HC Deb 03 November 1993 vol 231 cc356-67 4.18 pm
The Secretary of State for Social Security (Mr. Peter Lilley)

With permission, Madam Speaker, I would like to make a statement on the report of the Pension Law Review Committee.

Following the Maxwell pension scandal, I was determined to restore confidence in the security of pension schemes, so, in June last year, I set up the committee under Professor Goode to review the framework of law and regulation governing occupational pension schemes. The committee presented its report at the end of September. I decided to publish it immediately. It is immensely thorough, comprehensive, lucid and long. I have no doubt it will become the seminal work in the development of pension law for well into the next century. I want to place on record my gratitude to Professor Goode and every member of his committee.

The Government, like most of those involved in the pension business, are still considering the report in detail. Rather than wait until we have completed our deliberation, I thought it would be helpful to the House to make an early statement—to allow right hon. and hon. Members to express their immediate views on the issues raised by the report; to announce how we will handle the consideration of the report; and to indicate our preliminary overall response to it.

The report aims to modernise and improve the framework of law affecting occupational pension funds and to bring about a fair balance between the interests of scheme members, pensioners and employers. The Government entirely share these aims.

A fundamental question for the committee was whether trust law remained an appropriate basis for pension law or should be replaced by some form of corporate law. The committee concluded that trust law remains the best available framework for occupational pension schemes. The Government agree with this conclusion.

The committee was determined to fulfil its objective of ensuring greater security for occupational pensions without imposing burdens that would undermine the willingness of responsible employers to run pension schemes. Indeed, it has even suggested ways of simplifying some existing requirements. I welcome this approach.

Altogether the committee made 218 recommendations. I shall be seeking views on those recommendations and on other issues raised by the committee. I shall shortly issue some discussion papers as a basis for detailed exchanges with interested parties. There are five key areas on which we are particularly interested to seek views.

The first is solvency. The committee proposed that a statutory minimum solvency requirement, with certain specific exceptions, be applied to funded pension schemes. The proposal has already raised some questions about how solvency would be measured; how frequently a deficiency might occur, and how rapidly a deficiency could be restored. But it is clearly important to ensure that schemes are properly funded.

The second is surpluses. I deliberately drew up the committee's terms of reference wide enough to enable it to consider this issue. The committee concluded that sweeping changes in the law governing surplus are not needed. But it proposed some additional restrictions on payments to the employer and made other recommendations relating to surpluses.

The third is the management of schemes. The committee proposed a range of measures designed to improve the way in which schemes are managed and to enhance security of members' benefits. They include the appointment of member trustees; giving members more sharply focused information; and strengthening the role of professional advisers. Many schemes already involve their members and provide clear information to them. I want to encourage that and shall be considering whether we need to set minimum standards in this area for all schemes.

The fourth is compensation. The committee recommended a compensation scheme, funded by a post-event levy on pension schemes. The intention is to protect members and pensioners in the event of fraud, theft or the intentional misappropriation of assets. I recognise the case for some form of compensation scheme, as a long stop, behind a strengthened legal and regulatory framework. We shall be exploring the implications of this proposal too.

The fifth is regulation. The Government accept that the present arrangements for regulating pension funds need reform. The committee made a case for a quite new regulatory mechanism, with significantly wider powers than those currently held by the Occupational Pensions Board. I want to listen carefully to any comments on the detail of the committee's recommendations, not least to ensure that the burden on business is the minimum compatible with effective regulation.

The committee drew attention to a number of issues without making specific recommendations. In particular, it highlighted the complexity of the current arrangements for occupational schemes to contract out of the state earnings-related pension scheme.

It pointed out that many commentators had criticised those complexities, although it also noted that changes would not be straightforward. I shall want to discuss that issue with interested parties.

I and my colleagues in government shall give further consideration to the whole body of recommendations in the report in the light of the debate which Professor Goode has initiated and which our discussion papers will carry forward.

While we consider the committee's proposals, we must also press on with considering the implications for occupational pension schemes of judgments in the European Court of Justice. The court recently ruled, in the Ten Oever case, that the requirement of equal treatment applies only in respect of pensionable service since May 1990—the date of the Barber ruling. That judgment is excellent news. It confirms our interpretation of the court's ruling in the Barber case. Full retrospection would have cost British industry up to £50 billion to fund unforeseen liabilities.

