Maxwell Pensioners

HC Deb 09 June 1992 vol 209 cc203-49

[Relevant document: Second report from the Social Security Committee, Session 1991–92 (HC61-II) on the Operation of Pension Funds.]

Mr. Deputy Speaker (Mr. Michael Morris)

Madam Speaker has selected the amendment in the name of the Prime Minister.

7.13 pm

Mr. Michael Meacher (Oldham, West)

I beg to move, That this House, whilst supporting the Government's initiative to recover from the banks, financial institutions and the Maxwell family the pension fund assets which were stolen, notes the Government's responsibility both because the Department of Trade and Industry gave an investment licence to two Maxwell companies which he used as a channel to steal the pension monies, and because of the deep flaws in the current supervisory system; considers that the new committee to review pension law should not have to take a year to complete its work. and believes that emergency measures to protect occupational pension fund members should be taken without delay; and calls upon the Government to provide a more realistic sum than £2.5 million to underwrite the pensions of current and deferred Maxwell pensioners, some of whom have already suffered major losses through no fault of their own.

The purpose of the debate and of our motion is to test the adequacy of the commitments given by the Secretary of State for Social Security yesterday to the Maxwell pensioners. The right hon. Gentleman said yesterday: It is certainly our intention that those who are not being paid pensions and those threatened with a cut in pensions should receive and maintain pension fund payments. Our motion is designed to probe whether that commitment is as copper-bottomed and complete as it might appear at first glance.

The Secretary of State's case is that his £2.5 million is a short-term emergency fund, until the £100 million locked in the common investment fund can be allocated to the nine different Maxwell schemes by a court ruling. That is his short-term solution and he was careful to distinguish it from a long-term solution to resolve the long-term problem; that will be done through the return of stolen assets, and the securing of contributions to the trust fund from those who feel obliged and willing to contribute. Those are the Secretary of State's words and that was the Government's case. The Opposition believe that that case is misconceived, unreal and manifestly inadequate, and I shall set out the grounds for that view.

First, and most important, a denial of any Government responsibility towards the Maxwell pensioners was inherent in everything that the Secretary of State said yesterday. The right hon. Gentleman was careful to insist, several times, that—to quote just one occasion— No Government could accept a duty to make good losses resulting from fraud or theft of savings.

Mr. Win Griffiths (Bridgend)

He said that several times.

Mr. Meacher

Yes, he did. Later, he also said: nor is there any question of Government accepting responsibility."—[Official Report, 8 June 1992: Vol. 209, c. 20-29.] But the Government are responsible in general and in the particular. They are responsible in general because it was no ordinary fraud; it was theft from a pension fund set up as a result of a tax by Government. Pension contributions are not voluntary investments at will. Until 1988, the Government forced every employee to contribute to an occupational pension fund if they were not in the state earnings-related pension scheme. Therefore, the Government are ultimately responsible for those moneys, as they are for the secure and efficient use of other tax moneys.

I submit that the Government are also responsible in the particular because, as is well known, the Department of Trade and Industry granted a licence, before the independent regulatory organisation came into force, to London and Bishopsgate Investments and to another Maxwell company, which Maxwell then used as a channel to steal pensioners' money. The significance of that concession was well understood by one of Maxwell's closest associates, Mr. Larry Trachtenberg, who wrote at the end of a memorandum to Kevin Maxwell—one of the directors of LBI— The most significant aspect of this approval is the way in which it should strengthen LBI's IMRO application. Historically, the approval from the DTI for a Principals Licence was never easy to obtain and the fact that LBI managed to do so, so near the end of the old regime's life, is thought to be a very good sign. In other words, it is clear that the DTI originally sold the pass.

The Government are responsible in the particular on other grounds. The Investment Management Regulatory Organisation was clearly flawed in its supervision. One of the Maxwell companies was not visited for nearly two years after IMRO authorised it, and then it gave LBI a clean bill of health, even when it found "no formal record" of transactions considered to be an essential control. In that context, we would like an assurance from the Secretary of State that the Securities and Investments Board report on IMRO will be published. I would be happy to give way if he wishes to intervene now to give such an assurance. On top of that, the Government failed to comply with the EEC directive 80/987, which required European member states to introduce legislation to protect the pay and pensions of employees in the event of their employers' insolvency.

For all these reasons, there is no question but that the Government are responsible, both in general and in the particular circumstances of this Maxwell scandal. Therefore, I ask the Secretary of State the question that I put to him yesterday at Question Time, but that he evaded. As he is responsible, will he accept the proposal from the Maxwell pensioners action group that their pension rights be assigned to him, that he pays their pensions and that he then recovers the costs by pursuing the banks? That is what the Government did in the case of Barlow Clowes shareholders, for whom the Government had far less responsibility. I think that I am right in saying that they had far less responsibility. I think that I am right in saying that the Government have now clawed back £100 million of the £160 million that they originally paid out in that case.

I ask again, directly to the Secretary of State, what I asked him yesterday. If the Government were right to do that in the Barlow Clowes case, why is it not right for them to do so in the case of the Maxwell pensioners, who are far more deserving? I would be happy to allow the Secretary of State to intervene to answer that question, which is the central question in the debate. I am asking him to comment directly on that question, of which I gave him notice 24 hours ago. It is not a question that I am popping at him now.

The Secretary of State for Social Security (Mr. Peter Lilley)

I am hoping to catch Mr. Deputy Speaker's eye, and I shall be able to respond to the hon. Gentleman's speech in the normal way.

Mr. Meacher

That is fine, as long as we have an answer to this question—the central question in the debate. It is not acceptable that the only responsibility that the Government acknowledge in this whole wretched business is payment of the guaranteed minimum pension. I have been sent two examples by the action group of what this will mean in practice. The first of these concerns Mr. Cliff Jubb of Sheffield, who worked for the engineering firm Newton Chambers for 49 years and had been enjoying a pension of £300 a month. He is 74 years old and his guaranteed minimum pension will now be £6.72. Another pensioner aged 68, Mr. John Breadmore, enjoyed a pension of £10,000 a year and has now been informed that his guaranteed minimum pension will be £201.68 a year. That is slightly under £4 a week.

Are those the kind of consequences that the Secretary of State thinks it right and proper for pensioners to be left with if, as so many people believe—not only in the House but outside—the £2.5 million proves to be totally inadequate? Is he aware that those would be the consequences. and does he accept them?

Mr. Stephen Day (Cheadle)

I have the privilege of serving on the Social Security Select Committee and I am member of the all-party group formed to look after the interests of the Maxwell pensioners, to which I am committed. Up till now, when the Opposition Front Bench team has become involved, the pensioners' interests have been looked after on an all-party basis motivated by commitment to dealing with the issues rather than scoring cheap political points and trying to point the finger at the Government. If the hon. Gentleman were serious about helping the Maxwell pensioners, as I know that both the all-party group and the Social Security Select Committee are, he would not turn this issue into a party political football.

Mr. Meacher

I am sorry that the hon. Gentleman is getting worked up into such an artificial lather. I am one of those—he may have been another—who spoke to many of the Maxwell pensioners after the Secretary of State's statement yesterday. I got the strong impression from all to whom I spoke—both the leaders and the individual members—that they were thoroughly dissatisfied with the content of that statement and with the uncertainty of the outcome with which they are presented. It is that to which I am speaking today.

Let me return to the Government's strategy, as outlined by the Secretary of State yesterday. Even if we leave aside the fundamental question of the Government's responsibility in this matter, there is one huge flaw in the approach that the right hon. Gentleman is adopting. It is that his is a voluntary scheme. Therefore, there is no guarantee whatsoever as to the outcome. It is literally all a wish and a prayer. Here are some quotations from the right hon. Gentleman yesterday. In his statement he. said: the institutions involved may well feel some moral obligation to assist the pensioners". Later, in reply to a question, he said: I hope that much more money will come from the City".

Dr. Keith Hampson (Leeds, North-West)

It probably will.

Mr. Meacher

We shall see. The Secretary of State also said: there is also a moral question, which we invite the banks and other financial institutions to answer. My last, and perhaps most important, quotation is this: the onus is on those who had dealings with Maxwell in the past to examine their consciences and to see whether they should share the profits that they made in the past with those who suffered a great loss at the hands of Maxwell."—[Official Report, 8 June 1992; Vol. 209, c. 19-24.]

Mr. Lilley

Will the hon. Gentleman give way?

Mr. Meacher

I have been quoting the right hon. Gentleman's words, so I would be glad to allow him to intervene.

Mr. Lilley

The motion before the House urges the Government to underwrite the pensions of existing and future pensioners. Is it not the case that, if we did so, the chance of anyone contributing to pensions or returning a single stolen security voluntarily and ahead of time would be zero?

Mr. Meacher

I am coming on to exactly that point. [HON. MEMBERS: "Oh."] I know that that is often used to evade the issue—

Mr. Rupert Allason (Torbay)

Read Lord Williams and—

Mr. Deputy Speaker

Order. The hon. Member for Torbay (Mr. Allason) is out of order.

Mr. Meacher

The Secretary of State has come to the core of the matter. He is keeping down the Government's contribution so as to ensure that others will still have an incentive to make a contribution. If they do not, we shall have the disadvantages of both worlds—no contributions and a tiny Government commitment. As I made clear in Question Time yesterday, I believe that the Government should underwrite those pensions and then use the powers at their disposal to ensure that they get the money back from the banks and institutions.

Mr. Geoffrey Dickens (Littleborough and Saddleworth)

Will the hon. Gentleman give way?

Mr. Meacher

No, I want to move on, and I am conscious that other Members wish to speak. I may give way later on.

Mr. Lilley

By definition, the legal powers are already available. We are asking people to go beyond their legal obligations to their moral obligations. In those circumstances, if the moral obligations have already been underwritten by the Government, what possibility is there of anybody fulfilling his moral obligations? What powers does the hon. Gentleman suggest that I should take to force people to meet their moral obligations?

Mr. Meacher

I am about to deal with that exact issue. The right hon. Gentleman will then see that he does have the powers; the problem is that he does not want to use them because he wants to keep the scheme voluntary so that the City might be prepared to give the odd contribution if it chooses. If the right hon. Gentleman really believes his comments of yesterday, which I quoted, he is more naive than I thought. The City is about as conscious-stricken as Maxwell was law-abiding.

It could not be clearer that the Government have one law for the City and another for the trade unions. The National Union of Mineworkers was pursued by an army of lawyers, and its funds were sequestrated because it failed to hold a ballot. The banks, which are holding on to £200 million in stolen assets, are given a limp slap on the wrist and then told to examine their consciences.

The right hon. Gentleman has said again today that he has no powers to force the banks' hands, but he has those powers and I shall tell him what they are. For the banks to operate, their banking licence must be reviewed regularly. I submit to the Secretary of State that it would be perfectly proper to threaten to refuse to renew the licence of any bank which is knowingly holding on to stolen assets and which refuses to hand them back. If he or his colleagues have those powers, why does the right hon. Gentleman refuse to use them? They could secure the outcome that we all want to see. That is the question he must answer.

There is another reason why the right hon. Gentleman should take a much tougher line. It is frankly deeply offensive to the Maxwell pensioners, living on the edge of poverty, to be offered a few pounds to keep them going while those who perpetrated the scandal are still living openly and legally in the lap of luxury. Not only does Kevin Maxwell still live in a £1.5 million Chelsea home, but he and his brother are allowed by the liquidators to draw a weekly living allowance of £1,500 from their otherwise frozen bank accounts. Apparently, they even have the money to consider establishing a new media empire. We are told that Mr. Larry Trachtenberg still has the free use of a £350,000 bonus that he received from London and Bishopsgate holdings for services rendered. What are the Government doing when, nine months later, the guilty still enjoy all the trappings of wealth while the victims are fobbed off with an average of £18 a week each, if they get anything at all?

Mr. David Winnick (Walsall, North)

Does my hon. Friend agree that the two Maxwell brothers showed total contempt for the House of Commons when they refused to answer questions before the Select Committee on Social Security? They carry on with their millionaire lifestyle and show contempt for the victims, but, as my hon. Friend said, the Government show no concern whatsoever. It will be interesting to learn whether the Attorney-General will make a statement to the House—he should make it as quickly as possible—on when criminal prosecutions will occur.

Mr. David Shaw (Dover)

On a point of order, Deputy Speaker. Members of the Select Committee on Social Security were extremely upset, to say the least, when the Maxwell brothers came to us and said that they wanted a right of silence. We took extensive advice about that from within the House of Commons. At least one statement made yesterday about the Maxwell brothers might prejudice a fair trial, so will you advise, Mr. Deputy Speaker, that it would be helpful if all hon. Members did not seek to make cheap points at the expense of a fair trial?

Mr. Deputy Speaker

The matter is not sub judice.

Mr. Meacher

I now turn to the question of the £2.5 million. It is a tiny amount precisely because of the Government's voluntary approach, which the Secretary of State made clear a few moments ago. He admitted that his rescue package must be small, otherwise it would let the banks and the other financial institutions off the hook from having to contribute. That means that the Maxwell pensioners will be left in the middle between the hard-nosed meanness in the City and the feebleness of the right hon. Gentleman in failing to enforce reimbursement. Instead of shilly-shallying with appeals to consciences and for discretionary contributions, the right hon. Gentleman should be underwriting the pensions in full and using every legal means and every other lawful pressure to make certain that the banks and the other institutions repay. That is the gap in the rescue package.

Mr. John Greenway (Ryedale)

rose—

Mr. Iain Duncan-Smith (Chingford)

rose—

Mr. Dickens

rose—

Mr. Meacher

I shall give way to the hon. Member for Littleborough and Saddleworth (Mr. Dickens).

Mr. Dickens

As we are examining our consciences, does my hon. Friend—I call him my hon. Friend because he represents a seat in Oldham—recall the way in which Labour Members, at each party conference, fought their way through the picket line of printers to get to Maxwell's champagne? Will the Labour party return to the pension funds the contributions that it received from Robert Maxwell? Labour Members are frightened of the Minister asking for people to examine their consciences because that means that the Labour party must start to examine its own.

Mr. Meacher

As usual, the red-faced hon. Gentleman brings a serious issue into contempt.

The fact is that the Government's figures do not add up. The Secretary of State's case is that the £2.5 million is enough to keep the pension funds afloat until the £100 million is released from the common investment board in about six months' time. Even then, that will leave a shortfall of £458 million. The Government hope that the banks will repay £217 million of that, and they hope, perhaps dream would be more appropriate, that the remaining £241 million will be covered by voluntary contributions. That is about as likely as Mrs. Thatcher becoming Prime Minister again. I know that is something that the right hon. Gentleman devoutly desires, but it will not happen.

As everyone can surely see, at the end of the day, there will be a huge hole in the Maxwell finances. It is perfectly clear that, after all the political hoo-hah has died down, as the Government hope, it will be the deferred pensioners —those who intend to retire in 10 to 20 years time—who will draw the short straw. Such is the cynical calculation that the Government have made and it is one that the rest of us, who have any belief in justice, must stop by making sure that the issue does not go away.

