons Paper No. 305) and the Government Response thereto (House of Commons Paper No. 695) ; Report of the Department for Education and Office for Standards in Education : The Government's Expenditure Plans 1993-94 to 1995-96 (Cm. 2210)] Motion made, and Question proposed.

That a further sum, not exceeding £15,520,183,000, 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 the Environment on revenue support grant, on residual payments of rate support grants, on payment of non-domestic rates to receiving authorities in England, on a grant providing support to certain receiving authorities affected by changes in the calculations underlying revenue support grant as a result of population change, on a grant providing transitional support for certain local authorities, on a grant to compensate 75 per cent. of the expenditure incurred by them on preparation work for the council tax, on payments to specified bodies and the Commission for Local Administration in England, on payments for Valuation Office Agency rating and valuation services, on payments to meet the expenses of valuation tribunals, and on payments in respect of expenditure by the Local Government Commission.-- [Mr. Forth.] 7.35 pm

Sir Malcolm Thornton (Crosby) : This, of course, is a notable first for the Education Select Committee in so far as we have been able to secure our share of what is by any definition a very short period of debating time for two important subjects--the one about social security and now the one about education. I would like to see all Select Committee reports given time to be debated on the Floor of the House, so that the House would have the opportunity of sharing with the members of the Select Committees some of the evidence that they have received and the conclusions that they have drawn from that evidence.

I am particularly pleased to see my right hon. Friend the Secretary of State for Education on the Front Bench. With his customary courtesy, he dropped me a line to say that he had been able to rearrange an engagement for this evening as he was particularly anxious to share in what he, too, recognises as a notable first. I thank him for giving up what is, after all, a very precious Thursday evening when he could be elsewhere. I also thank my hon. Friend the Under-Secretary, who, I understand, will be contributing to the debate a little later.

Our report, which was published on 11 February 1993, followed the progression of reports which this Committee and its predecessor Committees made on Department for Education, formerly Department of Education and Science, expenditure. It follows, therefore, a pattern that

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