We expect rulings on a number of related cases, notably the Coloroll case, for which the Government have provided financial support. In the meantime, I have asked my officials to begin discussion with interested parties some of the issues arising from the latest ruling, and from the Advocate General's opinion on Coloroll. We have recently issued a short, technical paper to inform those discussions.

Earlier last month I published the report by the working group on the alignment of tax and national insurance contributions. I set up the working group in May as part of our campaign to reduce the burdens on business. The issues raised by the group's report have a bearing on our discussions with employers about the contracting out arrangements that I have mentioned. The report sets out a number of recommendations and some challenging options for aligning the two systems. Some of them would have significant implications for the benefit system and would require further consideration within Government.

I am attracted to the proposals for aligning the definition of earnings. I intend to consult the business community, and others concerned, next year about how that might be done.

Our policies to encourage private pension provision have been outstandingly successful. United Kingdom pension schemes own more than half of all pension fund assets in the European Community. We are determined to build on our success and to reinforce confidence in the security of occupational pension schemes. We aim to create a framework for occupational pensions that is secure, stable and fair, and to encourage people to make provision for their retirement.

The report of the Pension Law Review Committee provides a firm foundation for the debate that must take place before decisions are made.

Mr. Donald Dewar (Glasgow, Garscadden)

I welcome the report, and I also wish to congratulate Professor Goode and his colleagues. Theirs is a formidable achievement. They have reduced a massive tangle of representations—I think that there were 1,669 submissions—to coherent order. The committee's work is, as I think everyone in the House recognises, vital, because confidence has been severely shaken by the Maxwell scandal. A new regulatory framework is essential. There must be adequate safeguards. Everything sensible and possible must be done to prevent another Maxwell-style disaster.

Much of the committee's work is self-evidently useful, but did the Minister note the comment in a leader in the Financial Times that the report is far from a radical document"? Is he perhaps surprised that those doubts are widely reflected, certainly in the press? I notice, for example, that The Sunday Times headline was: Goode falls short of a revolution. That in The Independent on Sunday was: Error on the side of caution and that in The Guardian was: Goode is not good enough.

Mr. Iain Duncan Smith (Chingford)

What does the hon. Gentleman think?

Mr. Dewar

I will come to that in just a minute if the hon. Gentleman will be patient.

Does the Minister accept that the report should be seen as a starting point, and not necessarily as a finished article?

At the heart of any discussions of pensions are the questions of ownership, the control of funds and choice for the employee. The report—it is a matter for future debate —does little to recognise the important principle that was laid down in the Barber judgment, that pensions are a form of deferred pay. Many are, and will be, disappointed that there has not been a fundamental shift of control in favour of scheme members. I welcome, however, the recommendations on a regulator. There is a strong case for that office, publicly funded and with the power to supervise and, where necessary, impose discipline. Recent history has underlined the shortcomings of self-regulatory organisations.

We also support the principle of a compensation scheme. I recognise why the Committee felt that it must be limited to fraud, theft or other misappropriation", but does the Minister accept that there will be further argument, particularly about the definition of those terms and the circumstances in which the compensation scheme will be brought into play? Was I right to understand from the Minister's statement that he clearly backs the principle and will move on it? I ask him that because the reference to a long-stop arrangement was somewhat grudging in tone, and it would be helpful if he would clear that up.

Does the Secretary of State recognise that the Maxwell pensioners, still living with uncertainty and fear, will regard the safeguards being built into the system as a frustrating case of locking the stable door after the horse has bolted? The House will expect the Government to do everything possible to speed the recovery of the missing assets and cut a pathway through the complex litigation still taking place, which, to a layman, looks positively Dickensian.

The fears about the security of pension funds and the need for safeguards, sometimes in unexpected quarters, have been underlined recently by the Government's shabby conduct over the British Rail pension fund and the fears expressed by the chairman of the trustees of that fund about how the Secretary of State for Transport has conducted his business.

I give notice that, while welcoming the improvements, we shall want to look closely at many controversial areas. The treatment of surpluses and unilateral contribution holidays, and the protection of members' interests from arbitrary changes in the rules of the schemes, are important matters. Although the proposal that any payment to the employer from scheme funds will require the regulator's consent is welcome, we doubt whether it is enough in itself. Is there not a case for the Minister and the House looking beyond Goode, whose timid conclusion was that sweeping changes in the law governing surpluses are not needed"? Unlike the Minister, I quote that without great satisfaction.