The right hon. Gentleman's rescue package is a huge con. It is designed to give cover to 6,000 pensioners only, when, with the wind-down of the Maxwell Media Corporation staff scheme and AGB funds, more than 12,000 are likely to require support in the next few months. There is no guarantee of a 100 per cent. top-up and the scheme will last only until the common investment fund is divided up. As I said, that is not the end of the problem. After a temporary respite, we shall be left with a much more serious long-term problem.

The provision of only £2.5 million to Maxwell pensioners is an insult when compared to the £160 million that was made available to the Barlow Clowes offshore speculators. Even the belated implementation of section 58B of the Social Security Act 1990, for which I am glad, will do almost nothing for the Maxwell pensioners unless they are made preferential creditors. I strongly press that course on the right hon. Gentleman, even at this stage. Until he takes powers that are adequate to the scale of the problem and recognises that hawking his begging bowl round the City is not only undignified but no answer to the scale of the crisis, the rescue package will remain a charade. We have tabled our motion to test the seriousness of the right hon. Gentleman's purpose.

7.40 pm

The Secretary of State for Social Security (Mr. Peter Lilley)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: shares a deep concern for the distress pensioners face as a result of the pillaging of pension funds by Robert Maxwell; applauds the initiative taken by the Government to provide temporary, emergency funding to help those schemes which have a particularly acute short term problem; and, while welcoming the decision to initiate a thorough review of the framework of pension scheme law, notes with approval the important part that occupational pensions continue to play in ensuring increasing prosperity among the retired population of this country.

It is a pleasure, on our second encounter, to follow the hon. Member for Oldham, West (Mr. Meacher), although I shall not be following him along his customary route, which is to go straight over the top, as he did again today.

Characteristically, the hon. Gentleman lambasted the Government response to the Maxwell affair. But he has misunderstood the problem, misrepresented the facts and misjudged the mood of the House. The House recognises that this is not an area for glib statements, easy solutions or partisan attacks. Most hon. Members support the carefully constructed package of measures that I announced yesterday. They have certainly been welcomed across a wide spectrum of opinion outside the House. The Times and The Independent both recognise that it would be wrong for the Government to underwrite the deficit left by Maxwell's theft. So does The Guardian. Its leader said that it would have been wrong—as the all-party social security select committee has noted—for the Government simply to bale out the bankrupt pension schemes. A much more subtle approach is needed … The Government's strategy is both clear and sensible … Mr. Lilley had a balance to strike yesterday between short-term pressure and long-term reconstruction … the initial balance is there. I hope that by quoting The Guardian I have not discouraged the paper from supporting me again.

Dr. Hampson

There was an aspect of yesterday's welcome package that I hope my right hon. Friend will clarify. It concerns those Leeds pensioners who have lost their pensions for two months. There was no clear commitment yesterday that those payments would be paid retrospectively. Can my right hon. Friend relieve them of their anxiety?

Mr. Lilley

I cannot ensure that—[Interruption.]—but it is certainly the intention that payment will be made henceforth and that the grant will enable that payment to be made. I shall look into the point that my hon. Friend raises.

Before dealing further with the remarks of the hon. Member for Oldham, West, I wish to pay tribute to the efforts of the all-party group on occupational pensions and the members of the Select Committee on Social Security in the last Parliament. It is a longstanding convention that occupants of this Bench, when presenting welcome proposals, present them as if they were entirely their own ideas, immaculately conceived and produced without any outside influence. I believe that the package that I announced yesterday would have been developed in direct response to the plight of pensioners without any outside prompting, but it is only fair to admit that the efforts of the hon. Member for Birkenhead (Mr. Field) and of my hon. Friend the Member for Hertfordshire, South-West (Mr. Page) made its arrival all the more certain. I am grateful to them, to members of the all-party group and to members of the Select Committee on Social Security in the last Parliament. All of them were rowing in the same direction and we have all converged on similar ideas.

Mr. Jeremy Corbyn (Islington, North)

Many welcome the fact that there is to be a committee of inquiry, as announced by the right hon. Gentleman yesterday, into the structure of pension funds. But does he accept that the disaster of the Maxwell pension fund was, in a sense, a disaster waiting to happen because of the inadequacy of the legal framework surrounding the ownership and control of pension funds and the degree of self-regulation that exists in the City? While I appreciate the right hon. Gentleman's need for a committee of inquiry, does he not think that 12 months is too long in this matter and that we need action more urgently to protect all the other pension funds and contributors to pension funds throughout the country from the kind of appalling scandal that we, through the Select Committee, have uncovered in the case of the Maxwell empire?

Mr. Lilley

No, I would not accept that it was inevitable that the Maxwell fraud would be perpetrated. To the extent that it, or the questions that have been raised following it, suggests that there should be changes in the pensions framework—the law and regulation of pensions—we see that we need seriously to consider those changes rather than to jump precipitately into changes without giving the issues proper consideration. I shall return to that matter later.

Mr. John Greenway

It is worth the House taking note of the fact that we are talking about two separate animals in terms of pension rules and regulations. There are large self-administered schemes, such as the Maxwell scheme, and it is right that, for compensation, people should look first and foremost to those who ran that scheme rather than to the Government. But a large number of occupational pension schemes in Britain are insured schemes and are subject to much more rigorous regulation. The pensioners in those cases are protected by the Policyholders Protection Act 1975. Many people would like reassurance from my right hon. Friend that their pensions are safe because of the protection given to them by that Act.

Mr. Lilley

My hon. Friend, who is a leading expert on pension matters, is absolutely right. It is wrong to suggest that, because of this terrible crime, everybody should be going about in fear and trembling, particularly if they are in the sort of schemes to which my hon. Friend referred. The hon. Member for Oldham, West and I agree that the Maxwell pensioners have been the innocent victims of a vile and unprecedented crime. But the Maxwell pensioners and the House do not want the undeliverable promises of the hon. Member for Oldham, West; they want a considered package of measures that will help to give them peace of mind about their immediate financial future, to secure the assets that will pay their pensions in the years ahead and to ensure that a similar crime can never happen again.

Mr. Alfred Morris (Manchester, Wythenshawe)

rose—

Mr. Lilley

I will make a little progress before giving way further.

That is why, in my statement yesterday, I announced a package of five measures to deal with the short, medium and long-term issues raised by Maxwell. In the short term, we need to ease the acute pressures while assets are unlocked from the central fund. That is why I announced temporary, emergency funding to help schemes restore and maintain pension payments. That should give pensioners greater peace of mind about their immediate financial future.

Mr. David Madel (Bedfordshire, South-West)

rose—

Mr. Lilley

I hope that my hon. Friend will allow me to make some progress.

In the medium term, we must secure the return of stolen assets and any other funds to help pay pensions in the years ahead. To that end, I have established a special unit in my Department. It will work alongside the pension scheme trustees and others to secure the return of assets and their fair distribution between funds. The unit began work in embryo today.

I must tell the House that even if one was as successful as the hon. Member for Oldham, West believes it would be possible to be, deploying an array of powers that probably do not exist, in securing the return of all the stolen assets that were used as collateral for loans, that would still leave a considerable deficit. We expect the unit to establish a trust fund to mobilise support from those who recognise a moral obligation towards the Maxwell pensioners or who have an interest in maintaining faith in the integrity of the pensions industry.

Several Hon. Members

rose—

Mr. Lilley

I wish to make some progress, and I am outlining the measures. I will then come to matters that will give an opportunity for hon. Members to raise any points that they wish to put.

In addition to the fund, I announced the implementation of regulations under the Social Security Act 1990 which will have the effect of making Maxwell pension schemes ordinary creditors of their employer companies, though I emphasised that the financial benefits likely to flow from that were limited. Parliament did not grant power to the Minister to make regulations that would have made pension funds preferential creditors, rather than ordinary creditors, of the employer companies.

For the long term, we need a framework of law that will prevent such a crime ever recurring and which will provide a firm basis for the pensions industry to grow. That is why I announced a wide-ranging review under Professor Goode.

Mr. Alfred Morris

rose—

Mr. Lilley

I am anxious, before giving way further, to finish outlining the measures that I announced yesterday.

The basic mistake of the hon. Member for Oldham, West is that he simply does not understand the problem. He fails to recognise that the acute short-term problem is distinct from the longer-term problem of restoring or replacing lost assets.

The Maxwell pension funds have some £230 million of assets safe in their hands, but £100 million of it is in the common investment fund that handles part of their investments, while the remainder is in individual schemes. It has not been possible to agree how much of that £100 million is attributable to each scheme. The trustees have therefore agreed to submit to a court ruling the allocation of that £100 million. But that will take a few months and, until then, that sum is frozen. Our repayable grant is designed simply to cope with the acute short-term pressures faced by the schemes while that situation persists. It will also enable progress to be made in securing the return of some of the stolen assets and obtaining other funds.

The hon. Member for Oldham, West and others ask, "Why £2.5 million?" That figure is based on my official experts' assessment of the position of the various schemes. They are better placed than anyone else to make such an assessment and have also taken into account the possibility that the court ruling may be later rather than sooner. So I am confident that the sum allocated is sufficient for the purpose.

As far as I am aware, the hon. Member for Oldham, West has no direct information about the state of Maxwell pension schemes. Yet his motion calls on the Government to provide "a more realistic sum". It is not clear why the hon. Gentleman feels that he is a good judge of what is realistic. Among the many admirable qualities that one associates with the hon. Gentleman, realism is not high on the list. I assume that he is demanding more on the principle of "never knowingly overbid". Indeed, his bids have been constantly rising. At the beginning of May, he called on the Government to mount a huge rescue operation, which he said that we could afford, costing £156 million. At the end of May, he called on the Government to meet the shortfall, which he then put at between £200 million and £300 million. His motion today calls for us to underwrite all the pension liabilities, which means accepting a current deficiency of £350 million. When the hon. Gentleman is comparing our £2.5 million with a £350 million deficiency, he is comparing apples with pears. The sum that we are making available is purely to deal with acute short-term pressures while frozen funds are being released. The longer-term deficiency can be resolved only by the return of assets and by securing other funds.

Mr. Alfred Morris

Returning to the right hon. Gentleman's proposal of yesterday, which is now at the heart of this debate, was there ever before a scheme for the loan of a lifebelt that was at once cash limited and time limited? What happens if and when the time limit runs out?

Mr. Lilley

I am confident that we have provided enough money, even assuming that the court takes longer than it may to reach a judgment. The right hon. Gentleman says that this is a loan. Technically, it is a repayable grant. In other words, we expect the schemes to repay only if they are successful in getting back their assets and are able to do so without detriment to the pensioners. I hope that I have made it clear that there is no question of individual pensioners having to repay any sum of money. That is out of the question.

Mr. Madel

My right hon. Friend referred to short-term measures and peace of mind. I refer to the Maxwell Communication works pension fund and possible difficulties after 1 July. Can he assure me that, because of the Government's short-term relief, individual pensioners will not have to fill in forms or contact people but that from 1 July their 100 per cent. pensions will come through automatically?

Mr. Lilley

I confirm that that is so. An arrangement between those handling the grant that we have made available and the scheme trustees, who will discuss how the money should be allocated, will enable the hardest-hit schemes to resume or maintain payment.

Mr. Meacher

Does the right hon. Gentleman accept that, from the beginning, I have consistently asked that the Government should treat the Maxwell pensioners in the same way as the Barlow Clowes speculators? He has still not answered that question. Although it was clear yesterday that he did not know how the £2.5 million was calculated, will he confirm that that sum is to provide protection for the Leeds pensioners and the MCC staff scheme only, and that if the AGB scheme and the MCC works scheme have problems in the next few months, it will not cover them?

Mr. Lilley

The hon. Gentleman is wrong on all counts. It has always been clear that Barlow Clowes is not a precedent. I shall ignore his contemptible description of those investors as "speculators". The £2.5 million grant is not limited to a specific fund, but we believe that it will be sufficient to help the funds maintain and resume pensions over that period.

Mr. George Mudie (Leeds, East)

Will the right hon. Gentleman give way?

Mr. Lilley

I should like to make a little progress, because there was an opportunity at yesterday's statement for the normal process of question and answer.

I must not be too hard on the hon. Member for Oldham, West. The Opposition motion bears many signs of hasty redrafting. I understand that, prior to my statement, the Opposition were planning to table an uncharacteristically moderate motion calling for short-term help, while pressure was put on the financial institutions to help with the long-term shortfall. But now that it is precisely what we have done, so the hon. Gentleman has had to revert to form. He has gone back over the top and tabled a motion calling for us to underwrite the pensions of current and deferred Maxwell pensioners in their entirety.

No Government could, in effect, agree to reimburse everyone who has their savings stolen. The whole House knows that. Moreover, if any Government did underwrite all the pension schemes, they would, at a stroke, remove the pressure on banks and others to release stolen assets rapidly or to contribute to the fund that we are establishing. The Opposition cannot deny that their motion would mean that not a penny would be contributed to the trust fund, and not a share certificate would be returned voluntarily early. The taxpayer would end up paying the whole of the largest possible bill.

Mr. Malcolm Bruce (Gordon)

Is the right hon. Gentleman prepared to make a distinction between the general Maxwell pension funds and British International Helicopters Limited? His speech has made quite a play on moral obligations to people in the City and banks, and I wholly agree with him about that. However, does he accept that, as the Government owned British Airways when British Airways sold the helicopter company to Maxwell, they therefore have a moral obligation to those pensioners?

Mr. Lilley

That does not follow, but I hope that those pensioners can reach an accommodation with MGN. Obviously, I shall look closely at that.

Another question that was raised yesterday, which may lie behind many of the points that hon. Members wish to raise today, is why the Government are not offering a clear guarantee that all pensions will be paid in full—100 per cent.—in the coming months. We certainly intend to ease the position of pension schemes so that they can restore or maintain payment of pensions while frozen funds are being released, but we cannot offer an open-ended guarantee. Moreover, some schemes have resources just sufficient to continue paying part, but not all, of the pension. It will then be a matter of negotiation how much the scheme pays and how much is met by our grant. Clearly, it would be impossible to negotiate while offering to guarantee a 100 per cent. payment, but I am confident that the position of all Maxwell pensioners over the next few months is substantially safeguarded and vastly more secure than it would be without this scheme.

Mrs. Helen Jackson (Sheffield, Hillsborough)

I speak on behalf of the AGB pensioner scheme. Is the Secretary of State aware how difficult it is for pensioners on low incomes to plan anything months ahead? Even on the basis of what the Secretary of State has said, such pensioners cannot plan this year's summer holiday or what to do for Christmas. On those pensioners' behalf, I want to ask the Secretary of State whether he will ensure that they are not left waiting until the last day of the last week of the last month before being told whether they will receive their next payment. Such insecurity is absolutely intolerable.

Mr. Lilley

I recognise that one of the legacies of Mr. Maxwell is the element of insecurity felt about the longer term. All I have been able to do is to try to ease the pressures, anguish and insecurity of the pensioners over this acute short-term period when schemes' funds cannot be allocated to pensioners as those funds are frozen. I do not pretend that we have relieved the longer-term anguish, which is a legacy of Mr. Maxwell.

