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Mr. Miller: Indeed. Serious questions must be raised about the activities of the trustee, the professional advisers and the investment company from 1989 until 1994, or possibly 1995 or even up to the present day. The situation is complicated because there has been a change of personnel over time with the change of ownership of the company, but there must have been a point when it was known that the fund had dipped into deficit. At that time, surely it must have been the duty of the professional advisers, the directors of the company and the trustee to reinstate the funding of the scheme. That did not take place. My hon. Friend makes an important point, which should be the subject of investigation.
Mr. Frank Field (Birkenhead): I thank my hon. Friend for the work that he has done on the matter, which affects not only his constituents but, as my hon. Friend the Member for Wallasey (Ms Eagle) said, people throughout Wirral, Chester and Merseyside. As well as looking at the past, important as that is, it is also important to look to the future. This is the first such tragedy to come to notice as the Pensions Act 1995 takes effect. Will not the occupational pensions advisory service--OPAS--and the pension ombudsman be in the spotlight as people watch how effectively they carry out their functions? Sadly, this may not be the only case that will come to our attention in the next five years.
Mr. Miller: That, too, is an extremely important observation. We do not yet know how the new Act will work. The fund was conveniently wound up just before relevant parts of the Act come into effect. There may have been good advice; I do not know. However, even if the trustee took bad advice, made bad decisions or acted improperly during the period in question, where on earth will the money come from to refund the people who have been so poorly treated? It can only be from within the structure of companies that I have described.
The company structure is convoluted. There is a possible theme suggesting that Chester Plant and Leasing, with its offshore shoot Gardenia Holdings registered in the Bahamas, may be an important area of investigation, especially as those two companies hold a charge over the company that has allegedly been set up to protect the staff, including the pension fund.
I agree with my hon. Friend that the matter will highlight important new functions of the pensions ombudsman and OPAS, but we must also get to the bottom of the company structure, or we will simply be taking academic steps in relation to individual trustees who might lose their house, but that would not solve a funding problem of the scale that I have described.
I have always argued that the Pensions Act 1995 would not stop another Maxwell. Whether this case falls into that category, one cannot be certain. It is certain, however, that 150 families in constituencies of hon. Members on both sides of the House, and many other creditors, including to a considerable extent the Department for Education and Employment, will have to wait a very long time to recover anything from such a sorry state of affairs.
I have spoken to the Minister about this important matter. I know that he is sympathetic to the plight of my constituents and other creditors, and I appreciate the time that he has already given me on the matter. I ask him, however, to take action urgently--action that includes asking the DTI inspection branch to investigate immediately the matters that I have raised. I shall make all the documents that I have received available to him, and I shall co-operate fully with the investigation.
The Minister for Competition and Consumer Affairs (Mr. John M. Taylor):
I congratulate the hon. Member for Ellesmere Port and Neston (Mr. Miller) on securing the debate, and on the considered way in which he and others have raised questions that concern us all. I acknowledge the presence of, not least, my hon. Friend the Member for City of Chester (Mr. Brandreth), who--like our new colleague, the hon. Member for Wirral, South (Mr. Chapman)--cannot speak in the debate, for his own proper reasons. I also acknowledge the presence of the hon. Member for Alyn and Deeside (Mr. Jones), who has just joined us.
I share the concern that has been expressed about the security of pension funds, which is important to the Government and, indeed, to all of us; but I must utter a word of caution. This is a discipline that, perhaps, binds me more than anyone else in the Chamber, but the company that is the subject of today's debate is not, to my knowledge, in any form of insolvency, and we must hope that nothing that we say here will damage its prospects.
The hon. Member for Ellesmere Port and Neston has discussed his anxieties with me at some length. Although I may have to be somewhat circumspect, I shall introduce him to my appropriate officials immediately after the debate--in nine minutes' time. We spent more than half an hour together last night. The hon. Gentleman is necessarily more informed than I am at this stage, but I shall catch up, in the spirit of sympathy that he invited me to adopt for his and other hon. Members' constituents.
I note that only eight minutes remain. Let no one doubt that I am limited in what I can say in that time. My reply to the debate is not an end to the matter, and the hon. Gentleman's raising of the matter constitutes the beginning of what I shall endeavour to do. If time does not allow me to deal with all the issues, I wish to leave the House in no doubt about my attitude.
A range of protections already exist in pensions legislation and trust law, on which most pension schemes are based. All trustees have a duty to ensure that schemes are run properly, and to act in the interest of members at all times. Whether, and to what extent, pension funds can be used to provide early retirement benefits will depend on the rules of particular schemes, and on the powers of trustees to make such awards; but I repeat that trustees have a duty to protect all members' rights. That point was raised by the hon. Member for Wallasey (Ms Eagle).
According to our information, although there was a deficit in the Robertson scheme three years ago, recovery was made within six months. The latest solvency statements about the Robertson pension scheme put to the Department of Social Security in respect of its contracted-out status show no evidence of underfunding.
Mr. Miller:
Will the Minister give the exact dates of those statements?
Mr. Taylor:
I hope that there is enough good faith between the hon. Gentleman and me for him to accept that I will clarify that for him behind the Chair after the debate. He should, of course, feel free to share the information that I give him with other participants in the debate.
Trustees can make investments of any kind, but cannot normally invest more than 5 per cent. of a scheme's assets in the sponsoring employer or associated companies. That restriction substantially reduces the risk of loss should the employer become insolvent; but, if the employer does become insolvent, a trustee must be appointed who is entirely independent of the employer and any associated companies. The independent trustee is responsible for looking after the resources of a final salary scheme, and for protecting the interests of members. If there is a shortfall of assets in the fund, the deficit becomes a debt due from the employer to the trustees. It is the trustees' responsibility to pursue such a debt.
The protections to which I have referred are about to be strengthened. Important new measures, stemming from the Pensions Act 1995, will come into effect on 6 April. All those measures are geared towards safeguarding the security of pension funds and protecting members' rights. We must accept that the Act cannot be seen as an absolute guarantee that there could never be another Maxwell--as the hon. Gentleman pointed out--but it will introduce clear duties relating to the procedures that trustees must follow, and the controls that they must implement. That will increase trustees' vigilance in ensuring that pension schemes are properly administered and protected, and adequately funded.
Mr. Frank Field (Birkenhead):
One of the crucial new checks will be the solvency requirement. In other words, pension schemes must have funds so that, whenever they are closed, they can afford to buy annuities. It was said at the time that it would have been better for the industry to have an insurance scheme, so that when such cases arose the whole industry would ensure that those who had paid into pension funds received their pensions. Sadly, the solvency requirement does not have such an effect.
Mr. Taylor:
The hon. Gentleman is an acknowledged parliamentary expert on pensions, and I note his opinion with appropriate respect. I do not think, however, that he wants me to reopen that previous debate; he wanted to put a point to me, and I take it in that spirit.
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