We also want to look at the minimum solvency requirement. I recognise that there are many important arguments about definition and implementation and it is important that we get it right. However, I hope that the Minister agrees that it is an important discipline and should be considered seriously.

Does the Minister recognise the disappointment over the proposal that, in final salary schemes, only one third of the trustees will be appointed by active members? Although those recommendations represent a significant improvement on the present position, does he agree that they may be inadequate? Does that recommendation reach the standard of best practice which Goode said would be his guiding light?

May I ask a minor but interesting question? Has the Secretary of State looked at recommendation 80, which deals with the transfer of undertaking regulations? Will he take the advice of Professor Goode and his colleagues and support a test case in the European Court of Justice to establish how the regulations may affect pensions?

I was interested in what the Minister said—it was slightly unexpected but none the less welcome—about the Advocate General's opinion in the Coloroll case, the implications of the Barber judgment, and the recent Ten Oever judgment. If the Minister now accepts—I gather that he does, rightly—that the decision is to rule out retrospection, which will save up to £50 billion, will he turn his mind to the introduction of limited price indexing, for which statutory authority already exists?

All hon. Members, irrespective of party, recognise that a long retirement on an un-indexed pension often ends in pain and distress. There is now a strong case for implementing paragraph 3 of schedule 2 to the Social Security Act 1990, and I hope that the Secretary of State can assure us that that will be on the agenda.

Finally, does the Minister accept the importance of maintaining momentum and pushing on to legislation at the earliest opportunity—certainly in the 1994–95 Session? I think that that is Government policy, but it would be helpful if he would underline and nail that down for the House's benefit today. Although adequate consultation must take place, will the Minister assure us that it will not delay progress or mask the urgent need for reform that is sufficiently radical to allow those who rely on occupational pensions to look forward to the future with confidence?

Mr. Lilley

I am grateful to the hon. Member for Glasgow, Garscadden (Mr. Dewar) for welcoming the report and paying tribute to the committee. I agree that the report should be seen as a starting point for further debate; I think that Professor Goode would also accept that it is not a finished product that can be accepted without further detailed consideration.

The hon. Gentleman said that the report was far from radical. My criterion in judging it is not its degree of radicalness, but the degree of effectiveness with which it can achieve the objective on which we are all agreed—greater security for pension funds. That is the criterion that we will use in evaluating all the different proposals.

The hon. Gentleman also said that control should be shifted to pension fund members. The report contains recommendations to that effect, and we shall of course consider them; but I understand that the hon. Gentleman would like us to go further. He welcomes the committee's regulatory proposals. We shall examine them closely: we recognise the need for reform. We also accept that there is a case for compensation. I described it as a long stop because I believe that prevention is better than cure, and I envisage any compensatory procedures performing that role.

The British Rail pension fund issue was dealt with satisfactorily yesterday by my right hon. Friend the Secretary of State for Transport, who made it clear that the pensioners would suffer no reduction in their rights, that the taxpayer would guarantee their price-indexed pensions and that they would be able to share in any distributable surplus in the future.

We shall, of course, look further—as the hon. Member for Garscadden implied that he would do—at pension fund holidays, and the other issues that he listed. We would particularly welcome the views of experts on the issue of solvency. We will certainly give serious consideration to the proposals of Professor Goode and the committee.

As for the timing of legislation, we consider it right to proceed with due speed, but thoroughly. We therefore want to consult, which will make legislation impossible this year —as the hon. Member for Garscadden implicitly recognised. The earliest possible date would be in the next parliamentary year, 1994–95; but, as the hon. Gentleman knows, I can give no commitments until we know what other pressure for places is produced by the Queen's Speech.

I am grateful for the hon. Gentleman's overall welcome for the proposals.

Mr. David Shaw (Dover)

Will my right hon. Friend confirm that, had many of the regulatory proposals in the report been in place when Robert Maxwell was in charge of his pension funds, the problems that he caused could have been prevented? When carefully examining all Professor Goode's proposals, will my right hon. Friend consider a key issue that coud make him very popular with millions of women and men? I refer to the problem of early leavers and the surpluses that remain in pension funds.

Many employers are taking pension holidays as a result of surpluses created not by successful investment, but by those who have left pension funds early and are not receiving increases at the appropriate rate. Will my right hon. Friend consider carefully the arrangements operating in Sweden and Germany, where early leavers are treated better? In that respect, the Goode report perhaps does not go far enough.

Overall, however, we all welcome my right hon. Friend's decision to ask Professor Goode to carry out the inquiry which has produced such an excellent report.