The hon. Member for Oldham, West is keen to blame the Government for the pensioners' problems. As I said yesterday, crime is caused by criminals and in this case we know who the central villain was. It is nonsense to argue that, because a crime happened, the Government are to blame and so are liable to compensate the victims.

When a burglary occurs, we do not say that the police and property laws for which the Government are responsible have failed, so the Government are to blame and must reimburse every householder. Of course, we must keep under constant review our systems for preventing fraud and theft from pension schemes. If we find sectors where improvements are needed, that cannot be held as an admission of responsibility for crimes that have not been prevented.

Mr. Rupert Allason

I have followed everything said by my right hon. Friend and agreed with him until he apparently said that there was only one person responsible for the crime and we could all blame Mr. Maxwell. In my view, all the directors of Mirror Group Newspapers and everyone connected with Maxwell who have had their fingers in the till for so long should have resigned months ago. Does not my right hon. Friend agree?

Mr. Lilley

I said that the central villain was Robert Maxwell. I am not making any judgment on whether any other people were involved. That is a matter for the Serious Fraud Office to establish.

Mr. James Wallace (Orkney and Shetland)

Will the Secretary of State answer fully the question raised by my hon. Friend the Member for Gordon (Mr. Bruce)? The Secretary of State is basically saying that in 1986 the Government handed over British Airways' helicopter division to the central criminal figure in the scandal. As he said yesterday in response to the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), the Government knew that Maxwell had been reported as unfit to run a public company. Does not the Secretary of State think that, at the very least, the Government have a moral obligation to those British International Helicopter pensioners?

Mr. Lilley

Many of the companies in the Maxwell group were bought from other people. I do not believe that many people would think that previous owners have a moral responsibility for what the subsequent owners do. The helicopter division was bought from British Airways, and British Airways was not required to seek Government approval for that sale.

To return to the issue of blame, the hon. Member for Oldham, West asked specifically about the report of the Securities and Investments Board, and I promised to respond. It is up to the SIB to state whether it intends to publish the report. I understand—although I only have it second hand—that the SIB intends to publish its findings.

The review of pension law was a major aspect of yesterday's announcement. The hon. Member for Oldham, West said that 12 months was too long a period for the review of pensions. I agree that the need is urgent. The House will recall that I have not only asked Professor Goode to report within 12 months, but said that if his committee finds changes that should be implemented urgently, it should report to me sooner. The committee needs time to invite evidence from all interested parties, and it will hold a number of public hearings.

I was interested to note that Sue Ward, a leading pensions expert, said on the Radio 4 PM programme yesterday that the review team would have to work hard to complete its task in 12 months. She said: Twelve months was certainly not too long a time. The Opposition motion states that because of the deep flaws in the current supervisory system the House considers that the new committee to review pension law should not have to take a year to complete its work. I think that most people would consider that, before changes are made to rectify deep flaws, there should be deep reflection.

In his article in The Times, the hon. Member for Birkenhead (Mr. Field) states that he wants the review to consider reforms to make pension contributors holders of their own contributions. We have given the review deliberately wide terms of reference to look at the status and ownership of occupational pension funds. We have not ruled out consideration of the hon. Gentleman's suggestion—far from it. I believe that the hon. Gentleman's ideas are sufficiently attractive to warrant others considering them if the review team feels that they are not relevant to its work.

Mr. Win Griffiths

This debate is principally centred on the Maxwell pension scandal, but the Secretary of State should be aware that pension funds are in deep difficulties. The Oakwood pension plan affects my constituents. It appears that a director of the employers took the major decisions related to the pension plan against the advice of the actuary. Will Professor Goode consider such aspects, as well as considering what went wrong with the Maxwell pension scheme?

Mr. Lilley

Very much so—I am sure that Professor Goode will want to look at any evidence of deficiencies and problems. It would be quite right to do so if we are to change the law and regulate to ensure that such crimes do not recur. I shall draw the issue raised by the hon. Gentleman to Professor Goode's attention.

Mr. Dennis Skinner (Bolsover)

Is the Secretary of State aware that, with the help of the Union of Democratic Mineworkers, British Coal officials have just awarded themselves another pension holiday? What does he think about that in view of the scandal that has come to light? When I met some of the Daily Mirror pensioners yesterday, I bumped into some Daily Express pensioners. They told me that a few years ago the Daily Express changed its pension fund and as a result they do not receive year-on-year increases. The Daily Express officials fiddled the fund and created a new one for the current employees, but those who worked for the paper for 30 or 40 years will not get a penny piece. The Maxwell scandal has highlighted the fact that, across the board, pension managers and organisations such as British Coal and the Daily Express have been fiddling funds and depriving pensioners of their proper entitlement. What is the Secretary of State's view on that?

Mr. Lilley

The Maxwell case was certainly a terrible scandal, but the hon. Member for Bolsover (Mr. Skinner) sees capitalist plots, scandals and conspiracies everywhere. If he intervenes too many times in my speech and his hon. Friends see the names Lilley and Skinner linked together in the pages of the Official Report, they will think that he is part of a major capitalist enterprise—[Interruption.] I never thought that I should see the hon. Member for Bolsover lost for words—

Mr. Skinner

rose—

Mr. Lilley

Those listening to the hon. Members for Oldham, West and for Bolsover would think that occupational pension schemes were disastrous and that all occupational pensioners were at risk of fraud. People listening to the debate will realise that the hon. Member for Oldham, West has a hidden agenda to abolish private pension arrangements and replace them with an expanded state earnings-related pension scheme. The hon. Gentleman is doubly mistaken.

Occupational pension schemes have largely been a great success and 69 per cent. of recently retired pensioners now receive an occupational pension. That compares with just 54 per cent. in 1979. Average incomes from occupational pensions almost doubled between 1979 and 1988, the last year for which we have figures. Moreover, they increased the volume of long-term savings available for long-term investment in industry. There is no way in which public finances could accommodate the sort of expanded SERPS that the hon. Member for Oldham, West would like and appears to have in mind. Future generations could not possibly cope with the level of debt that would be stored up. The success of occupational pensions is matched by personal pensions which now extend to 4.5 million people.

Mr. Andrew Miller (Ellesmere Port and Neston)

Occupational pension schemes may have been extremely successful in recent years. However, does the Secretary of State agree that the profits from those investments, which are nothing less than the deferred earnings of the occupational pensioner, should be redirected in the interests of members of pension schemes and nobody else?

Mr. Lilley

I have explicitly made it possible for Professor Goode to consider that issue in his review.

Personal pensions have dramatically widened the range of people with their own pension to supplement the state pension. They have also increased the volume of committed long-term savings available for investment in industry as well as giving millions of people greater flexibility and mobility. I accept that not just the private sector but the state has a role to play. The Government have ensured that total expenditure on benefits to the elderly has increased since 1979 by one third in real terms.

We have met our commitment to maintain the value of the basic pension and will continue to do so. We have provided systematically for real increases in pensioner premiums by directing money to the poorer pensioners. Overall pensioners' incomes have increased by 34 per cent. since we came to office. That is five times faster than under Labour, not least because under the last Labour Government pensioners lost heavily as a result of inflation. I am not in the mood to listen to self-righteous lectures from the Opposition on protecting pensions.

Mr. Meacher

rose—

Mr. Lilley

The hon. Gentleman had his say.

The Government recognise and share the real concerns expressed by hon. Members and by people outside about Maxwell pensioners. We also share the revulsion at the crime that was committed. We shall give the Maxwell pensioners as much peace of mind as possible about the immediate financial future. We shall help to unlock and to secure the return of assets that will pay the pensions in the months and years ahead. Through the review that we have established we shall do all that we can to ensure that similar crimes can never happen again. We are taking real and practical steps in a highly complex area and I commend them to the House.

8.13 pm

Mr. Frank Field (Birkenhead)

I shall be brief because many hon. Members with constituency interests wish to take part in the debate.

I hope that the debate will send out three clear messages. The first is that the House welcomes the Government's rescue package. At this stage we are not especially interested in the amount of money or in where the idea for the amount came from. The House is anxious to ensure that in the short term every pensioner who was not receiving a pension and all those who were at risk of receiving a reduced pension will receive a full pension. We leave it to the Government to ensure that the funds are adequate to meet that important immediate objective.

The second message which I hope will go out is that the Secretary of State realises the extent of support from all hon. Members for his measures not only to retrieve the funds that were clearly misappropriated, but to reach those people who did well during the Maxwell years and who could make substantial contributions. We shall examine with interest the size of those contributions. I hope that the Secretary of State will not ignore the support in the House and that he will mobilise it if the need arises.

The third message is about the very long term. The Secretary of State rightly said that if he suggested that the taxpayer should foot the bill, few contributions would be forthcoming. He must realise what the feelings of his own hon. Friends and Opposition Members would be if his strategy failed or partially failed. The mood of the House is for him to press on urgently to get the contributions. We shall not be satisfied if at the end of the day those contributions are inadequate. The Secretary of State said that such statements might damage his efforts to regain assets and contributions for the scheme. I think not. Most matters that we deal with depend on the striking of a balance. Jimmy Thomas once said that if one could not ride two horses at once one should not be part of the circus. The Secretary of State must be aware that if his efforts to gain contributions are unsuccessful and he says that there is no help for these pensioners, the mood of the House will not be as easy-going as that of a circus.

8.16 pm

Mr. Stephen Day (Cheadle)

I am grateful for this opportunity to speak on an issue that greatly concerns all hon. Members, and especially those of us who met pensioners yesterday. I am sure that all hon. Members have constituents who are affected. In my constituency, 40 to 50 pensioners are affected. I am sure that those who came to see me, and especially those who had been told that they had received their last cheque, will be well pleased with the Secretary of State's announcement yesterday.

Of course the announcement is no solution to the ultimate problems and the traumas that undoubtedly face pensioners. They have been placed in this situation not by the Government—although to hear the hon. Member for Oldham, West (Mr. Meacher) one would think that it was all the Government's fault—but by those who certainly should have known better and whose actions were no credit to themselves or to the human race.

Whatever our political viewpoint, we are all totally committed, as are the Government, to justice for the pensioners. We must ensure that Maxwell pensioners have long-term security, and the Secretary of State's announcement yesterday goes some way towards providing that. The Government can only give a lead and they have accepted their responsibility by ensuring that short-term security is provided. That was one of the specific aims of the all-party group on which it specifically campaigned. I pay tribute to the hon. Members on that group who saw the issue to its conclusion.

I am distressed at what I heard from the hon. Member for Oldham, West. I have nothing but praise for the way in which the hon. Member for Birkenhead (Mr. Field) spoke. He spoke for me and, I suspect, for many hon. Members in that he encapsulated what I believe to be the true interests of the Maxwell pensioners. The hon. Member for Oldham, West, as I tried to intimate in my intervention during his speech, angered me enormously and did no service to the Maxwell pensioners. The worst possible scenario for the pensioners would be for those of us in the Chamber to start trying to score political points from the suffering of others.

Mr. Graham Allen (Nottingham, North)

That is what the hon. Gentleman is doing now.

Mr. Day

I am making the very points that I have maintained throughout my interest in this subject on the Select Committee and as a member of the all-party group.

Quite rightly, the Select Committee was involved in this matter for some time during the previous Parliament. When we were debating and investigating the issue, we acted on an all-party basis. In fact, there was no division when the report was written as it was supported unanimously. That is the position that I am determined to defend, despite the attempts of the hon. Member for Oldham, West to destroy that consensus. I hope that hon. Members will remember the words of the hon. Member for Birkenhead and those of us who support his stance. If, like myself, he is honoured to be reappointed to the Select Committee and continues as its Chairman, that will be the best thing for the interests of the Maxwell pensioners, as I know that he and most other hon. Members have their interests at heart.

I commend what the Government have done in the short term. I hope. that they will pursue the banks, which have a moral obligation to return the Maxwell pensioners' money that is in their hands because of the illegal action of others. I hope that the House will reject the motion and the intervention of the hon. Member for Oldham, West.

8.22 pm

Mr. Malcolm Bruce (Gordon)

I am glad that the debate is taking place, although not in every case is it being pursued in a way that is likely to achieve the best result. As the hon. Member for Cheadle (Mr. Day) acknowledged, there are probably very few hon. Members who do not have some constituents who are affected. Some of us have substantially more than the hon. Gentleman. I have the operational headquarters of British International Helicopters in my constituency and my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) has its northern base. My hon. Friend the Member for Bath (Mr. Foster) is our representative on the all-party committee and is pushing the case for compensation. He has a substantial number of affected pensioners in his constituency, and my hon. and learned Friend the Member for Montgomery (Mr. Carlile), who intervened during the statement yesterday, also has a considerable number affected. I wish to speak on the general principles on behalf of all my hon. Friends.

I accept to some extent the Secretary of State's argument that, simply because people have broken the law, the Government should not be held fully responsible. However, we must acknowledge that what has arisen in many ordinary people's minds is surprise and shock that it should be possible for people to be able to get their hands on pension fund money in this way. To that extent, the House must welcome an urgent review to try to ensure that we plug that loophole as well as securing compensation for those who have suffered from the fact that the law is not up to scratch now.

It may be a naive question, but millions of people outside the House will probably want to know how it is possible for companies to get their hands on pension funds, which are the payments of employees and which are supposed to be held in trust and run by trustees. Is it right that pension funds should be able to invest in their own companies, given the conflict of interest that arises? Millions of people probably did not realise that that was possible and are surprised to know that it is. I hope that that will be taken into account in the review.

The pensioners have had a long and anxious wait and yesterday's announcement, although welcome, is not the end of the road. I agree with the hon. Member for Birkenhead (Mr. Field) that the argument about the sum of money is really irrelevant. The important issue, as was said yesterday by my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood), is to seek the assurance that for the period designated by the Secretary of State every pensioner who would not be getting a pension because of the parlous state of the pension fund will receive their pension in full. That is the simple assurance that everybody is looking for. The Secretary of State has made progress on that, although I hope that in the reply the Minister will make it absolutely and unequivocally clear that that is the case.

It is inevitable that parallels will be drawn with the Barlow Clowes affair. However. I accept that it is not exactly the same thing. I accept the Secretary of State's argument that to suggest that those who invested in Barlow Clowes were wild speculators is absurd. Nevertheless, there is a recognised distinction in that those people decided to invest in something that was giving a better-than-average return. They were taking a risk and should have appreciated that. However, they did so in the belief that the company was properly regulated by a Government agency. Clearly, the ombudsman took the view that they had some justification for that faith, that the agency had failed and that there was at least a moral responsibility. As a result, the Government put up £180 million as a rescue package.

