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Mr. Tim Smith (Beaconsfield): I listened with concern to what the hon. Member for Liverpool, Broadgreen (Mrs. Kennedy) had to say about the apparent failure of some local authority employers to encourage their women employees to join occupational pension schemes, because I am an enthusiastic supporter of such schemes and believe that all those who would benefit from them should be encouraged by their employers to join them.

Occupational pension schemes have been hugely successful over the years. The remarkable fact is, as my right hon. Friend the Secretary of State said at the outset of the debate, that today, 70 per cent. of those who retire do so with the security of an occupational pension. It is difficult to exaggerate the importance of that and the increased standard of living that comes with it. They have been hugely successful. I hope that they will continue to be so. They have also provided huge sums of money for investment in British industry, which is equally important. If one compares that with the situation in the rest of Europe, I hope that the whole House accepts just how successful those schemes are.

I support the Second Reading of the Bill because I think that the time has come for a comprehensive review of the legislation. It tended to be rather piecemeal previously. The Occupational Pensions Board was asked to look at this problem or that problem. The Maxwell affair prompted that comprehensive review. The Goode committee did an excellent job in looking at all aspects of schemes and has come up with something that represents a reasonable balance.

The most fundamental point--indeed, the only point--that I want to make in the course of my short remarks is about balance. It is a simple but important point. Different interests are involved in pension schemes. No pension scheme exists without the consent of an employer. They are all voluntary. They have to be funded by the employer, and clearly there is a balance between that and the interests of the members.

It is self-evident that whenever the House makes a regulatory change, that has an effect on the market. It is not possible to make a regulatory change that does not affect or influence market behaviour. What is happening in the market at the moment, even before the Bill has become law, is that most small employers setting up new schemes are choosing money purchase rather than final salary schemes. There are a number of reasons for that, one being low inflation. If there is low inflation, it is less important to give a guarantee of a final salary pension. Another reason is the sheer complexity of the present arrangements, especially the guaranteed minimum pension regulations, which are to be simplified.

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It is clear that regulatory burdens and the costs associated with them are important. The cost of funding a final salary scheme is uncertain, compared with the cost of funding a money purchase scheme--and cost is important to employers. That argument arises in discussions about surpluses. It is always the employer who is expected to fund any deficit, but when there is a surplus the members think that they have a right to the whole of it. That is an important point and it is relevant to what is now called the minimum funding requirement. There is a real concern about the additional costs that that will bring for some large, mature, closed schemes. We must consider that point in Committee.

I am also concerned about the effect that the requirement will have on the equity market. One reason--indeed, the main reason--why schemes were so hugely successful in the 1980s was that success was achieved on the back of a rising equity market. If there are regulations that push trustees into investing in gilts, that will be bad for the schemes because they will not be able to achieve the same growth in income, and it will also be bad for British industry, which will be deprived of funds. Therefore, it is important to achieve a sensible balance between the interests.

We all want to achieve the same thing--good occupational pension schemes for as many people as possible. However, we must be sure that in the process of trying to improve the benefits, we do not discourage employers from setting up schemes.

8.42 pm

Mr. Andrew Miller (Ellesmere Port and Neston): All sorts of people take risks with other people's money and we are dealing with one aspect of that today. Mention has been made of the Church Commissioners. The most recent report of the Social Security Select Committee uses strong language about one particular investment. It says that the best interpretation that it can put on the Church Commissioners' activities is that they displayed unbelievable naivety. That is very worrying. The spectrum goes from the seemingly responsible Church Commissioners, to the complex trust arrangements that exist in pension schemes, through to the great scandals such as Maxwell.

I do not think that Maxwell is a solitary case. I actually sailed down the river with Mr. Maxwell today, in the company of the Campaign for Pension Fund Democracy. Today's version of Mr. Maxwell was somewhat more inflated than the original and one journalist suggested that we should symbolically throw him over the side. However, as the Port of London authority was present, that was not thought to be a good idea.

I am concerned about some of the issues surrounding Maxwell, which I believe have been entirely missed in the Bill. On several previous occasions, as well as when I introduced a Bill in 1992, I made a point about the importance of takeovers. I understand that within the complexities of the Maxwell empire, the works pension fund represented dozens of companies that merged. The complexities of the merger process actually created an environment in which it was possible for Maxwell to slide off with some of the share certificates. Some of the detail of that is still before the courts.

