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Mr. Skinner: My hon. Friend referred to the fact that many miners were involved at that time in what I would call the scams of pension schemes. It was around the period when the present Prime Minister was a junior Treasury Minister. On occasions such as this, when the Government created the climate for such spivs, someone should carry the can.

That is probably one reason why the Economic Secretary is being coy about the background to the clause. She will never give us the figures. The Government gave us a figure of £21 billion for the public sector borrowing requirement, but within 12 months it had gone up to£29 billion. The Government, who created the climate in which such spivs operated, should carry the can for the resulting mess.

Mr. Darling: My hon. Friend will wait in vain. The last time we debated the matter, the Secretary of State for Social Security was present. He too knew something about it, as he was a junior Minister in the Department of Social Security when the problem first arose. Curiously, he did not want to discuss the subject. He preferred to concentrate on other matters.

All Opposition Members remember the advertisement showing a man breaking out of a straitjacket and going to get a private pension. What was so insidious about that was that it encouraged people to believe that the very act of going private was enriching, both spiritually and materially. That was not right, and many people lost money as a result.

As I understand it--the Chief Secretary may be able to obtain assistance from nearby--about 9 million pensions were sold during the period in question, about 500,000 of which may be suspect. The clause refers to the qualifying period as being between 29 April 1988 and 30 June 1994. It would be helpful if the Chief Secretary could let us know why those dates have been selected, how she can be confident that it will catch all those affected, and that there will not be people who might have been mis-sold pensions before the end of April 1988?

It is less likely that the same problem will have arisen after 1994, because--the Minister did not seem to know this--it is common ground that the regulations in force that governed the sale of pensions in the late 1980s were quite different from the regime now in force. They have been tightened up. I am surprised that the hon. Lady did not know that.

The Minister's predecessor knew his stuff. He was well briefed, and could answer such questions. We had differences of opinion about how the situation arose and what could be done to improve it, but the rules and regulations have been changed. I think that the likelihood of problems of mis-selling arising after 1994 is rather less than it was before April 1988.

People should be encouraged to use the financial services industry. More and more people will want to make provision for themselves over and above the

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provision that they can expect from the state. If they are to do that, however, they will need a regulatory system in which they can have complete confidence. We have proposed measures to make the system simpler and more effective, but the Minister should realise that the root cause of the problem--the reason why the clause must stand part of the Bill--is the climate created by the Government.

4.30 pm

The self-regulatory system is now wholly discredited, and regarded as one of the main reasons for the unscrupulous behaviour that we are discussing. All the problems were produced by the Government's policy. In this as in so many other contexts, they have always been more bothered about the few who stood to gain from the selling than about the many victims who suffered at their hands. No wonder the Minister is so coy about the nature of the problem.

The need for decent advice has never been greater. We should acknowledge the importance of the work done by both the Securities and Investments Board, under Sir Andrew Large, and the Personal Investment Authority, the lead regulator. When I asked the Minister about the numbers involved and the progress being made, she said that it was all wild speculation. She must be aware--such matters are hardly secret--that I often speak to bothSir Andrew Large and Colette Bowe of the PIA, and I take the trouble to try to find out about the current position.

The Minister, however, does not seem to know that.I should have thought that, between them, those at the Treasury could rustle up a meeting or make a telephone call to find out the position. The Minister may have seen the SIB review, which has been circulated to me and, I assume, to those at the Treasury. It has thrown some light on the difficulties.

Most of the life companies--the producers--have got on with the review, and are making quite fast progress. They expect to know what the problem is by the end of the year, and have probably started to compensate some people. Those who were sold policies by the independent financial adviser sector, however, may not be in the same position.

There are two distinct difficulties. First, some independent financial advisers simply do not have the resources to carry out the sort of investigation that is now required of them. Clearly, if a small enterprise is involved, someone who is examining files relating to the past six or seven years cannot be earning, and therefore will not be generating fees and commission to pay staff. I understand that problem, but there is another.

Some of the independent financial advisers' professional indemnity insurers have tried to block the review. There are legal reasons why they might have wanted to test the matter, but their actions were wholly undesirable for the industry's reputation. The Minister mentioned delays in the courts, and they can be blamed to some extent, but much of the problem has been caused by the wilful obstruction of the review.

Another reason for the slow progress is the fact that the self-regulators cannot compel the professional indemnity insurers to get on with the review. They must rely on contracts, and if there are no contracts in the self-regulation system, they are left helpless.