Pensioners who have deducted at source a percentage of their salary to be invested through trustees to provide them with an income after retirement expect to have a regime that protects the pension fund. They will inevitably make comparisons if they do not secure full compensation. However, I agree with the hon. Member for Birkenhead and the Secretary of State that pressure of every kind must be brought to bear on the banks and the City financial institutions to make a full and proper contribution to the rescue fund. Many questions will be asked and people will want to know under what sort of morality or business practice banks are prepared to hang on to stolen money when its return would save some of their other customers from personal bankruptcy. People will believe, rightly, that the banking profession is in grave danger of bringing itself into disrepute if it does not release that money and contribute to the refunding of the pension fund.

The City institutions must think about this, too. It is important to put it on record that the vast majority of pension funds run by the City of London are honestly and well-managed and achieve substantial capital growth in relation to the contributions made. After all, that is the City's unique reputation in both the national and international market. However, that reputation could be seriously tarnished if this scandal is not resolved in a way that gives honour, satisfaction and comfort to the innocent victims who are very ordinary people.

Mr. Frank Field

Is not the point stronger than that? The pension schemes kept saying that everything was safe and those of us who raised questions about safety and reform were told by the bigwigs in the pension industry that we were creating trouble. It is their moral responsibility to make a large contribution to this scheme.

Mr. Bruce

I am grateful to the hon. Gentleman, who makes the case extremely well. I hope that when the institutions outside the House read this debate they will understand the strength of feeling behind it.

Those institutions should consider an additional point. In the early part of the previous Parliament I was a member of the Select Committee on Trade and Industry. We investigated the implications of the single market for the financial services industry in Britain. The Committee visited many of the main financial centres in Europe, notably, and most importantly, Frankfurt. We pressed the German Government to recognise the expertise that exists in the City of London and the important opportunity for German consumers to gain access to such expertise.

The House will be aware that the Germans thought that the City of London's practices were risky. They did not like the way in which moneys could be mixed without absolute guarantees and security for pensioners. The net result is that German pension funds are more expensive than ours but are more securely guaranteed, or at least that will be the German perception. If City institutions do not contribute, they will severely damage their ability to sell their expertise in the single market as it is established in the next few years. Even if they are not prepared to accept the moral strictures of the House, that fact should be taken into account. It is bad business.

I should like finally to deal with my interest in British International Helicopters. The Secretary of State will be aware that I and others believe that the company is different from others in the Maxwell group, for reasons that were partially explained in my intervention. I am grateful for his agreeing to meet the separate all-party group that has been established, when we will have an opportunity to press our case in more detail.

British International Helicopters was the helicopter company of British Airways when it was a nationalised industry. Its main operational base is at Aberdeen airport in my constituency. It has bases in Sumburgh in Shetland and covering the Scilly isles in the constituency of the hon. Member for St. Ives (Mr. Harris). The company's southern access to the North sea is based in the constituency of the hon. Member for Waveney (Mr. Porter), and its head office is in Oxford.

Since the early days of the North sea, the company has provided taxi services to and from the rigs and platforms. Lord King, the chairman of British Airways, conducted a strenuous campaign to ensure that the Nott assurances—that British Airways should be privatised as a single entity—were honoured. As part of the campaign, myself, the hon. Member for Aberdeen, North (Mr. Hughes) and the then hon. Member for Banff and Buchan were invited to present ourselves—I cannot put it another way—at a public meeting in my constituency, which most of the employees attended. Before several hundred people, we were invited to give categorical assurances that we would support the campaign to privatise British Airways as a single entity.' Not surprisingly, faced with so many constituents, we agreed to do so.

Before the privatisation took place, British Airways sold the company. It tried to sell it to a business man—I remember blowing the whistle on him at Prime Minister's Question Time—who certainly was not fit to run it. It was subsequently sold to Mr. Maxwell, 15 years after the Department of Trade and Industry certified him as not being a fit person to take over a public company. In those circumstances, it is not acceptable for the Secretary of State to take the stance of lecturing City institutions and bankers about the moral position—which I support—while denying the moral pressure that is on the Government for having acceded to the sale.

At the time of the sale, I was told that pension rights would be secured because pensioners would continue to be members of the British Airways pension fund. Later, they were offered inducements and sweeteners to transfer to the Maxwell pension fund, which they were assured—I have the notice here—was a better fund to which British Airways was making a transitional contribution.

Mr. David Harris (St. Ives)

Will the hon. Gentleman confirm that it was a condition of employment with British International Helicopters that pensions be transferred to the Maxwell pension fund? I met two people yesterday who retained partial pension rights in British Airways' pension fund because, they told me, they did not trust Maxwell, but from then on they had to be members of what turned out to be Mirror Group Newspapers. Will the hon. Gentleman confirm that, at the time of the Maxwell bid, the bid of the management of British International Helicopters was rejected? Presumably, the Government had a considerable hand in its rejection. Those are two extra reasons why many hon. Members who represent British International Helicopters staff, past and present, feel that there is a special case to be made.

Mr. Bruce

I am grateful for the hon. Gentleman's intervention. He offers a degree of all-party solidarity to the point that I am making. The terms on which employees could retain their British Airways pension rights were disadvantageous. There was little incentive for anybody to retain those rights, and thereafter they all switched to the Mirror group in circumstances that offered them no real choice. The situation, therefore, is different from that of other companies.

We have never really got to the bottom of who paid what. I wrote to British Airways this year and received a reply from Lord King, who is adept at writing letters that tell one something but not enough. He pointed out that the company that bought British International Helicopters paid more than £12 million—less than the in-house bid. He neglected to say that British Airways subsequently made a payment of £9.5 million to transfer contributions to the pension fund. It is extremely difficult to determine whether Mr. Maxwell's offer was a better net offer to the taxpayer than the in-house offer. Perhaps we shall never know. It is the firm view of the current management of British International Helicopters that at the time of the sale the British Airways Board consulted the then Secretary of State for Transport, John Moore, about the provisional sale agreement with the company owned jointly by the Scottish Daily Record and Sunday Mail and Robert Maxwell. He saw no objection to it and the sale was completed. That shows that, although the Government may not have authorised it, they raised no objections. I repeat what the Secretary of State said yesterday: the warning was made in public for all to see and those who dealt with Maxwell did so potentially knowingly."—[Official Report, 8 June 1992; Vol. 209, c. 26.] That includes the Government, and they have a moral obligation.

The Secretary of State said earlier that he was treating pensioners as part of the Mirror group pension fund. The Mirror group has thrown them out of the pension fund unilaterally, having kicked out the trustee some time previously. They are not part of the Mirror group pension fund but are standing on their own. In those circumstances, I hope that the Secretary of State will accept that the position of British International Helicopters is different from that of any other company. If anyone is entitled to full compensation, its employees are. All those who trusted the City, the banks and the regulatory regime have every reason to believe that they should get not only a short-term rescue package that eases their immediate problems but a full-scale rescue package to which all those who have benefited from Maxwell in the past make a full and positive contribution.

Several Hon. Members

rose—

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. Many right hon. Members hope to speak. Short speeches will enable hon. Members to catch my eye; lengthy interventions do not help.

8.38 pm

Mr. Oliver Heald (Hertfordshire, North)

I should like to thank you, Mr. Deputy Speaker, for asking me to speak for the first time in this debate, in which I have a constituency interest.

My immediate predecessor as Member for Hertfordshire, North was Sir Ian Stewart, who came to the House in 1974. He was an expert in economic affairs and finance and was known as a numismatist—an expert on coinage. He started as PPS to Sir Geoffrey Howe, became a Treasury Minister and subsequently was Minister for the Armed Forces and Northern Ireland security Minister. I know that all hon. Members will be sad that he had to retire through ill-health. In the constituency, he is remembered for his vigorous efforts on behalf of his constituents. His immediate predecessor was Shirley Williams who is remembered as a hard-working constituency Member of Parliament, although she did not always attend events on time. Of course, she also had a notable ministerial career, so I have a lot to live up to.

North Hertfordshire covers the towns of Royston, Baldock, Letchworth and Hitchin and three ancient market towns. Letchworth was the first garden city, set up by Ebenezer Howard in 1903. It has recently reached the size originally intended for it—30,000 people—and is a city concept that has been followed the world over. It has many imitators as far away as Japan.

Because of the time restriction, I shall not mention all the interests in north Hertfordshire in the traditional way. We want to protect the local environment, we want roads but we do not want them to spoil the villages and, in addition, we have lost many defence jobs. North Hertfordshire is presently applying for EC periphera funding to ease the change to employment in other industries, which should be successful.

The issue that has dominated my post bag since I arrived in the House has been that of the Maxwell pensioners. BDC Technical Services Ltd. of Baldock is a member of the AGB pension fund, and there has been considerable anxiety and distress among many of my constituents. I give two examples. I quote from a letter by a 63-year-old man who recently retired because of heart disease. He wrote: I am now informed that my pension will not be paid after June 1992. I always assumed that the pension scheme was as safe as the Bank of England. I am very concerned about my future. I also received a letter from a 78-year-old woman, who wrote: My pension payment is £59 per month, a relatively small amount, but quite important to me as apart from my old age pension, it is my only other income.

Therefore, when I heard that there was an all-party group of hon. Members fighting on behalf of the Maxwell pensioners, the first thing that I did was join it. The words that we heard tonight from the hon. Member for Birkenhead (Mr. Field) were exactly those that he used at the first meeting of the group and on which we all agreed and which, I believe, have had a powerful effect on the Government.

When I explained to the Maxwell pensioners in north Hertfordshire what was proposed by the all-party group, they were more than satisfied with the fight being put up on their behalf. They were here yesterday to lobby, and I spoke to them shortly after the statement. They were relieved and content that the payments were to be continued with the life-belt funding for which we had argued.

I believe that the spectacle of major banks holding on to securities stolen from the pension funds is disgraceful. They should give back the assets. As a lawyer, I appreciate that there might be nice legal arguments to be employed by the banks. It might be that the argument that the banks' licences should be withdrawn is a complete non-starter because there are legal arguments that can be employed by the banks.

However, the case that must be made is the moral one. A second-hand shop that buys stolen goods expects to give them back if it is later discovered that they were stolen. For major banks—for example, National Westminster—to refuse to return the securities is a disgrace, and it is right that moral pressure should be applied. Legal pressure would possibly not work, but I am sure that the moral pressures that the House can bring to bear have every chance of success. That is why I welcomed the Government's statement. It seemed that what was being said was that the drip-feed funding would enable pensioners to have peace of mind while the institutions were approached seriously and to be made to meet their responsibilities.

With regard to the deliberations of the Goode committee, there are three aspects that I hope will be considered. It will take a year for a major aspect of law such as this to be considered because the complexities—and I am a lawyer—seem to be marked. Let as first consider trust law. For years, ever since they began, occupational pension funds have been governed by the principles of trust law. The great advantage of trusts has always been their flexibility—that for generation after generation they can meet modern conditions—but what seems to have gone wrong with occupational pension funds which are self-managed is that that flexibility has been used by the employer to dominate the fund and to put himself in a position in which, if he is dishonest, he can take advantage of the trust in a way which no lawyer would condone and which now needs serious consideration.

It seems that trust law is no longer adequate for the purpose of dealing with the large occupational pension funds and that what needs to be considered is a system of regulation akin to the Companies Acts which requires regular accounts and statements to beneficiaries, the possibility of annual pensioners' meetings and penalties for non-compliance. The type of regulation required is so wide-ranging—one has only to think of what the Companies Acts requires—that it will take at least a year to put together a proper system.

Every share certificate or document of title in respect of a pension fund asset should have it clearly marked on the document, and the register of shareholdings kept at Companies house should be annotated to that effect. There are numerous registers in the legal world including the land registry and many others, all of which are capable of having such an annotation system imposed on them. It has worked extremely well with the class F land charge which applies in matrimonial proceedings and protects wives in respect of houses. There is no reason why the same principle in this aspect of law should not be applied to ensure that shareholdings are protected equally.

Another matter that I hope will be considered is a permanent compensation scheme to help the victims of pension fraud with reference to occupational pensions. It should be funded by a levy across the pensions industry. It could start in the way outlined yesterday by my right hon. Friend the Secretary of State and could become a settled part of a new pensions Act, giving peace of mind to occupational pensioners.

I believe in occupational pensions and in the remarkable change which they have wrought in British society in the past 20 or 30 years. Pensioners as a group are now the fastest rising income group in society, largely due to the confidence they have had in occupational pensions and, of course, in the private schemes which have already been mentioned. It is absolutely right that they should have a copper-bottomed guarantee that their pensions are safe so that the hope of my constituents is met by pensions being as safe as the Bank of England.

8.47pm

Ms. Janet Anderson (Rossendale and Darwen)

May I congratulate the hon. Member for Hertfordshire, North (Mr. Heald) on an excellent maiden speech. His experience on the soap box at Speakers' corner will obviously stand him in good stead in his future career in the House.

I am grateful for this opportunity to make my maiden speech as the hon. Member for Rossendale and Darwen, a constituency which embraces five proud, separate and independent towns—Darwen, Haslingden, Rawtenstall, Bacup and Whitworth—and which has previously been represented by the late Tony Greenwood—later Lord Greenwood of Rossendale—and Mike Noble, both of whom are still remembered with great affection by many of their former constituents.

I am also fortunate to have the honour to represent a constituency which must rank among those with the greatest areas of natural beauty. When I am able to enjoy the rare opportunities for recreation which hon. Members have with their families, walking along the Rossendale way, through Sunnyhurst woods to Darwen tower, or across the west Pennine moors, stopping when we can for refreshment at the Strawbury Duck in Entwistle, or to watch the Britannia Coconutters at Rawtenstall station on the recently reopened east Lancashire line, I count myself very lucky indeed.

It was, therefore, appropriate that my predecessor should have served in the previous Government as Minister for the Countryside and that he should have represented a truly northern constituency. The recently knighted former hon. Member for Rossendale and Darwen, David Trippier, will surely be remembered as the Mr. Green and the Mr. North of the Conservative Benches. Not only was he one of few Conservative Members to have been born north of Watford, but he displayed a real understanding of the needs of the northern region. I take this opportunity of congratulating Sir David on his newly acquired status, and I wish him well in his chosen new career.

It is also apt that I should have the opportunity to speak in a debate on the protection of pensioners and their rights. Almost one in five of my constituents are of pensionable age. The majority of them have toiled for years in the shoe factories and the textile mills, often for meagre wages. During the past 13 years, too many of them have lost their jobs, time and again, yet they have struggled to retrain, to bounce back and to do their best for their families. It has come as a great shock to some of them to find that years of contributions to pension funds have left them with little.

We are here tonight to talk about the plight of the Maxwell pensioners, and I will come to that as there are many of them in my constituency. However, I must tell the House that a similar plight has befallen my constituents who worked in shoe and textile factories which have gone to the wall and who have then found that their pensions are no longer secure. It is essential that the Government introduce measures to give greater protection to all members of occupational pension schemes.

One example illustrates the problem clearly. One of my constituents is a current pensioner of AGB Research, a company that has already been mentioned in the debate. It was one of many companies privately owned by Robert Maxwell. My constituent worked from 1925 until 1972 for the Newton Chambers group of companies. A mandatory condition of his employment was the joining of the company's pension scheme to which he contributed for no fewer than 47 years.