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The process of takeover and the management of funds are remarkably important, but thus far they have been ignored in the Bill. In many cases, concern has been expressed about that issue. The most important case was Hanson v . Imperial Tobacco trustees a few years ago. There has been a series of similar court cases. The most significant one in which I was involved was the GEC takeover of Plessey. Some 14 firms of lawyers were appointed, representing all the various interested parties. Enormously large sums of money were spent on issues that should have been determined in statute--something that could have been tackled within the framework of this Bill. There have been many similar cases.

In the first attempted takeover of Plessey by GEC, I was responsible for negotiating on behalf of the staff side of the pension fund. I found myself in the most extraordinary position of receiving a phone call from the then company secretary--now long since deceased--the day before the Monopolies and Mergers Commission report was due to be published. He asked me to come urgently to a meeting because he wanted to settle all the outstanding issues stemming from the last claim submitted by the trade union side in respect of the triennial review.

Of course, from the point of view of the members that was a wonderful arrangement--but it could not be said to be the rational and constructive expenditure of the assets of the pension fund. It should have been dealt with in a much more carefully thought-out way. The whole mechanism revolved around how best to manipulate each side's benefit in the context of the takeover. That cannot be right. I could list nine different cases--but I will not--where the interests of members during the process of takeover have been disadvantaged by the manipulation of one party or another.

Thus in 1992, when I sought to introduce a private Member's Bill, the then Under-Secretary of State for Social Security wrote to me saying:

"I recognise and sympathise with the focus of your Bill to protect the rights of members of occupational pension schemes where a company undergoes a change of ownership. Coming as it does in the wake of the Maxwell affair it addresses the concern shared by us all that within the Maxwell group of companies ownership was changed, and pension scheme members were moved from one scheme to another, without regard to their long term pension security."

The Under-Secretary was exactly right in that paragraph and it is a great pity that that point has not been dealt with in the Bill. I hope that tonight the Government will say that they will take cognisance of that letter and that they will support any relevant amendments tabled in Committee. The relevance to all the schemes with which we are dealing is absolutely clear. It is not simply the Maxwell-type arrangement; it is necessary to protect sums of money in a more positive way.

At the time of my Bill the Government invited me to submit documentation to Goode, which I did. Goode referred to the takeover issue in one small paragraph. However, if we analyse the matter politically we must recognise that many of the issues of the Maxwell scandal could have been avoided. I urge the Government to rethink the matter.

The Government need to reconsider the whole question of member trustees. I accept that it is right for trustees to have a clear responsibility, not simply to the part of the population that elected them, but to the scheme in its entirety. There can be no doubt about that. It is difficult to explain to fund members that that is so. They say, "But

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I elected Mr. So-and-So; why can't I expect him to do as I say?" They cannot expect him to do so as he simply has responsibilities that are set out in the trust deed. That relationship is difficult to explain to the ordinary fund member.

What makes it more difficult, however, is that fund members say, "But this collective sum of money is defined by the trust deed, broadly speaking, and that pot of money is ours"--notwithstanding the quirks that give rise to circumstances where employers can partly be the beneficiaries of schemes. They say that European legislation or European Court decisions have decided that the money is part of pay. They ask why they cannot take broad control of that money within the constraints of the trust deed.

The arguments have been set out both by proponents of the 50 per cent. or more proposal tonight, and by supporters of the Government's position. If the numbers do not make any difference because the responsibilities are set out in the trust deed, the answer is that it is symbolic; something that the Government should concede. We should give members a feeling of a great deal more control over investment of the portfolio by increasing that number. It will provide a better basis for trust in schemes.

I could say a lot more, and I hope that some of the points are taken on board by the Government in the spirit that they are intended. We have gone a long way with the Bill. It is not good enough yet. I have set out one of the reasons for that in the context of my 1992 Bill. With some amendments, the Pensions Bill could potentially become an important piece of legislation that could develop support from hon. Members on both sides of the House. It could return us to the position in the early 1970s when the pension legislation was developed on a bipartisan basis. I hope that, in the long term, the House achieves that.