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That problem could be remedied. If we are not to see similar clauses in future Finance Bills, the Minister must accept that she has primary responsibility for the matter, and that the present system of self-regulation does not work. As most people outside the industry realise, it has been a complete failure. It is high time that the Government faced up to that. If they do not want a repetition of the present problem, they must accept that self-regulation is ineffective, and--what is worse--is denting the confidence of members of the public whom we want to use the industry. The industry employs2.5 million people, and many towns and cities depend on it for employment. Self-regulation is not helping the industry, and it is not helping the public.

The Securities and Investments Board review identifies another problem. Paragraph 10 makes the point that there is

"an element of self-selection amongst investors who respond."

There is every reason to believe that, either because of delay or because of lack of knowledge among those who may have been mis-sold pensions, they will not submit their claims before they are legally time-barred. What will the Government do about that? What steps will they take?

It would be most unfortunate if, at the end of this year, when the time bar will start to bite, people have been excluded over and above those who are excluded by the clause because it affects only policies sold after the end of April 1988. Some people, however, may find that they are time-barred, and the clause cannot help them at all.

The Minister must tell us what she will do about that. She was keen to tell my hon. Friend the Member for Attercliffe that the Government were doing lots of helpful things, and that he had no cause to worry. That is one thing that the Government will have to deal with. Clearly, to amend the general law relating to prescriptions would be to take a sledgehammer to the problem--that is not appropriate--but I am just wondering whether the Government could do something in this case.

Perhaps by the time my hon. Friends have finished speaking in the debate, the Minister will have enlisted some help and be able to assist us on that important point.

Mr. Denis MacShane (Rotherham): Is my hon. Friend aware that the Government spent about £10 billion on advertising to encourage people to withdraw from the state earnings-related pension scheme and to go into personal pension schemes? Some tiny proportion of that money might be usefully spent in the form of newspaper advertisements, first, to apologise for the negligence caused--if the Government are capable of saying sorry--and, secondly, to draw the attention of everyone concerned to the need to apply now to ensure that their claims in terms of tax relief and other applications are not made too late, and do not fall out of compliance with the final date.

Mr. Darling: My hon. Friend is on to an interesting point. He is right to say that about £10 billion was spent on advertising. It is interesting that the advertising not only encouraged people to go into private pensions, but, surprisingly, invited those seeing or reading it to believe that it all had something to do with the Conservative party. Curiously, it does not want to have any more advertisements.

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My hon. Friend makes an important point, although I might differ from him in one respect. He suggests that the Government should place advertisements saying that they are sorry. I can see a compelling reason for the Conservative party placing advertisements saying that it was sorry about that. It could take a double-page spread and add a few other things besides, but, as the Government never tire of telling us--and I agree--the Government do not have any money of their own: it is taxpayers' money.

The difficulty here is not only that the taxpayer paid for the advertisements to encourage people to get into the difficulty, but that they have to pick up the pieces at the other end. The people who buy policies are having to pick up the pieces because of the compensation and all the other costs. There has been cost after cost after cost--all imposed because the Government tried to sell their dogma, and, as I said, acted in the interests of the few, as a result of which many people have suffered.

The Government have rightly tabled this clause to deal with the people who opted out of occupational pensions, but we have not begun to consider in great detail another category of people: those who were wrongly persuaded to opt out of SERPS. No one knows--I am prepared to concede on this point that I do not know either--how many people might have opted out of SERPS. I fear that many people may wrongly have been persuaded to opt out of it.

My question is simple: what will the Government do about that? Will there be a similar clause in next year's Finance Bill to deal with that problem? Perhaps, as the Minister will be dealing with that point, she will also tell us what the Government are doing about it and what inquiries they have put in hand. I know that the regulators have taken the view that they have to solve the problems in relation to occupational pensions first, and then turn to the SERPS problem.

What we have here is a cleaning-up exercise. We are cleaning up after a mess that was caused, to a large extent, by the actions of the Conservative Government in the late 1980s, and in respect of which they will not accept responsibility. Yes, there were others who were culpable. Many of them have left the industry. Others have been fined and punished. We will support the clause because we want to ensure that the people who lost money through no fault of their own are restored to the position they were in before this disaster struck them--so far as that is possible. That is only right.

The Government should do two things. First, they should accept responsibility for what they have done--something this Government have been very poor at doing. Secondly, they should take action to ensure that such a disaster does not happen again, which means--I state it once again--that they have will have to do something to simplify the regulatory system and to make it more effective. The Government will also have to investigate other spheres--such as SERPS--in which, I fear, there may be another problem that will force us to return to this matter next year.

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