At present, he has a pension of £1,157 a year from the Maxwell-owned Headington group pension, formerly Pergamon. Through a series of takeovers, the Newton Chambers pension fund finally landed in the hands of the Maxwell group. My constituent has now been informed that his pension fund is being wound up.

My constituent is 83 years old and his wife is 73. His current works pension helps to pay his poll tax liability, and his electricity, gas and water bills—charges which, as the House is only too well aware, continue their relentless increase. If my constituent loses his pension, he will not only have difficulty in meeting those bills, but he and his wife will also have to sell their small car, which is essential at their age for shopping and local journeys.

I cannot help wondering whether, as Mrs. Maxwell languishes in her French chateau and the younger Maxwells continue to enjoy their apparently opulent lifestyle, they ever give a thought to my constituent who, any day now, may no longer be able to depend on the little extra which enables him and his wife to do their shopping, to visit the doctor, to see family and friends with reasonable ease, and to maintain dignity and independence.

Of course, my constituent is not alone in his plight; thousands are similarly affected. The Government have a moral responsibility to all those whose pensions have been stolen by an unscrupulous employer. The reason why the Government should accept that they have that responsibility is that the money, the deferred earnings of ordinary working people, was taken from them by virtue of a bad law. A number of guilty parties are involved—the Government, the banks and the regulators—but the one group who are entirely innocent are the pensioners.

The problem is one of loose law. Pension funds are covered only in part by the Financial Services Act 1986; they are mainly covered by trust law. Under that, regulation is looser and the position of trustees under the law is unclear. Both the Investment Management Regulatory Organisation and the Securities and Investments Board warned the Department of Trade and Industry on a number of occasions of the problems that would arise because of the discrepancy between trust law and the Financial Services Act. Indeed, the Hayton report, commissioned and published by IMRO and the SIB, made that point.

We must ask why the Department did not heed the warnings. In the short term, we need proper compensation for the pensioners whose pensions have been stopped or reduced. The Government conceded the principle of compensation for the Barlow Clowes victims. Those investors had at least made a conscious decision to make a financial risk investment. The pensioners whom we are considering tonight believed that they were taking no risk and that their futures were secure. Moreover, for many of them, contributions to the pension scheme were a mandatory condition of their employment. They had no choice.

There must be a considerable extension of the rights of pensioners in all occupational pension schemes. They must have information about their pensions, such as where they are being invested and their on-going values. The Government must guarantee that no pensioner will suffer as a result of this fraud.

An urgent review of the legislation is essential. Pensioners must be treated as preferential creditors of pension funds, increasing their protection and their right to compensation. The review must include a statutory compensation scheme. The discrepancy between trust law and the Financial Services Act must be resolved and the law must ensure the independence of trustees from employers.

This is a sad and sorry episode out of which none of the parties—the Government, the banks or the regulators—emerges with credit. They should all accept their responsibilities now, and they should do so with good grace.

8.55 pm

Mr. David Shaw (Dover)

We have just heard two excellent maiden speeches. I congratulate my hon. Friend the Member for Hertfordshire, North (Mr. Heald) on his maiden speech, which displayed considerable knowledge about his constituents and their problems, especially in relation to the Maxwell affair. I also congratulate the hon. Member for Rossendale and Darwen (Ms. Anderson) on her maiden speech. I predict early promotion for her to the Opposition Front Bench as I noted that the whole House enjoyed listening to her. I also believe that the whole House enjoyed listening to her fulsome and appropriate comments about her predecessor, who was much loved by all hon. Members, especially Conservative Members. David Trippier co-ordinated the Royal Marines group of Members in the House as well as carrying out extensive ministerial duties on environment issues. He also took a strong interest in small businesses. I am delighted that the Queen has made him a knight of the realm.

The debate is about the Government measures that were announced yesterday to protect the Maxwell pensioners and about other issues. Those measures were right and my right hon. Friend the Secretary of State for Social Security has done well in extracting help for the Maxwell pensioners from the Treasury at a time when there are many competing demands on the social security expenditure budget.

Those Government measures should meet the immediate needs of the 5,000 Maxwell Communication Corporation works pensioners who face reduced pensions from this month and the 240 people in the Headington pension plan whose pensions have been stopped.

The measures are a welcome start while the recovery of the money takes place with a view to ensuring that the pension funds are fully, or almost fully, restored to what they were. That is why the implementation by the Government of section 58B of the Social Security Act 1990 and the setting up of a recovery unit in the Department of Social Security are most helpful. Those actions should result in much of the money being recovered.

This tragedy, which has brought misery to 32,000 people, is a disgrace. It is a disgrace which reflects very badly on the regulator, the banks and the financial institutions that had dealings with Mr. Maxwell. Yes, Mr. Maxwell may have committed the frauds, but the banks, financial institutions and bad regulation made it possible for him to do so. Regretfully, I must say that IMRO is first in line. I say "regretfully" because I believe that the IMRO representatives who appeared before the Select Committee were honest and well meaning. I do not believe, however, that they and their colleagues had the necessary skills and support to deal with the problems that they faced. There were failures in authorisation on the part of IMRO: neither Bishopsgate Investment Management nor LBI should have been authorised. The implications of the Liechtenstein connection were not understood by IMRO.

IMRO should have realised, first, that no recovery of money can occur if fraud takes place in a Liechtenstein operation; secondly, that no up-to-date financial information will ever be available for a Liechtenstein-controlled operation; and, thirdly, that Mr. Maxwell—who was in absolute control—was likely to trade fraudulently in the end, because honest United Kingdom businesses do not need to operate from Liechtenstein. There was obviously bad regulation by IMRO of the two Maxwell companies. Accounting weaknesses were found; there was no adequate separation of duties within the companies; Maxwell controlled absolutely everything, and IMRO staff were too junior and too inexperienced to handle a man like Maxwell.

I find it strange that, even as I speak, at least £6 billion of United Kingdom investors' money is still controlled from Liechtenstein. GT Fund Management Group, a United Kingdom company, was taken over by the Bank of Liechtenstein in 1991, and IMRO is its regulator. That is a disaster waiting to happen. Who will pay up when the collapse occurs, as it surely will one day? The City regulators seem afraid to act, because the bank is controlled by the Prince of Liechtenstein. What does he know about fund management that Robert Maxwell did not know?

It is, however, the banks, in their many different roles, that are to blame for most of the losses incurred by the pension funds. Those banks range from the simple London clearing bank to some of the most sophisticated investment banks in the world. The position is not straightforward; what is clear and simple is the fact that they all failed to act properly, either because of incompetence, weak accounting and weak internal control systems or because of greed, recklessness or even criminal intent—I believe that that applies to at least one case.

In my view, the lending banks were negligent or reckless. They did not ask for consolidated accounts; it seems that they did not even ask for accounts of the entity to which they were lending. They did not check the gearing—the debt-to-equity ratio—of Mr. Maxwell's empire, or the cash flow of the group or of individual companies. Warnings in the media went unheeded by the bankers. On 5 November 1988, for instance, the Financial Times Lex column commented: Again the need to degear now makes Mr. Maxwell something of a forced seller. He was indeed a forced seller, but a forced seller of the pensioners' assets rather than his own.

The investment banks that dealt in MCC shares have a heavy responsibility for the losses that were incurred. Their option arrangements were—if not illegal—devious. Moreover, MCC share purchases through Liechtenstein were clearly designed to avoid City rules and Companies Act disclosures. When one of the smartest investment banks in the world says that it did not know that Mr. Maxwell was behind the Liechtenstein purchases of MCC shares, the position is unbelievable. If an investment hank is as stupid as that, it is not fit to be in business and its banking licence should be withdrawn.

At least one investment banker in New York knew enough to be suspicious. He should have refused to carry out the share transactions; instead, he asked Mr. Maxwell the simplest of questions, and Mr. Maxwell told that sophisticated investment banker the simplest of lies.

The MCC share transactions carried out by that banker were designed to circumvent the voluntary code under which the City operates. There is no point in self-regulation if investment bankers can get away with hundreds of millions of pounds in shady deals without so much as a fine from the body that is responsible for their regulation. The Bank of England must show that it is prepared to withdraw banking licences; the stock exchange must show that it is prepared to withdraw authorisation to deal.

If the Bank of England and the stock exchange have neither the teeth nor the inclination to regulate the banks in regard to the Maxwell affair—given that the banks have so blatantly disregarded the principles behind the stock exchange's rules and regulations, and company law—we must all ask what is the point of self-regulation. So far, the Maxwell affair has shown it to be a fraudster's paradise, in which only the little man loses.

If the Bank of England and the stock exchange cannot police the United States investment banks, I hope that Members of Parliament will take the Maxwell pensioners' case to our friends in the United States Congress, as well as those in the United States Securities and Exchange Commission and the Federal Reserve Bank of New York. They, at least, can police the United States investment banks, and they have the teeth and the inclination to do it.

What of the custodian banks? They pride themselves on looking after mutual funds and pension fund assets. Some £38 million of Maxwell pensioners' investments were passed by the Bank of America to Credit Suisse for use by the Maxwell family in transactions not authorised by the full trustees of the pension funds. I hope that those banks will speedily arrange to replace the lost investments. Those banks must realise that their credibility as custodians and lending institutions is being called into question by Members of Parliament and the public. That will damage their future business in this country and abroad.

What of the fund management companies which lent shares, often registered with pension fund ownership marked clearly on the share certificates, back to Mr. Maxwell on the signature of Kevin Maxwell? About £38.5 million and £11.5 million respectively were removed from Capel Cure Myers and Invesco MIM fund management by complex stock lending fiddles involving the Maxwells, and again without the authorisation or knowledge of the pension fund trustees. Those investment houses must make good that shortfall, and soon. We should make it clear that those banks and investment institutions that hold back until the matter goes to court will not be popular, and I hope that that is an understatement.

I wish to make two brief points about Liechtenstein and the other tax havens. How can the Government go on allowing tax havens such as Liechtenstein to help in robbing our citizens? In the past 10 years, at least nine Department of Trade and Industry investigations have found fraud or wrongdoing and have named Switzerland or Liechtenstein. When will the Government act to prevent that from happening again? The Treasury and the Department of Trade and Industry must surely be at risk of being accused of negligence if they do not take action to protect our citizens from Liechtenstein and other tax havens which are robbing many of our citizens.

I have been told by the DTI that the Financial Services Act 1986 powers to trace and recover assets cannot be used in Liechtenstein or even outside the United Kingdom. That is not good enough. We must have changes to make sure that we have the powers to do so.

The motion implies that the Government are to blame. That is clearly wrong. So far, there is no evidence to suggest that the DTI wrongly licensed LBI in 1988, although, of course, there is an argument that the legislation that allowed LBI to be registered was inadequate, but that legislation was supported by three Labour Governments. If anyone is to blame, it is a number of close Labour party friends who were responsible for pensioners' money. Indeed, one man in the House of Lords is sitting on £0.5 million of pensioners' assets.

Mr. Deputy Speaker

Order. It is out of order to criticise a Member of the House of Lords.

Mr. Shaw

I am sorry, Mr. Deputy Speaker. I withdraw any comment about the member of the House of Lords, other than the fact that I hope that any man who benefited to the tune of £0.5 million from LBI would want to repay that money as soon as possible.

I am disappointed also to know that, apparently, the Serious Fraud Office may yet have to go through another 12 months' work before charges might be brought. I hope that Ministers will ensure that the Serious Fraud Office has every possible support to bring early charges. We must find a better way of bringing to justice people who have taken pensioners' money by criminal acts.

Although responsibility for the Maxwell affair must rest with the financial institutions, the Government have a role. They must protect the small man against the big institutions which, in this case, acted out of self-interest and not their real customers' interest. Ultimately, the Government must ensure that no Maxwell pensioner loses his home or goes hungry through the failings of our financial institutions.

9.8 pm

Mr. Ron Leighton (Newham, North-East)

We have been privileged to hear remarkable maiden speeches by my hon. Friend the Member for Rossendale and Darwen (Ms. Anderson) and by the hon. Member for Hertfordshire, North (Mr. Heald). I am sure that the House will want to hear from them again very soon.

Before I came to the House, I worked as a printer on the Maxwell publications, although that was before Maxwell owned them. As a result, I know a large number of Maxwell pensioners. I worked with them, and I know them to be honest, decent, responsible and prudent people who always paid in for their pensions. They regarded their pensions as their most important and valuable asset, perhaps after their house—the foundation of their lives in retirement. They put their trust in the pensions industry and the financial houses. After all, the financial houses were all led by people who were Sirs or Lords, people who were always mentioned in the honours list. The employees thought that they lived in a law-governed society. All the firms were licensed by the Government and therefore they thought that their pensions were as safe as the Bank of England.

Then came along Mr. Maxwell. He took over companies such as the Mirror Group and others. There was immediate fear and unease among members of pension schemes. I received a deputation in the House from the Daily Mirror led by Mr. Joe Lynch, who told me that Maxwell was taking over the Daily Mirror only to get his hands on the pension fund. He told me that if Mr. Maxwell could get the pension fund, which was worth about £500 million, he would get the Daily Mirror for nothing. I was told by the workers in that firm that that was what it was all about.

The members of the deputation asked me what protection they had in law. I am not an expert in the law but I looked into the matter. It seemed to me that they had precious little protection. In Britain the protection of the law for pension funds is inadequate.

I arranged a meeting for the Daily Mirror employees with my hon. Friend the Member for Dagenham (Mr. Gould) who at that time was Opposition Front-Bench spokesman on the subject. The purpose of the meeting was to discuss the changes that a Labour Government would need to make. Unfortunately, the Labour Government was not to be.

The first thing that Maxwell did when he went into the Mirror Group was to arrange a pensions holiday. He stopped paying any money into the pension fund. He was interested only in taking money out. Of course, he then took over many other firms and their pension funds and systematically robbed them. Can the House imagine and understand the pain, anguish, suffering and misery of the law-abiding citizens who had done everything right, acted prudently and religiously paid in their moneys only to find that their greatest asset, rightfully theirs, the foundation of their future life, had been stolen? They were robbed not by a burglar with a mask but by the chairmen of companies and City gents. The Maxwell pensioners came to me and asked how it was possible in this country of ours that such a thing could happen under the law and under the rules of the City.

We in the House must start asking ourselves a few questions about banks. I believe that the banks are serving us badly. They are letting us down. We all used to believe that the banks gave us great benefits in terms of the balance of payments. We believed that we gained great benefit from the City and its invisible exports. We were all in awe of the City. We are no longer. The City and its short-termism is perhaps the major cause of our problems. It makes one appalling mistake after another with our money.

For example, when the Reichmann brothers got off the aeroplane, the banks immediately offered them bundles and bundles of used fivers and tenners. Now the firm has gone bust. The same thing happened with Maxwell. A Department of Trade and Industry report said that he was not a fit man to run a company. Yet the banks of this country fell over themselves to give him large loans. Did not they understand what sort of man they were dealing with? Did they know what day of the week it was?