8.51 pm

Mr. John Greenway (Ryedale): I begin by declaring my interest of having worked in the insurance and pensions industry for 25 years. Most people tend to associate me with having been a former policeman, but it is 25 years since I left the police. Had I stayed, I could have retired next Wednesday, 3 May, and I would have received a police pension that no one would have funded by creating a pension fund. I can see that my right hon. Friend the Secretary of State for Social Security is amused that one so young could possibly be a pensioner as early as next Wednesday. That probably says more about the police pension age than anything else, but it is a fact. I want to make some serious points. Unfunded public sector schemes are a problem with which we must deal. The Committee will have to consider them when it debates the Bill's provisions on divorce. I should declare my interest in the industry. I sit on the Insurance Brokers Registration Council, which is one of the industry's regulatory bodies, and I am a salaried employee of the Institute of Insurance Brokers. None of those interests reflects greatly on what I want to say tonight, but, for good order, I mention them.

In 10 minutes or so, one cannot do justice to a Bill of about 150 clauses. It is probably the most far-reaching Bill affecting pensions for a decade or more. It has been warmly welcomed, both in the House and outside, but

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the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who I am glad is in his place, pinched my line because he prayed in aid the Child Support Agency. As I approached the Bill, the one thing that worried me slightly was my recollection of the universal acclaim for the Child Support Act 1991. I am therefore slightly reassured by the fact that the Labour party will vote against the Bill tonight, so we hear, although not for particularly sound reasons.

An important point has been made: that, in the euphoria of the dreadful events surrounding the Maxwell scandal, which has rocked many occupational pension scheme members to the core, and of the Bill, which attempts to deal with those problems, we will not keep a careful and detailed eye on all the issues in the Bill. The Bill's intentions are undoubtedly laudable but the eventual judgment will be based not on its universal acclaim but on whether and to what extent our objectives are realised.

Conflicts exist that we cannot ignore. We want to improve the security and the trusteeship of occupational schemes. I greatly welcome that. We want to secure benefits for pensioners, but the rules must not be so onerous as to discourage either occupational schemes or, if there is an occupational scheme, the choice of the right scheme. Defined benefit or final salary schemes have great advantages, but they require the voluntary agreement of the employer; otherwise, people will go for money purchase, which is less attractive, or more people will go into personal pensions and will not have an occupational scheme.

I carefully followed the Bill's passage in the other place. I warmly welcome the Government's response to it. Some of the changes that have already been made are clear evidence that they are listening to the genuine concerns, and I welcome their aim of getting the measure right.

I want to make two points about occupational schemes, the first of which involves compensation. When my right hon. Friend the Secretary of State made one of his statements about the Goode report--I think that it was the one about the Maxwell scandal--I said that we should not lose sight of the fact that more than half of all occupational pensions are funded not through a self-administered arrangement but are insured schemes. Insured pension schemes have the benefit of the Policyholders Protection Act 1975. We must be careful not to penalise insurance companies that are subject to the provisions of the Act. They should not have to finance a significant part of any levy to fund compensation.

The Government have not adequately responded to the genuine concerns of insurers, particularly those expressed by the Association of British Insurers on behalf of life offices, but that is something for the Committee to consider.

Reference has been made to the vexed issue of the minimum funding requirement. I pay particular tribute to my hon. Friend the Minister for Social Security and Disabled People, who has worked tirelessly on the matter, but I want to disappoint him as well as praise him because we have not got it quite right yet. He will know that a number of major employers with big schemes remain concerned about their commitments if the Bill, as drafted, is passed. British Airways is one of the companies that has expressed those concerns.

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A number of big companies' schemes are or are about to become closed schemes. They may suddenly find that if the solvency or minimum funding test is wrong on a particular day, they will be required to put more cash into a closed scheme with no facility to get the money out when, at some future date, it becomes clear that the extra money was not needed.

A number of suggestions have been made and, as usual, people go for the belt-and-braces approach whereas what we need is one or the other. Rather than having to invest more cash in such schemes, which have never had any difficulty meeting their obligations, I rather like the idea of either a bank guarantee or some form of subordinated loan. No doubt we shall discuss the matter in detail in Committee, but I nevertheless flag it as one of the issues that still needs some thought.

It has become obvious from the debate that there is a philosophical divide between the Government and the Opposition about how much we should rely on the state to fund pensions well into the next century and how much we can and should rely on the private sector. As the hon. Member for Glasgow, Garscadden (Mr. Dewar) said in his interesting speech, he has grave concerns about the ability of private pensions, especially personal pensions, to deliver what is required. I have no such doubts but I share his concern about mis-selling, which is my final point.

The Bill undoubtedly increases the trend towards personal pensions rather than the state earnings-related pension scheme. I have often said on public platforms that the Government should have been bolder with regard to SERPS five or six years ago. We have ended up with the feeling that SERPS will continue for a number of people, and we did not send a strong enough message as to what we had in mind. The point is that the work force of the future--I am looking 30 or 50 years hence--cannot afford to fund the commitments being entered into by this generation for future pensioners who have all the time in the world to make their own provision. We have to face the serious problem of the mis-selling of personal pensions that occurred when people transferred from an occupational scheme or, indeed, opted out of an occupational scheme or failed to join when they could have done so. I want to make it clear, as I have done a number of times--most notably at the Chartered Insurance Institute's annual conference in Aberdeen last September--that it is a scandal that we have to put right.

I cannot understand why some of the transfers and opt-outs were ever accepted by life offices. They, of course, would argue that they did not know in every case that there was such an opt-out or that there were a number of non-joiners. However, I am not convinced that we are going about resolving the difficulty in entirely the right way. I should like the issue to be explored in Committee because the Bill endeavours to put right mistakes that have been made on a number of fronts, and this is one issue that we cannot ignore.

The Personal Investment Authority has now set up its pensions unit. It will be run by Miss Joanne Hindle, who is well known to the industry and greatly respected. She faces the formidable difficulty of transfer values. What disturbs me and fellow members of the all-party insurance and financial services group--two of my most able

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supporters, my hon. Friends the Members for Colchester, North (Mr. Jenkin) and for Gloucester (Mr. French), are here tonight--is how we calculate transfer values.

Some of the evidence given to us concerned a teacher who was given a transfer value of £22,000 on leaving the teachers' scheme but 15 months later the reinstatement cost was £84,000. A staff nurse who was given a transfer value of £5,000 was two years later quoted a reinstatement cost of £53,000. As long as such a problem exists--as long as there is such a difference between the transfer value on leaving a scheme and what it costs to rejoin--there is no doubt that elements within the insurance and pension industry will resist what the Securities and Investments Board and the PIA wish to achieve. That will not help to clear up the matter once and for all, which is what is needed if we are to restore the confidence of ordinary people in private pension provision.

I cannot do other than agree wholly with my right hon. Friend the Member for Sutton Coldfield (Sir N. Fowler)--personal pensions are a very good thing. What we have to be sure about is that the right people buy them in the right circumstances, which is something that we should consider before the Bill passes all its stages.

9.4 pm

Mrs. Helen Liddell (Monklands, East): I am grateful for the opportunity to speak in this debate; I regret that I missed the opening speeches. I have waited four and a half years for this debate because I am a Maxwell pensioner. There is a sense in which hon. Members on both sides of the House say, "Oh well, at last a lot of the loopholes are about to be closed. We can put the Maxwell experience behind us and a chapter is being closed." For the many people who have been affected by the Maxwell scandal, the chapter will never be closed.

There is an assumption that because of the good efforts of Sir John Cuckney many people have now had their pensions restored and everything is hunky- dory. That is not so. The members of the Maxwell works scheme, to which my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) referred, had only 80 per cent. of their pensions paid to them for a long period. Elderly people who had to count the pennies to work out what they would have for the extras in life will not get that money back. Indeed, many pensioners in the Maxwell scheme have not lived to see today.

I make that point with some feeling because one of my misfortunes was that on 2 December 1991, the day that the frauds were discovered, I was taken from the Daily Record and Sunday Mail subsidiary and seconded to Mirror Group Newspapers for the crisis period. I lived through the Maxwell crisis, so hon. Members should believe me when I say that there are those who still suffer psychologically and financially as a result of what happened.

I regret that many aspects of the Bill do not meet the needs that the crisis revealed. I hope that the Committee of Selection will consider me to serve on the Standing Committee because there are a number of matters that I should like to address.

It is not often that I find an opportunity to agree with the hon. Member for Dover (Mr. Shaw). However, one key point he made this evening was about the need for information for pension fund members. One of the reasons why few people managed to spot that something was

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going wrong in the Maxwell scheme was that the pensions department was permanently in chaos. In the four years during which I was a member of the scheme before the frauds were discovered, I received not one item of correspondence from the pensions department telling me either of the state of my pension or of the state of the fund. I was not alone; many thousands of people in the scheme were in exactly the same position.