The banks took the pension assets as collateral. Were they naive? Were they born yesterday? Did the banks, the people whom we have always been told to look up to, have the slightest clue what they were doing? They got it madly wrong. If the banks got it madly wrong, it is down to them. It is their fault. They are now in possession of stolen property. They have the pension assets which were stolen. What do other people do when they have stolen property? If you or I had stolen property, Mr. Deputy Speaker, what would we have to do? We must say that Parliament expects the banks to hand back that stolen property. Yesterday, both Opposition and Conservative Members and in particular the hon. Member for Horsham (Sir P. Hordern) made that point.

The second matter that my old workmates, the Maxwell pensioners, drew to my attention was that the Maxwell empire appears to be bust, as it has no money to pay them. In that case, they ask, how can the Maxwell family have such a lavish, millionaire lifestyle? Someone said that the Maxwell brothers are allowed £1,600 per week—I had thought that it was £1,500. We have heard about their large and expensive houses. I have been asked how that is possible or justifiable if there is no money. I do not know. Perhaps we shall find out this evening.

Maxwell was not alone—it was not possible for one man to commit such crimes—but was aided and abetted by many professional people in the City and elsewhere. What about the law? I have been asked whether it is legal to do that sort of thing. What will happen to all those people who aided and abetted him? Why have there been no prosecutions and no convictions? Why have all the crooks and criminals so far gone scot-free?

The Maxwell brothers did not answer the questions when they were brought before the Select Committee. Their expensive lawyers said that they did not answer because they were liable to prosecution, but where are the prosecutions? There have not been any. Why not? If there are not to be any, the brothers should be brought back before the Select Committee and the House so that we can deal with them.

The last question that my old workmates asked me concerns the regulatory structure. They think that they live in a law-governed society. They asked how it could happen. We have laws and regulatory authorities, but it is clear that those authorities have proved totally inadequate.

The Department of Trade and Industry issued a licence, under the Prevention of Fraud (Investments) Act 1958, to London and Bishopsgate Investments' management—a Maxwell company—on 26 April 1988. It is true that Robert Maxwell was not originally a director, but Kevin Maxwell was and everybody knew it. Could the DTI not have put two and two together? Is that asking too much? Did it not understand that Kevin Maxwell did everything that his father told him and was not an independent person? Why did the DTI not look into a company in which Kevin Maxwell was a director? Three days later, on 29 April, IMRO, gave its approval and shortly after Robert Maxwell lent his name to the company.

The sole purpose of London and Bishopsgate Investments and its sister company was to divert £500 million of pension money into untouchable Liechtenstein accounts—to rob the pension funds of their money.

What is the truth that the House must cope with and explain to the pensioners? The DTI and IMRO granted a licence to plunder and pillage the pension funds of thousands of innocent people. The authorities were culpable and negligent and the pensioners were victims not only of fraud but of the official regulatory bodies which failed to protect them. The analogy has been made with Barlow Clowes. It was explained in that case that the authorities were negligent, and the Government put up £160 million to rescue them, although investors in that company knowingly invested offshore for a higher dividend and were taking a risk. The pensioners in the Maxwell empire took no risks. They were honourable and innocent. They were the misused victims of negligence and crime. Whoever should pay, it should not be the pensioners.

After many months, the Government—at long last, tardily, reluctantly, as a result of the pressure of the lobby that we saw yesterday and this debate—have accepted some responsibility. They have realised that they cannot pass by on the other side, but their promise of £2.5 million is inadequate. The fears and the worries of the pensioners whom I met yesterday have not been assuaged. The Government should underwrite the pensions. They should ensure that pensioners get 100 per cent. of that to which they are entitled. However, this should not be achieved solely through the use of taxpayers' money. They should get the cash from the Maxwell companies, from the banks and from the £300 billion-rich pension industry, all of which ought to pick up the tab. There should be some convictions. People should be punished for these crimes, which were committed by others besides Maxwell. What the Government have done so far is inadequate.

9.21 pm

Mr. Mark Wolfson (Sevenoaks)

I shall be brief because I know that others wish to contribute to the debate, but I must begin by adding to the congratulations on the two maiden speeches, which were first class both in brevity, bearing in mind the pressure of the debate, and in substance. I was particularly pleased to hear my hon. Friend the Member for Hertfordshire, North (Mr. Heald) refer to his predecessor, Sir Ian Stewart, as he was a good friend of mine. As my hon. Friend said, he has a good reputation to maintain.

We are debating an exceptional fraud. Maxwell appeared as a character larger than life to all who knew him and to all who knew of him. In death he has turned out to be a criminal of quite staggering proportions, a man without scruple, determined to the end to get his own way whatever the cost to anyone else.

The members of his family still have the opportunity to recover something of their shattered reputation by co-operating with the investigation to recover the stolen assets of these pension funds. They should do so now. The country has had enough of their blocking tactics, and so has Parliament. As many hon. Members have said in this debate tonight, we must also take into account the advisers to the Maxwells and the many others who were involved and should be assisting in the restitution of these funds, instead of keeping their heads down and avoiding the difficulties that they should face.

I have a number of Maxwell pensioners in my constituency and I speak for them today, but I have a broader interest in the good standing of all company pension funds and the good name of the City of London, where I worked in the personnel field for many years. Employers usually have no option but to contribute to their company funds and all of us would regard a company's contributions to its employees' pension funds as part of a total earnings package, part of the contract of employment. That is exactly what it is. No reasonable person can possibly disagree with the contention that the Maxwell pensioners are the innocent victims of a massive fraud and if ever individuals deserved to have a wrong fully righted, it is these men and women. Righting of the wrong must involve several sources—all have a part to play.

I welcome the Government's initiative. It is essential, it is timely and it deals with the immediate difficulties. Yesterday my right hon. Friend gave the news to the House in the expectation that—he confirmed this today—it would meet the immediate needs of all pensioners. If it does not meet that expectation, I must tell my right hon. and hon. Friends on the Front Bench that many hon. Members from both sides of the House will ask for more. As of now, I am satisfied with the action as a first step.

The hon. Member for Oldham, West (Mr. Meacher) said yesterday that the amount provided was derisory, but I cannot agree with that. He was considering the sum against the total figure, not against the immediate needs that it is designed to meet. The Secretary of State has confirmed today, in a key phrase, that the objective of the immediate rescue package is that the funds should he able to resume or maintain payment to their members.

I also welcome the decision to set up a special unit. However, will the number and quality of people working in that unit be adequate? Will they have the necessary clout to give Government weight to solving and investigating the problems? They will be dealing with many heavyweight people, who will not readily forward the information that they should. Therefore, it is important that the unit has strong personnel.

I agree with the point that has been made many times in the debate that those banks—we must not include all banks in such strictures—that lent to Maxwell against the assets of his pension funds have a clear moral, as well as a legal, obligation. Further to the moral obligation, I pick up the point made by the hon. Member for Gordon (Mr. Bruce) who focused on the business standing of those banks. Surely good banking judgment is about making sure that the assets against which one lends are sound. In the Maxwell case, the assets have been found not only to be unsound, but stolen. Therefore, the banks involved remain as shining examples of bad bankers to all the world. It is in those banks' interests to return the funds as rapidly as possible. We look to them to take that action.

I believe that it is absolutely proper for the Secretary of State to set up a fund to accept contributions to help deal with the problem of the pensioners. I look to the pension industry, which has no insurance system at this stage, to give serious consideration to whether it should ensure its future standing and the sense of security of members of pension funds all over Britain by making some contribution to meet the shortfall.

Certainly, the review of pension schemes is essential. I do not disagree with the time limit of a year. We always knew that, whenever such a review took place, it would be complicated and would require a great amount of consultation. However, the review should take no longer than a year. I welcome the statement of the Secretary of State today that he will act upon some of the urgent recommendations that may be part of the review before the end of that year.

We live in a capitalist society. The takeover of companies always causes major worries for their employees. The Maxwell example has shown that a takeover can put the soundest of pension schemes at extreme risk. Therefore, the whole business of takeovers, when linked to that type of example, is put into a bad light. So the City as a whole—the regulatory bodies, the Bank of England, the banks involved and the pensions industry—has a strong moral obligation as well as self-interest to see the Maxwell pensioners right in the long term.

9.30 pm

Mr. Ian McCartney (Makerfield)

I am grateful for this opportunity to take part in the debate, and I promise not to exceed the time allocated for speeches. As a member of the Select Committee on Social Security in the last Parliament, I shall make only a few points and not go over those made by other hon. Members. If the House is seized of the matters which deserve urgent action, some early decisions must be taken.

I congratulate the occupants of the Opposition Front Bench, because without the motion the Government would not have provided time to debate this and interrelated issues. The Government should have agreed some time ago, because of the seriousness of the matter, to provide time for a wide-ranging debate. It should not have been left to the Opposition to find time for what must be inadequate consideration of this important matter.

The Secretary of State paid credit yesterday and today to the work of the Select Committee. I do not say that just because I was a member of it. Members of the Committee from both sides agreed when we discussed the case that our recommendations would be driven by the evidence that we collated, and by no other means. So our recommendations present the Government with an ideal method of dealing with the issue in the short and long term.

The Government business managers should give a clear assurance at business questions this week that time will be provided before the summer recess to debate the Select Committee's report. It contains five pages of recommendations, yet the Secretary of State has to date accepted only one recommendation. If he is really serious about doing something over the scandal, for the pensions industry and for the future security of pensioners, he will ensure that the House has ample opportunity to debate those five pages of recommendations.

Both Front Benches must give urgent consideration to the fact that the Select Committee on Social Security will not be re-established before the summer recess. Only by reconstituting it will there be adequate opportunity to debate all the issues. If its re-establishment is delayed until the autumn, it will take until March of next year before the Committee continues to deal with the issues that were before it prior to the general election.

That is an unsatisfactory state of affairs, and the business managers on both sides must explain why the appropriate orders for the establishment of the Select Committee have not been laid before the House. It is not good enough to say that it must wait until after the shadow Cabinet election or other matters relating to Opposition business have been settled. The work of the Select Committee is too important to be left to the indecision of business managers. I hope that, without delay, orders will be placed before the House to enable the Committee to start its work before the summer recess.

Mr. David Shaw

rose—

Mr. McCartney

I will not give way because I have only a few minutes in which to speak. I hope that the hon. Gentleman will have ample opportunity to speak on the subject in the Select Committee before the summer recess.

I have a suggestion for the Government if they think that my hon. Friend the Member for Oldham, West (Mr. Meacher) was churlish in his remarks about their lifebelt proposals. There was almost unanimous support from both sides of the House for the principle set out in the Minister's statement. I am not prepared to say something in private to the Select Committee and then stand on the Back Benches in public and say something different. The concepts contained in the Minister's statement yesterday were the very concepts that were unanimously agreed by the Select Committee. I stand by that.

However, doubt is being expressed both inside and outside the House about the adequacy of the proposals. So far, the debate has shown good will to the Select Committee and the all-party group, and I suggest that arrangements are made for regular contact between both Front Benches and the all-party group to take cognisance of whether it will be necessary at some stage to provide further resources. The Minister could then have no objection to the involvement of the Opposition Front Bench in considering the adequacy of the proposals put forward yesterday.

Mr. Alan Simpson (Nottingham, South)

Does my hon. Friend agree with me that the Government's offer yesterday was regarded as derisory because it amounted to little more than the loan of "half a Gazza" when Maxwell pensioners' demands were for the whole of the Lazio team? Many of the Maxwell pensioners see the only prospect of getting those funds through the strategy set down in the early-day motion that I submitted today, which asks the Government to use its full powers of sequestration against the banks, investment institutions, individuals and foreign-based companies to recover all the monies stolen from the Maxwell pensioners". If the Government would not hesitate to do so against the miners in 1984, they should not hesitate to do so against the bankers today.

Mr. McCartney

My hon. Friend makes a powerful point. That is why I have been arguing that the House should make time to debate the consequences of the Select Committee report and should make regulations to allow that Committee's work to continue. Before the general election we were considering how we could provide for the return of the assets and deal with the difficulties of international law in returning assets from Liechtenstein and other places. The Select Committee must be allowed to continue that work.

The hon. Member for Dover (Mr. Shaw) was being rather kind, to say the least, to those who came before the Select Committee for IMRO. In reality, they were totally inadequate for the job that they were trying to perform. Moreover, they were inexperienced in the role and work of the City. What was wrong was the self-regulatory basis of IMRO, which was ill-prepared and unprepared to take action at the outset in respect of the Maxwell companies. Had they taken that action, many of the problems that have arisen as a result of the loss of hundreds of millions of pounds of assets would not have arisen.

The Government should, at an early stage, make it clear what Professor Goode has been asked to do in respect of self-regulation. Will his committee look at the wider aspect of the role of IMRO and at whether, under the new arrangements for his committee, the Occupational Pensions Board is adequate to cope with the increasing demands in that growing sector of financial institutions in the City?

Mr. John Gunnell (Morley and Leeds, South)

Does my hon. Friend accept that the IMRO regulations provide for directors of IMRO companies to supply a quarterly return, which they must sign, saying that they know of no failure under the regulations and nothing that could give rise to or constitute a complaint from any customer? As all the directors of IMRO companies, of which I am one, must sign such a document, and as it is filled in every quarter, is it not clear that all the directors of IMRO companies have been signing such documents apparently unaware of the theft from the funds? Does not that mean that self-regulation has failed dismally and that those company directors have been prepared to sign, knowingly or unknowingly? May I show a Christmas card that Robert Maxwell—

Madam Speaker

Order. Let me try to help the hon. Member for Morley and Leeds, South (Mr. Gunnell). An intervention must be precise, particularly at this time of the evening when we are waiting for the wind-up speeches.

Mr. Gunnell

My apologies, Madam Speaker, but I thought that the card was a precise example of hypocrisy on a major scale.

Mr. McCartney

My hon. Friend the Member for Morley and Leeds, South (Mr. Gunnell) had me there, and I shall keep a close eye on him in future debates. His suggestion to look at the Select Committee report and what it says about IMRO is valid.

I want a commitment from both the Labour and the Government Front-Bench teams that they will initiate, in Government time, a debate on the Social Security Committee's report and regulations and will set up a Select Committee before the summer recess.

9.41 pm

Ms. Marjorie Mowlam (Redcar)

I congratulate the two hon. Members who made excellent maiden speeches. The hon. Member for Hertfordshire, North (Mr. Heald) gave a clear and precise presentation that demonstrated his barrister background. Having listened to his maiden speech, I think that his experience of Speakers' corner will come in useful, as he will not be heard in as much silence as he was today. My hon. Friend the Member for Rossendale and Darwen (Ms. Anderson) gave a clear, fluent, committed speech. As many of us know, she has worked hard for many Members of Parliament and for the Labour party behind the scenes for many years. We are pleased to see her here in her own right; our party's loss is her constituents' gain.

In view of the time left, I shall briefly pick up on a number of issues raised, starting with one mentioned by the Secretary of State. He said that he was convinced that his proposals had been welcomed by a wide spectrum of opinion outside the House. Let us consider the response of some of the action groups to his comments.