Much was said earlier about the need for training for trustee members. Training is absolutely crucial, but that lesson has not, I fear, been learnt. An awful lot of people assume that the Maxwell frauds took place because of the strength of Robert Maxwell's personality, but that was only a fraction of the issue. In reality, many pension fund trustees were bamboozled by the fact that Maxwell had set up a network of organisations, not least of which was the Maxwell-owned fund management company. Many distinguished economists and actuaries appeared to give advice to pension fund members, but they were repeatedly bamboozled and had the wool pulled over their eyes. They were not weak or stupid people, but they were not given the opportunity to get the information that they needed.

I pay tribute to the Maxwell pensioners because before the fraud was discovered they were agitating, although not because they felt that there was a fraud. Indeed, it is interesting that they believed that there was not a fraud. The first public evidence that there was a hole in the Maxwell pension funds came when Lord Stevens of Ludgate said to a reporter at a cocktail party that there was a hole in them. The pensioners' representatives were phoned up and their reaction was shared by most people --that it could not be true because it was such an absurd suggestion.

Some weeks later it was found that the suggestion was not absurd and that there was a massive hole in the funds. The pensioners' representatives-- elderly people, some of whom were very frail--rallied round and managed to put a strong and convincing case that kept those who could take decisions to protect pensioners very much on their toes.

The Maxwell affair convinces me that there is a strong case for pensioners' representatives serving on the board of trustees. The role of auditors is also relevant. Lay members of pension funds seek the comfort of an audit. With the audit of the Maxwell fund, the auditors--I do not suggest that there was any irregularity--were the auditors to the network of Maxwell companies. Only a few months earlier, they had been the auditors to the verification of the flotation of Mirror Group Newspapers, the detail of which was approved by the stock exchange. To give comfort to pension fund members, we must ensure that auditors are independent of the operation of the company. I would wish to pursue that in Standing Committee should the opportunity arise.

We must also consider the role of the regulator. I noticed the Secretary of State shaking his head when it was suggested that the regulator was under- resourced and underpowered. Believe me, the sums put aside for the regulator pale into insignificance when compared with the fees that have been paid to blue-chip City firms to help untangle the dreadful scam perpetrated by Robert Maxwell. A considerable amount of money has gone to the City. To stop that happening again, we must ensure that the regulator is adequately funded and has the powers to be proactive. A proactive regulator would have stopped the debacle of the Maxwell scheme.

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Compensation must be addressed in some detail. If it had been available in the right way and speedily enough, much of the anxiety of pensioners would have been overcome. Indeed, many people would have been able to face the future with much more confidence. I am glad that we are debating this Bill, but I greatly regret the fact that many of the lessons that should have been learned from the Maxwell debacle have not been learned. I hope that in Committee some of that may be put right.

9.11 pm

Mr. Bernard Jenkin (Colchester, North): Obviously the hon. Member for Monklands, East (Mrs. Liddell) has been a doughty fighter on behalf of the Maxwell pensioners. I would that she had been in the House for earlier speeches because she would have heard tributes being paid to the Secretary of State and to Lord Cuckney for their role in the affair in making sure-- [Interruption.] I beg your pardon, Mr. Deputy Speaker, Sir John Cuckney. Well, it was a suggestion from the Opposition. Hon. Members have paid tribute to their role in bringing about a much more satisfactory resolution to the Maxwell affair than was envisaged at the outset. It would be apposite if the hon. Lady joined in paying those tributes.

I must declare an interest as an adviser to the Legal and General Group plc. Naturally, I am tempted to comment at length on mis-selling, but I guess that the House would think that anything that I said would be coloured by that interest, so I shall refrain from doing so. I shall do no more than endorse thoroughly the comments made by hon. Members of all parties, especially those of my hon. Friend the Member for Ryedale (Mr. Greenway), that, whatever the benefits of personal pensions, mis-selling must be rooted out. Indeed, the entire industry is committed to rooting out mis-selling. If that is not believed by the general public, more must be done by the industry to ensure that that is so.

I very much welcome the Bill. It represents a balanced approach and a balanced response to the Maxwell affair, which started the process. I endorse very much the measured pace at which the Government have proceeded towards the Bill. There was an extensive period of consultation following the Goode inquiry and, of course, a long period during which we have been able to consider the White Paper "Security, Equality, Choice: The Future for Pensions". The riskier form of consultation of sending the Bill to the House of Lords first ensures that, by the time the Bill comes to this House, we are well versed in many of the issues and in a position to decide finally on them.

It would be a great mistake to regard the Bill as the final word on pensions, as a variety of hon. Members have said, especially my hon. Friend the Member for Carshalton and Wallington (Mr. Forman). Indeed, I dare say that the chapter will never be closed on the Maxwell affair, as the hon. Member for Monklands, East said. It would be wrong to think that we could ever close that chapter. It would be wrong to think that any Bill could provide a totally comprehensive answer to every possible fraud that could be committed in any occupational pension scheme. That would be the sledgehammer that completely cracked the nut. We would see a diminution in what employers could provide in terms of benefits for their employees. There is a necessary balance to be struck. There is an inevitable temptation to trammel the possible

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consequence of every wrongdoing possible. That would be a mistake. To that extent, there is a shared understanding across the House of the issues which face occupational pensions, although naturally we have to find our areas of disagreement as well.

The watchwords for the Bill are maintaining choice and ensuring security and sustainability. Sustainability is one of the most important aspects. We must sustain the commitment to the public sector and make sure that it is sustainable over the long term. We must ensure that the dramatic and fantastic contribution that the private sector makes to pensions in Britain is also sustained. The success of private provision in Britain must remain a key consideration when we formulate policy. It was the key consideration of the report of the Select Committee, of which I am a member. We must remember that the vast majority of occupational pension schemes are extremely well run. To tar all occupational schemes with the Maxwell brush is a great mistake. We need to recognise that the vast majority of pension schemes do not require any tighter regulation. The only reason we are regulating in a heavier way than previously is to ensure that we catch the tiny minority of pension schemes that might not obey all the rules.

I hope that the hon. Member for Monklands, East and others who have spoken about the dangers of a recurrence of Maxwell will bear it in mind that what they perceive as weakness in the powers of the regulator might be a weakness if the establishment of the regulator were the only measure that the Bill introduced to improve the regulation of occupational pension schemes. We are creating a plethora of trip wires.

For example, on the points raised about takeovers, any trustee, member trustee, actuary or accountant who gets an uneasy feeling about the complex and opaque structure of a company and overlapping pension arrangements will naturally be the first person to blow the whistle. The hon. Member for Monklands, East failed to receive information as a Maxwell pensioner. Under the new arrangements, she would be able to blow the whistle. In the Maxwell circumstances, one imagines whistles blowing all over the place and the new pensions regulator having a very busy time.

One must remember that the fantastic contribution to the retirement costs of old people in Britain has largely grown out of voluntary arrangements. There is no obligation on companies to provide large occupational pension schemes, as they have been provided. If it becomes too much of a major burden, more and more companies will retire from the fray and go for the simpler schemes outlined by my hon. Friend the Member for Ryedale.

My last point is a criticism of the Opposition amendment. We are told that the Government fail to recognise

"the importance of pensions as a form of deferred pay". Yet the thrust of other Opposition criticisms, for example, on trustees, fails to recognise pension funds as an asset already owned by the employees. There is a danger that European, less adequate pension schemes will colour the regulation of pension schemes in Britain, to the detriment of pension schemes.

My right hon. Friend the Secretary of State rightly mentioned the judgments of the European courts on the matter with some warnings. I warn him that I doubt

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whether the European Court of Justice has had its last word on equal treatment, pensions, part-time workers and all the issues involved in article 119.

I hope that we will protect pension and financial schemes from the uncertainties created by litigation in the European Court and from the threat of over-regulation and interference from European Court judgments that will ultimately cost the people in occupational pension schemes, whose benefits will not be so good in the long term.

9.19 pm

Mr. Adam Ingram (East Kilbride): The debate has been wide ranging and informative. Most contributions have added to the sum of knowledge on the issue, and it is significant that every contributor expressed reservations about many aspects of the Bill--apart from the Secretary of State, who was without criticism for his own measure. Every other Conservative Member pointed to where improvements could be achieved.

I must comment on the contribution of the hon. Member for Brighton, Kemptown (Sir A. Bowden) and his criticisms of the Bill. It would be good to see him in the Standing Committee, but I suspect that his independence of mind and spirit would preclude that. If he does serve, he will get a warm welcome for many of his comments today. As we heard from many of the speeches, the Bill is far removed from the events that caused the Government, somewhat reluctantly, to consider the weaknesses in the regulation, monitoring and operation of occupational pension schemes. The Goode report on pension law reform was produced in the wake of the Maxwell scandal. It was undoubtedly a definitive piece of work--not without flaws, but none the less a powerful examination of the key issues arising from the Maxwell scandal, with possible solutions to avoid such events in the future. If the House had been debating the conclusions of the Goode report today, I hazard a guess that not much would be dividing us on the key issues in it.