The Maxwell pensioners action group said: It's a long way short of what we want, and we shall campaign on. The BIH pensioners action committee said: The £2.5 million was a little like a student loan ie. giving a little to people with nothing—hoping they would be repaid in the future. The MCC works plan said that it was A step up the ladder, a scratch on the surface. It is worried about the frequency with which the Secretary of State used the word "may". Therefore, to say that the proposals were greeted with overwhelming approval is a slight overstatement.

I wish to concentrate on the issue on which the Secretary of State laid stress: the special unit that he has set up in his Department, and the trust fund designed to encourage City institutions to contribute to the Maxwell pensioners' funds. He said a number of times, both yesterday and today, that the long-term problems could be solved only if assets were unfrozen and other contributions were made. He said that he was waiting to see how the institutions in the City of London reacted to their moral conscience.

I tried to help the Secretary of State this afternoon by phoning around as many financial institutions in the City as I could to find out where they stood on the issue. I am pleased to be able to help him with a number of comments from those institutions. The chairman of one of the clearing banks said: The failure in the system is the failure to control a government-regulated company—Bishopsgate. As far as we know—no stolen shares passed through our hands—we find the suggestion of a moral obligation to pay worrying. A way has to be found to recompense the pensioners, but for us, charity begins at home.

The chairman of another clearing bank said: We are squeaky clean on Maxwell". When asked about whether he would contribute to the Secretary of State's fund, the chairman said: That's going a bit far. I don't think my shareholders would appreciate that.

The National Association of Pension Funds, an organisation which represents many pension funds throughout the country, states that it has no money and does not believe that it should contribute. When asked whether it would advise pension fund members to contribute at its council meeting tomorrow, its representatives said that it did not consider that relevant. The Secretary of State must be aware that it would be ultra vires, in terms of the fiduciary principle, for many pension schemes to contribute to his pension fund.

The Secretary of State has not received a positive response from European and American banks that hold collateral linked to the Maxwell pensioners. When asked whether it would contribute, Shearson Lehman representatives said: We entered into transactions in good faith. We intend to pursue our own position in the courts. Most of the other banks were not willing to talk about conscience. Banque Nationale de Paris had no comment and Credit Suisse and Swiss Volksbank were unable under Swiss law to make any statement.

I spoke to people in Goldman Sachs and other banks in the United States. Those bankers consider themselves to be people of good will, but they do not consider a statement in support of the trust fund to be of any value. One of them said: I don't know what kind of show you are running over there. Every time the Government runs into a regulatory problem they come round the City with a begging bowl. We accept that the banks have a responsibility and we would like to see them contribute. How do the Government propose to bring alive the small conscience in the City institutions?

Mr. Lilley

rose—

Ms. Mowlam

The Secretary of State had a good session. There will be plenty of time to sum up and the right hon. Gentleman can confer with his colleague. I will not give way. The Minister can share his view with his colleague who can present it in winding up.

The hon. Members for Gordon (Mr. Bruce) and for Sevenoaks (Mr. Wolfson) spoke about the future of the City of London. If the European federal bank comes to London, will it have to worry about the begging bowl every time there is a problem? I agree with the hon. Member for Sevenoaks that we must consider that serious problem.

The Secretary of State generously acknowledged that the Select Committee and the all-party group had been crucial in helping him to reach his decision. It would have been helpful if he had said that the idea for this kind of fund had been circulating in the City for many weeks and openly discussed. As I am sure he knows from the report in yesterday's issue of The Independent, the National Westminster bank has been discussing for some time what it calls a men of good will fund—to which we shall not have to contribute—to help pensioners in great distress until the legal question about a call on shares is answered. The head of the bank's risk department has been exploring avenues for some time in trying to respond to the problem, and the National Westminster felt fairly aggrieved when the Secretary of State found out and decided to pre-empt the scheme.

The Secretary of State said several times that he wanted to put Maxwell pensioners' minds at rest and then made contradictory statements. When asked by the hon. Member for Leeds, North-West (Dr. Hampson) about retrospective payments for members of the Headington pension fund, the Secretary of State said that he would have to come back to the hon. Gentleman. But in answer to the hon. Member for Bedfordshire, South-West (Mr. Madel) the Secretary of State gave a 100 per cent. guarantee about all the pensioners in that scheme. That can be checked in tomorow's Hansard.

In response to my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson), who asked about AGB pensioners, the Secretary of State gave no guarantee and no straight answer. The right hon. Gentleman's statements have not created the peace of mind that he and the Opposition are eager to welcome. In many ways, he has done the opposite. As my hon. Friend the Member for Oldham, West (Mr. Meacher) made clear, we welcome the changes to section 58B of the Social Security Act 1990. As the Minister made clear, that will make the Maxwell pensioners unsecured creditors. We must be straight with the Maxwell pensioners and tell them that, as unsecured creditors, they will be similar to other trading partners and will receive very little, if any, money from the liquidation.

The Secretary of State was asked yesterday when he would introduce the social security changes and he said, "I shall do that at an early date." What did he mean? When he was Secretary of State for Trade and Industry he could have set up the inquiry into MGN, but we had to wait for the present Secretary of State to announce that inquiry. Understandably we have some doubt about the right hon. Gentleman's ability to act quickly on announcements.

One would have thought that the problem over the Maxwell pensioners would have stimulated the Government into responding to weaknesses in the regulatory regime. Many hon. Members have spoken about that. I hope that that issue, which relates to the Treasury, will he answered in the winding-up speech. The Government have said that they will not respond to the issue other than through the review of pension legislation. Hon. Members have spoken about IMRO, international controls and Liechtenstein. All those matters deserve an international response. Yesterday, the Chancellor of the Exchequer issued a press release on the Treasury taking over responsibility for the Financial Services Act 1986. It said that for the time being No changes are proposed in the way financial services are to be regulated. We have £270 million in Liechtenstein and it would be useful if that was returned. After the events at the Bank of Credit and Commerce International and following other procedures, it would be useful if the Government acknowledged that it would be helpful to have an international response. Perhaps the Minister will mention that today.

Similarly, there is a report on IMRO on the desk of the Secretary of State for Trade and Industry. The report states that in future IMRO should move to a one wholesale and one retail regulator. That report has been on his desk for some months, but there has been no response to the weaknesses at IMRO. I hope that the Minister will accept that that report suggests changes and that it is something to which the Government could respond. That would be better than the Chancellor's statement that no action is to be taken.

The position of the Maxwell pensioners is pitiable. Although we welcome the Government's response, it is insufficient and we are worried that in the months ahead the Maxwell pensioners will suffer as a result of the Government's weakness.

9.51 pm

The Economic Secretary to the Treasury (Mr. Anthony Nelson)

During this debate the House has spoken with one voice about the plight of the Maxwell pensioners. Nobody listening to the debate could go away unaware of the great sympathy that has been expressed by all hon. Members who have contributed and those who have tried to contribute. I hope that they will have other opportunities to express their views.

One aspect of the plight of Maxwell pensioners that has been given insufficient attention is the uncertainty involved. They are worried not just about the amount of money involved but about when and whether they will get it. For many elderly people of limited means and with an expected standard of life, that uncertainty keeps them awake at night and visits a particular sort of distress upon them. I am aware of that and it is the Government's awareness of that which led to the proposal that my right hon. Friend the Secretary of State made yesterday and again today. In the short time available, I shall do my best to acknowledge and respond to the many contributions that have been made.

I, too, congratulate my hon. Friend the Member for Hertfordshire, North (Mr. Heald) on an outstanding maiden speech in the great tradition of the House. He spoke with warmth about his predecessor, Sir Ian Stewart, whom we all remember with gratitude and admiration. He mentioned the plight of his AGB pensioner constituents and I took that on board. They will be among those whom it is intended will benefit from this package of measures. He made some interesting points about the remit of the review. He proposed that consideration should be given to a register of assets and that perhaps a compensation scheme was needed. He and other hon. Members rightly pointed out that 12 months is probably an adequate period given that the Government will come forward sooner if more immediate measures are needed. We must remember that we are dealing with an enormous number of beneficiaries of occupational pension schemes and it is important that we get it right.

When in the past the House has looked at the problems in pensions, insurance, investments and banking, time and again we have looked at the deficiencies of past legislation and the latest incidence of collapse. What we must try to do—it is more difficult—is look forward to the next problem that might arise. We should spend more time trying to secure the horses in their stable than locking the doors of those that have already bolted. As I have said, that is difficult, but it will take the time and attention of the review.

My hon. Friend the Member for Cheadle (Mr. Day) supported the amendment, for which I am grateful. He deplored the party-political stance of the hon. Member for Oldham, West (Mr. Meacher), who, I agree, introduced an unnecessary partisan approach.

The hon. Member for Gordon (Mr. Bruce) welcomed the review and asked, rightly, how funds could be diverted so badly. The review must consider that, and the banks and City institutions must contribute to the trust fund that has been set up.

The hon. Member for Gordon and others referred to the problem of British International Helicopters Limited scheme members. To date, all pensions have been paid in full and will be until the end of July. Money is available to pay after July, and the unit will discuss with trustees how to continue pensions in the short term.

I congratulate the hon. Member for Rossendale and Darwen (Ms. Anderson) on an outstanding maiden speech. She spoke warmly about our colleague, Sir David Trippier, whom we miss very much, but we welcome her to the House. I was impressed by her comments about textile workers, whom I know something about. She mentioned the problems and concern of her constituents who are affected by the Maxwell collapses and called for an assessment—this is an important point—of trust law and pension law. That was considered by the professor to whom she referred, but I did not draw the same conclusions from the report as her. She spelt out the case for a statutory compensation scheme.

My hon. Friends the Members for Dover (Mr. Shaw) and for Leeds, North-West (Dr. Hampson) spoke about Headington. It is intended that the package of £2.5 million will restore payments, including the May and June payments, about which my hon. Friend the Member for Leeds, West asked. The trustees must decide how to allocate resources, but he asked whether, in assessing the sum liable to be paid, they included an assessment for back payments of sums due. The answer is that we intend, as far as possible, that they should.

My hon. Friend the Member for Dover also spoke about the problems of getting assets out of Liechtenstein. I share his frustration, but there is a limited amount that one can do to make another sovereign state disgorge assets. However, there is a prospect that, under the Basle negotiations on international banking regulation, countries that do not subscribe to international standards of banking prudence may have authorisation withdrawn for subsidiaries or branches in particular countries, so some pressure could be brought to bear in that way. He asked for a tougher line to be taken, and I am sure that that will be noted.

The hon. Member for Newham, North-East (Mr. Leighton) asked whether the banks knew with whom they were dealing and referred to the 1971 Department of Trade and Industry report. Many of them must have known, although with the benefit of hindsight it is easy to be critical. He asked whether the Maxwells will be prosecuted. That is a matter for the Serious Fraud Office. The assets are a matter for the liquidators, who are investigating. He said that the Department of Trade and Industry should not have licensed LBI, but under the Prevention of Fraud (Investments) Act 1958 it was extremely difficult for it to be denied approval, even for those few days.

My hon. Friend the Member for Sevenoaks (Mr. Wolfson) welcomed the assurances that have been given, but said that if funds proved inadequate he and the House would be back for more. We hope that they will be adequate. I assure him that the manning of the unit will be adequate. We shall ensure that it is staffed with people who are thoroughly able to do the job. I noted what he said about pension funds and banks contributing to the-trust that has been set up.

The hon. Member for Makerfield (Mr. McCartney) referred to the report of the Select Committee on Social Security. I pay tribute to its work. Its central recommendation was that there should be a review, and that recommendation has been accepted in full. I believe that there were about 60 recommendations, six of which were implemented immediately. It is the Government's intention to respond formally to the Select Committee by the end of this month. The hon. Gentleman criticised IMRO and asked whether it was competent, but that is a matter for SIB.

Finally, the hon. Member for Redcar (Ms. Mowlam) did not get much change out of the City, which is hardly surprising—it is hardly likely to say to her, "What a good idea. I'll certainly put £5 million into the kitty." These issues are very sensitive. [Interruption.] Well, it is not going to say that. I predict that we shall have a much better success rate.

Mr. Derek Foster (Bishop Auckland)

rose in his place, and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 262, Noes 315.

Division No. 26]	[10 pm
AYES
Abbott, Ms Diane	Enright, Derek
Adams, Mrs Irene	Etherington, William
Ainger, Nicholas	Evans, John (St Helens N)
Ainsworth, Robert (Cov'try NE)	Ewing, Mrs Margaret
Allen, Graham	Fatchett, Derek
Alton, David	Faulds, Andrew
Anderson, Ms Janet (Ros'dale)	Field, Frank (Birkenhead)
Armstrong, Hilary	Fisher, Mark
Ashton, Joe	Flynn, Paul
Austin-Walker, John	Foster, Derek (B'p Auckland)
Barnes, Harry	Foster, Donald (Bath)
Battle, John	Foulkes, George
Bayley, Hugh	Fraser, John
Beckett, Margaret	Fyfe, Maria
Bell, Stuart	Galbraith, Sam
Bennett, Andrew F.	Galloway, George
Benton, Joe	Gapes, Michael
Bermingham, Gerald	George, Bruce
Berry, Roger	Gerrard, Neil
Betts, Clive	Gilbert Rt Hon Dr John
Blair, Tony	Godman, Dr Norman A.
Blunkett, David	Godsiff, Roger
Boateng, Paul	Gordon, Mildred
Boyce, Jimmy	Graham, Thomas
Boyes, Roland	Grant, Bernie (Tottenham)
Bradley, Keith	Griffiths, Win (Bridgend)
Bray, Dr Jeremy	Grocott, Bruce
Brown, Gordon (Dunfermline E)	Gunnell, John
Brown, N. (N'c'tle upon Tyne E)	Hain, Peter
Bruce, Malcolm (Gordon)	Hall, Mike
Burden, Richard	Hanson, David
Byers, Stephen	Hardy, Peter
Caborn, Richard	Harman, Ms Harriet
Callaghan, Jim	Harvey, Nick
Campbell, Ms Anne (C'bridge)	Hattersley, Rt Hon Roy
Campbell, Menzies (Fife NE)	Heppell, John
Campbell, Ronald (Blyth V)	Hill, Keith (Streatham)
Campbell-Savours, D. N.	Hinchliffe, David
Canavan, Dennis	Hoey, Kate
Cann, James	Hogg, Norman (Cumbernauld)
Carlile, Alexander (Montgomry)	Home Robertson, John
Chisholm, Malcolm	Hood, Jimmy
Clapham, Michael	Hoon, Geoff
Clark, Dr David (South Shields)	Hoyle, Doug
Clarke, Eric (Midlothian)	Hughes, Kevin (Doncaster N)
Clarke, Tom (Monklands W)	Hughes, Robert (Aberdeen N)
Clelland, David	Hughes, Roy (Newport E)
Coffey, Ms Ann	Hughes, Simon (Southwark)
Cohen, Harry	Hutton, John
Connarty, Michael	Illsley, Eric
Cook, Frank (Stockton N)	Ingram, Adam
Cook, Robin (Livingston)	Jackson, Ms Glenda (H'stead)
Corbyn, Jeremy	Jackson, Ms Helen (Shef'ld, H)
Corston, Ms Jean	Jamieson, David
Cousins, Jim	Janner, Greville
Cox, Tom	Johnston, Sir Russell
Cryer, Bob	Jones, Barry (Alyn and D'side)
Cummings, John	Jones, Ieuan (Ynys Môn)
Cunliffe, Lawrence	Jones, Jon Owen (Cardiff C)
Cunningham, Jim (Covy SE)	Jones, Ms Lynne (B'ham S O)
Cunningham, Dr John (C'p'l'nd)	Jones, Martyn (Clwyd, SW)
Dafis, Cynog	Jones, Nigel (Cheltenham)
Dalyell, Tam	Jowell, Ms Tessa
Darling, Alistair	Kaufman, Rt Hon Gerald
Davies, Bryan (Oldham C'tral)	Keen, Alan
Davies, Rt Hon Denzil (Llanelli)	Kennedy, Charles (Ross, C & S)
Davies, Ron (Caerphilly)	Kennedy, Ms Jane (L'p'l Br'g'n)
Davis, Terry (B'ham, H'dge H'l)	Khabra, Piara
Denham, John	Kilfoyle, Peter
Dewar, Donald	Kirkwood, Archy
Dixon, Don	Leighton, Ron
Dobson, Frank	Lestor, Joan (Eccles)
Donohoe, Brian	Lewis, Terry
Dowd, Jim	Litherland, Robert
Dunnachie, Jimmy	Livingstone, Ken
Dunwoody, Mrs Gwyneth	Lloyd, Tony (Stretford)
Eagle, Ms Angela	Loyden, Eddie