Of course, the Government had another agenda. As with everything else that the Government do, the presentation belies the reality. We are asked to believe the promotional promise of the Government's White Paper in response to the Goode report--that the justification for the Bill is improving security, equality and choice across a range of pension provision now and in the decades ahead.

Nothing could be further from the truth. Where is the security in a regulatory system that has limited investigative powers and is forced to operate reactively and not proactively? Where is the equality, when the Government are proposing a levelling down of standards and benefits, with both men and women losing out? Where is the choice, when the Government are proposing to create an unlevel playing field in favour of personal pension schemes and against defined benefit schemes, which will provide only minimal protection to the low-paid and other at-risk employees, through reductions in the state earnings-related pension scheme?

The Bill fails to deliver properly on those promises of security, equality and choice. In many ways, the Government are like those personal pension salesmen who have been mis-selling pension schemes to millions of vulnerable people for the past eight years or so and, in effect, saying, "What we promise you, you won't get." In

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our consideration and scrutiny of the Bill, it is important that we deal with the reality of the measures involved and that we are not deflected by the Government hype.

We must welcome the good news that the Government have announced on war widows. Although many Conservative Members and the Secretary of State seem to take the credit, it is worth bearing in mind the fact that the measure was vigorously opposed in the Lords and was introduced as a result of a Government defeat. We are grateful that the Government have now accepted that defeat, and I am sure that the measure will be warmly welcomed throughout the country.

As we know from today's debate, the Bill is an amalgamation of three separate issues, all of which are important in their own right and will have major, long-term effects on pension provision. The Bill sets out to modify the law on occupational pensions, although in a much watered-down version of what Goode proposed. It will provide less protection than was set out in the Government's White Paper. It introduces a further reduction in the value of SERPS and will give an additional boost to personal pensions, while failing to tackle the mis-selling of such schemes. The Bill will diminish the pension entitlement of women by raising their retirement age to 65 without providing any worthwhile compensating benefits in return. Much has been made in the debate of the operation and regulation of occupational pension schemes. Since 48 per cent. of all employees are members of those schemes, it is right that such emphasis has been given to that aspect of the Bill. Despite the Government's encouragement to draw employees away from employer-based schemes to personal pension schemes, the National Association of Pension Funds has revealed that 81 per cent. of new employees eligible to do so join occupational schemes. They make that choice despite the many attractive offers put before them.

Although the numbers in occupational pension schemes are declining, they account for a significant proportion of the British work force and have combined assets of about £500 billion. We therefore welcome the establishment of a framework to oversee the operation of occupational pension schemes, although we significantly differ from the Government on the way in which the new regulatory regime should work in practice. That difference was graphically highlighted by my hon. Friend the Member for Monklands, East (Mrs. Liddell) in her description of her experience of the Maxwell fund.

In Committee, we will try to convince the Government that the provisions laid down for member trustees need to be extended beyond the one third employee-two third employer principle set out in the Bill. It is important that a proper balance is struck between those to whom the scheme belongs-- the contributors--and those who act as trustees. The proposal for one third nominated trustees is too cautious and we will push for a 50:50 split between employer and active members.

We also believe that there is a strong case for pensioners to be allowed to have direct trustee representation. That would obviously depend on the overall number of trustees on a particular scheme and the number of pensioners in it. It would be wrong simply to argue that the concept of pensioner trustees should be accepted as a matter of course for a scheme that had just three trustees and represented a small number of pensioners.

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Mr. Forman: Is the hon. Gentleman not in danger of

misunderstanding slightly the concept of a trustee in English law? Does he accept that a trustee is not supposed to be a delegate of any group of people, but is meant to act in the best interests of the whole?

Mr. Ingram: Other hon. Members have made a strong argument for pensioner trustees, but no one raised the issue of trustees looking after the interests of deferred pensioners. I accept the hon. Gentleman's point that trustees are not direct delegates and that they should consider the wider interest. Those of us who have been in consultation in recent months with those involved in the pension sector know that a large constituency of pensioners feel that they can offer particular expertise to the management of particular schemes. Many of them are former senior managers of particular companies. The case for pensioner trustees can be made, but it must be set against a number of other factors relating to the way in which particular schemes are established. For example, the number of trustees on a particular scheme and the number of retired members within it should be taken into account.

Mr. Duncan: So the hon. Gentleman is against them.

Mr. Ingram: If the hon. Gentleman wants to intervene, I would be happy to give way. I have said that the proposal is one for debate in Committee.

Mr. Duncan: In the hon. Gentleman's long answer to my hon. Friend the Member for Carshalton and Wallington (Mr. Forman), it struck me that he was equivocal about whether he wants 50 per cent. of pensioner trustees on pension funds. It strikes me that he is halfway between admitting their trustee role and saying that he wants pensioner democracy in the way that a fund is managed.

Mr. Ingram: I am sorry that it was a long answer, but I got a nod of agreement from the hon. Member for Carshalton and Wallington (Mr. Forman) as I tried to explain some of the issues involved. There is nothing clear cut in many of the matters involved, which is why the Committee stage is of such benefit. It will help those of us who are trying to better the structure of pension schemes. Obviously the hon. Member for Rutland and Melton (Mr. Duncan) has no interest in achieving that and is simply a yes man for the Government and the Treasury Bench.

It is important that a proper balance exists between the contributors and the trustees. Member trustees must be able to operate in an unfettered way, free from employer pressure. We shall therefore propose amendments to protect member trustees and to promote a better system of training provision for trustees than the system that is set out in the Bill.

As other hon. Members have said, the new occupational pensions regulatory authority falls far short of what is required to ensure complete confidence in the regulation of occupational schemes. In its proposed form, OPRA will have nothing to do with issues of indexation, equal treatment or compensation. As the organisation will be reactive, not proactive, it may prove to be wholly ineffective in preventing illegal plundering of funds. It is not sufficient to leave the whistle-blowing role to fund actuaries and auditors. We shall propose amendments to tighten the functions of the new regulatory body and those of the pension regulator. Conservative Members and

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others made that argument during the debate in relation to the suggestion that auditors and actuaries might be left to carry out their functions without proper protection.

It is equally the case that, to ensure confidence in an occupational scheme, the funds of such schemes must satisfy certain minimum standards of solvency. The Government have now partly recognised that the original proposal in the Bill was misleading and required a different definition. However, the changing of the minimum solvency requirement to the minimum funding requirement provides no comfort; if anything, it exposed the weaknesses of the Bill's provisions in that respect.

We shall therefore explore in Committee the alternative means of ensuring the security of the funds and the solvency guarantees of those funds. The alternative concept, proposed by the Trades Union Congress and others, of a minimum contributions requirement, discussed at length during the Lords stage of the Bill by Lord Eatwell, has strong support in sections of the pension industry. One hopes that the Government are prepared to consider that proposal constructively.

It is known that many contributors to the debate outside the House--experts in the field--strongly criticise what was called a minimum solvency requirement and is now known as a minimum funding requirement. That issue needs further examination and greater consideration.

As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said in his opening remarks, the issue of what the role of the state should be in pension provision is central to the Bill. It is obvious that the current Government want to disengage from supplementary pension provision in its entirety. We contend that that is the wrong approach.

It is equally wrong that billions of pounds of taxpayers' money--more than £9 billion paid in 1992-93 alone--should be used to bribe people to opt out of the state earnings-related pension scheme and to buy into personal pensions. Experience has shown that those bribes will prove disastrous for 1.5 million people who switched from an occupational pension scheme to a personal pension or chose a personal pension in preference to their company-based scheme. That has proved equally disastrous for the 3 million people who have taken out personal pensions on a SERPS rebate-only basis.

To satisfy the demands of the Treasury in achieving reductions in the public sector borrowing requirement, millions of our fellow citizens are now effectively in receipt of worthless personal pensions. When they retire, they will join the 1.5 million pensioners who currently have to depend on income support to supplement their basic state pension.

The overall changes in SERPS provision are not a small technical change, as Lord Mackay said during consideration of the Bill in the other place. How right he was. As the Government Actuary details in his report relating to the Bill, the effects of the changes to SERPS will effectively halve spending from £19.3 billion in 2050 to £9.9 billion at current prices. That cannot be achieved without losers. That is one of the most unsatisfactory features of the Bill. It has received little attention to date and it obviously was the Government's intention to seek to obscure what they were up to. It means that, in effect, many people

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