Lynne, Ms Liz	Redmond, Martin
McAvoy, Thomas	Reid, Dr John
McCartney, Ian	Richardson, Jo
McFall, John	Robertson, George (Hamilton)
McKelvey, William	Robinson, Geoffrey (Co'try NW)
Mackinlay, Andrew	Roche, Ms Barbara
McLeish, Henry	Rogers, Allan
McMaster, Gordon	Rooker, Jeff
McNamara, Kevin	Rooney, Terry
McWilliam, John	Ross, Ernie (Dundee W)
Madden, Max	Rowlands, Ted
Mahon, Alice	Ruddock, Joan
Mandelson, Peter	Sedgemore, Brian
Marek, Dr John	Sheerman, Barry
Marshall, David (Shettleston)	Sheldon, Rt Hon Robert
Marshall, Jim (Leicester, S)	Shore, Rt Hon Peter
Martin, Michael J. (Springburn)	Short, Clare
Martlew, Eric	Simpson, Alan
Maxton, John	Skinner, Dennis
Meacher, Michael	Smith, Andrew (Oxford E)
Meale, Alan	Smith, C. (Isl'ton S & F'sbury)
Michael, Alun	Smith, Rt Hon John (M'kl'ds E)
Michie, Bill (Sheffield Heeley)	Smith, Llew (Blaenau Gwent)
Michie, Mrs Ray (Argyll Bute)	Snape, Peter
Milburn, Alan	Spearing, Nigel
Miller, Andrew	Squire, Rachel (Dunfermline W)
Moonie, Dr Lewis	Steel, Rt Hon Sir David
Morgan, Rhodri	Steinberg, Gerry
Morley, Elliot	Stevenson, George
Morris, Rt Hon A. (Wy'nshawe)	Stott, Roger
Morris, Estelle (B'ham Yardley)	Strang, Gavin
Morris, Rt Hon J. (Aberavon)	Taylor, Mrs Ann (Dewsbury)
Mowlam, Marjorie	Taylor, Matthew (Truro)
Mudie, George	Thompson, Jack (Wansbeck)
Mullin, Chris	Tipping, Paddy
Murphy, Paul	Turner, Dennis
Oakes, Rt Hon Gordon	Tyler, Paul
O'Brien, Michael (N W'kshire)	Vaz, Keith
O'Brien, William (Normanton)	Wallace, James
O'Hara, Edward	Walley, Joan
Olner, William	Wardell, Gareth (Gower)
O'Neill, Martin	Wareing, Robert N
Parry, Robert	Watson, Mike
Patchett, Terry	Wicks, Malcolm
Pendry, Tom	Wigley, Dafydd
Pickthall, Colin	Williams, Rt Hon Alan (Sw'n W)
Pike, Peter L.	Williams, Alan W (Carmarthen)
Pope, Greg	Wilson, Brian
Powell, Ray (Ogmore)	Winnick, David
Prentice, Ms Bridget (Lew'm E)	Wise, Audrey
Prentice, Gordon (Pendle)	Worthington, Tony
Primarolo, Dawn	Wright, Tony
Purchase, Ken
Quin, Ms Joyce	Tellers for the Ayes:
Randall, Stuart	Mrs. Llin Golding and
Raynsford, Nick	Mr. Ken Eastham.

NOES
Adley, Robert	Beggs, Roy
Ainsworth, Peter (East Surrey)	Bellingham, Henry
Aitken, Jonathan	Bendall, Vivian
Alexander, Richard	Beresford, Sir Paul
Alison, Rt Hon Michael (Selby)	Biffen, Rt Hon John
Allason, Rupert (Torbay)	Blackburn, Dr John G.
Amess, David	Body, Sir Richard
Ancram, Michael	Bonsor, Sir Nicholas
Arbuthnot, James	Booth, Hartley
Arnold, Jacques (Gravesham)	Boswell, Tim
Arnold, Sir Thomas (Hazel Grv)	Bottomley, Peter (Eltham)
Ashby, David	Bottomley, Rt Hon Virginia
Aspinwall, Jack	Bowden, Andrew
Atkins, Robert	Bowis, John
Atkinson, David (Bour'mouth E)	Boyson, Rt Hon Sir Rhodes
Atkinson, Peter (Hexham)	Brandreth, Gyles
Baker, Nicholas (Dorset North)	Brazier, Julian
Baldry, Tony	Bright, Graham
Banks, Matthew (Southport)	Brooke, Rt Hon Peter
Banks, Robert (Harrogate)	Brown, M. (Brigg & Cl'thorpes)
Bates, Michael	Browning, Mrs. Angela
Batiste, Spencer	Bruce, Ian (S Dorset)

Burns, Simon	Hague, William
Burt, Alistair	Hamilton, Rt Hon Archie
Butcher, John	Hamilton, Neil (Tatton)
Butler, Peter	Hampson, Dr Keith
Butterfill, John	Hannam, Sir John
Carlisle, John (Luton North)	Hargreaves, Andrew
Carlisle, Kenneth (Lincoln)	Harris, David
Carrington, Matthew	Haselhurst, Alan
Carttiss, Michael	Hawkins, Nicholas
Cash, William	Hawksley, Warren
Channon, Rt Hon Paul	Hayes, Jerry
Chaplin, Mrs Judith	Heald, Oliver
Churchill, Mr	Heath, Rt Hon Sir Edward
Clappison, James	Heathcoat-Amory, David
Clark, Dr Michael (Rochford)	Hendry, Charles
Clarke, Rt Hon Kenneth (Ruclif)	Heseltine, Rt Hon Michael
Clifton-Brown, Geoffrey	Hicks, Robert
Coe, Sebastian	Hill, James (Southampton Test)
Colvin, Michael	Hogg, Rt Hon Douglas (G'tham)
Congdon, David	Horam, John
Conway, Derek	Hordern, Sir Peter
Coombs, Anthony (Wyre For'st)	Howarth, Alan (Strat'rd-on-A)
Coombs, Simon (Swindon)	Howell, Rt Hon David (G'dford)
Cope, Rt Hon Sir John	Howell, Ralph (North Norfolk)
Cormack, Patrick	Hughes Robert G. (Harrow W)
Couchman, James	Hunt, Rt Hon David (Wirral W)
Cran, James	Hunt, Sir John (Ravensbourne)
Currie, Mrs Edwina (S D'by'ire)	Hunter, Andrew
Davies, Quentin (Stamford)	Jackson, Robert (Wantage)
Davis, David (Boothferry)	Jenkin, Bernard
Day, Stephen	Jessel, Toby
Deva, Nirj Joseph	Johnson Smith, Sir Geoffrey
Devlin, Tim	Jones, Gwilym (Cardiff N)
Dickens, Geoffrey	Jones, Robert B. (W H'f'rdshire)
Dicks, Terry	Jopling, Rt Hon Michael
Dorrell, Stephen	Kellett-Bowman, Dame Elaine
Douglas-Hamilton, Lord James	Key, Robert
Dover, Den	Kilfedder, James
Duncan, Alan	King, Rt Hon Tom
Duncan-Smith, Iain	Kirkhope, Timothy
Dunn, Bob	Knapman, Roger
Durant, Sir Anthony	Knight, Mrs Angela (Erewash)
Dykes, Hugh	Knight, Greg (Derby N)
Eggar, Tim	Knight, Dame Jill (Bir'm E'st'n)
Elletson, Harold	Knox, David
Emery, Sir Peter	Kynoch, George (Kincardine)
Evans, David (Welwyn Hatfield)	Lait, Mrs Jacqui
Evans, Jonathan (Brecon)	Lang, Rt Hon Ian
Evans, Nigel (Ribble Valley)	Lawrence, Ivan
Evans, Roger (Monmouth)	Legg, Barry
Evennett, David	Leigh, Edward
Faber, David	Lennox-Boyd, Hon Mark
Fabricant, Michael	Lester, Jim (Broxtowe)
Fairbairn, Sir Nicholas	Lidington, David
Field, Barry (Isle of Wight)	Lilley, Rt Hon Peter
Fishburn, John Dudley	Lloyd, Peter (Fareham)
Forman, Nigel	Lord, Michael
Forsyth, Michael (Stirling)	Luff, Peter
Forth, Eric	MacGregor, Rt Hon John
Fowler, Rt Hon Sir Norman	MacKay, Andrew
Fox, Dr Liam (Woodspring)	McLoughlin, Patrick
Fox, Sir Marcus (Shipley)	McNair-Wilson, Sir Patrick
Freeman, Roger	Madel, David
French, Douglas	Maitland, Lady Olga
Fry, Peter	Malone, Gerald
Gallie, Phil	Mans, Keith
Gardiner, Sir George	Marland, Paul
Garnier, Edward	Marlow, Tony
Gill, Christopher	Marshall, John (Hendon S)
Gillan, Ms Cheryl	Marshall, Sir Michael (Arundel)
Goodlad, Rt Hon Alastair	Martin, David (Portsmouth S)
Goodson-Wickes, Dr Charles	Mates, Michael
Gorman, Mrs Teresa	Mawhinney, Dr Brian
Gorst, John	Mellor, Rt Hon David
Grant, Sir Anthony (Cambs SW)	Merchant, Piers
Greenway, Harry (Ealing N)	Milligan, Stephen
Greenway, John (Ryedale)	Mills, Iain
Griffiths, Peter (Portsmouth, N)	Mitchell, Andrew (Gedling)
Grylls, Sir Michael	Moate, Roger
Gummer, Rt Hon John Selwyn	Molyneaux, Rt Hon James

Montgomery, Sir Fergus	Spink, Dr Robert
Moss, Malcolm	Spring, Richard
Needham, Richard	Sproat, Iain
Nelson, Anthony	Squire, Robin (Hornchurch)
Neubert, Sir Michael	Stanley, Rt Hon Sir John
Newton, Rt Hon Tony	Stephen, Michael
Nicholls, Patrick	Stern, Michael
Nicholson, David (Taunton)	Stewart, Allan
Nicholson, Emma (Devon West)	Streeter, Gary
Norris, Steve	Sumberg, David
Onslow, Rt Hon Cranley	Sweeney, Walter
Oppenheim, Phillip	Sykes, John
Ottaway, Richard	Tapsell, Sir Peter
Page, Richard	Taylor, Ian (Esher)
Paice, James	Taylor, Rt Hon D. (Strangford)
Patnick, Irvine	Taylor, John M. (Solihull)
Patten, Rt Hon John	Taylor, Sir Teddy (Southend, E)
Pattie, Rt Hon Sir Geoffrey	Temple-Morris, Peter
Pawsey, James	Thomason, Roy
Peacock, Mrs Elizabeth	Thompson, Sir Donald (C'er V)
Pickles, Eric	Thompson, Patrick (Norwich N)
Porter, Barry (Wirral S)	Thornton, Malcolm
Porter, David (Waveney)	Thurnham, Peter
Portillo, Rt Hon Michael	Townsend, Cyril D. (Bexl'yh'th)
Powell, William (Corby)	Tracey, Richard
Rathbone, Tim	Tredinnick, David
Redwood, John	Trend, Michael
Renton, Rt Hon Tim	Trimble, David
Richards, Rod	Trotter, Neville
Riddick, Graham	Twinn, Dr Ian
Rifkind, Rt Hon. Malcolm	Vaughan, Sir Gerard
Robathan, Andrew	Waldegrave, Rt Hon William
Roberts, Rt Hon Sir Wyn	Walden, George
Robertson, Raymond (Ab'd'n S)	Walker, Bill (N Tayside)
Robinson, Mark (Somerton)	Waller, Gary
Roe, Mrs Marion (Broxbourne)	Ward, John
Ross, William (E Londonderry)	Wardle, Charles (Bexhill)
Rowe, Andrew (Mid Kent)	Waterson, Nigel
Rumbold, Rt Hon Dame Angela	Watts, John
Ryder, Rt Hon Richard	Wells, Bowen
Sackville, Tom	Wheeler, Sir John
Sainsbury, Rt Hon Tim	Whittingdale, John
Scott, Rt Hon Nicholas	Widdecombe, Ann
Shaw, David (Dover)	Wiggin, Jerry
Shaw, Sir Giles (Pudsey)	Wilkinson, John
Shephard, Rt Hon Gillian	Willetts, David
Shepherd, Colin (Hereford)	Wilshire, David
Shepherd, Richard (Aldridge)	Winterton, Mrs Ann (Congleton)
Shersby, Michael	Winterton, Nicholas (Macc'f'ld)
Sims, Roger	Wolfson, Mark
Skeet, Sir Trevor	Wood, Timothy
Smith, Sir Dudley (Warwick)	Yeo, Tim
Smith, Tim (Beaconsfield)	Young, Sir George (Acton)
Soames, Nicholas
Speed, Keith	Tellers for the Noes:
Spencer, Sir Derek	Mr. David Lightbown and
Spicer, Sir James (W Dorset)	Mr. Sydney Chapman.
Spicer, Michael (S Worcs)

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.

MADAM SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved, That this House shares a deep concern for the distress pensioners face as a result of the pillaging of pension funds by Robert Maxwell; applauds the initiative taken by the Government to provide temporary, emergency funding to help those schemes which have a particularly acute short term problem; and, while welcoming the decision to initiate a thorough review of the framework of pension scheme law, notes with approval the important part that occupational pensions continue to play in ensuring increasing prosperity among the retired population of this country.

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