Mr. Lilley

I am grateful to my hon. Friend for his welcome to the report.

When the report was published, Professor Goode was asked whether the measures that he proposed would have stopped the Maxwell fund scandal, and he said that he believed that it had probably created difficulties, hurdles and obstacles sufficient to have prevented that. However, he recognised—as we all have to recognise—that we can never be 100 per cent. certain of stopping crime. We have to ensure that there are enough early indicators, under a proper framework of regulation, to prevent, wherever possible, such offences from occurring. That will be the criterion that we will use to evaluate the proposals.

Mr. Don Foster (Bath)

I also welcome Professor Goode's report. Like the hon. Member for Glasgow, Garscadden (Mr. Dewar), I welcome the somewhat reluctant recognition by the Secretary of State of the need for some form of compensation scheme. Does the Secretary of State now acknowledge that the Government were wrong to exclude occupational pensions from the compensation arrangements under the Financial Services Act 1986, and the urgency of the need to right that wrong?

Does the Secretary of State further acknowledge that his statement will do nothing to provide additional comfort to Maxwell pensioners? Will he not take the opportunity to give that comfort to those pensioners by agreeing to underwrite the pensions of all those who have suffered at Maxwell's hands?

Mr. Lilley

I am delighted that the report has all-party support. As a basis for further consideration, that is very welcome.

The hon. Gentleman suggested that I was reluctant to consider a compensation scheme. I repeat that the priority must be prevention. It is right that we should have a compensation scheme as a long stop, but it must be offered only in the last resort.

As for Maxwell pensioners, the report makes it clear that it is not envisaged that any compensation scheme should be made retrospective. The Government believe that the right way to help Maxwell pensioners is to assist the trustees of the Maxwell pension funds to secure a return of assets. That would ensure that those funds can continue to pay pensioners their pensions, as we have enabled them to do so far.

We have supported Sir Peter Webster in his efforts to achieve a global settlement of all outstanding issues, which will be warmly welcomed by all pensioners. His efforts would not be helped if we were to introduce a retrospective compensation fund.

Mr. Oliver Heald (Hertfordshire, North)

Does my right hon. Friend agree that Maxwell pensioners, including those in my constituency, will welcome the Goode report as a basis for protection in the future? Does he further agree that revolution often leads to legal uncertainty, and that often the best approach, as recommended in the Goode report, is to build on existing trust laws and establish a structured statutory framework of rights and duties? That would lead to less bureaucracy, more effective regulation and more certainty than the opposite approach of revolutionary change and a wide-ranging corporate law approach.

Mr. Lilley

I know that my hon. Friend is concerned about the position of Maxwell pensioners in his own constituency, and he is right about both the attitude of those pensioners towards the Goode report and the lack of necessity to adopt a revolutionary approach for its own sake. We have to make sure that in future we have an effective system, which will prevent such events from recurring and make members of funds secure in the knowledge that their assets will be there to pay their pensions for decades to come. That is what we seek to achieve.

Mr. Stanley Orme (Salford, East)

The Secretary of State is aware that some of the best occupational schemes in Britain have very large employee representation—for example, ICI currently has a 50 per cent. employee representation. What is wrong with that? Why does he not support it?

Mr. Lilley

I have not taken a firm view on the recommendations in the Goode report about member trustees and employee representation. We will consider the proposals put forward and the responses that they elicit. I know that many good schemes have 50 per cent. Or more member trustees, but so did the Maxwell funds. That alone does not guarantee the security of the funds, but it is not a reason for not considering it. We will consider the appropriate level of representation and the circumstances in which it should take place. I want to be sure about whether we need a statutory obligation to ensure some level of best practice. That is one of the issues on which I would like people's views.

Mr. Nicholas Winterton (Macclesfield)

I warmly welcome my right hon. Friend's positive and informative statement. There are not many hon. Members who do not have Maxwell pensioners and Mirror Group Newspapers pensioners in their constituencies. Does my right hon. Friend accept that there is some concern that legislation to deal with companies prepared to pillage their pension funds to bolster cash flow, or for other purposes, will not be introduced for more than 12 months? Is it not possible to introduce some interim legislation to prevent pensioners from having their pensions placed in great jeopardy, as occurred with the Mirror Group Newspapers or Dunn and Company pension funds?

Mr. Lilley

I am grateful for my hon. Friend's welcome for the report. I have considered whether we should move ahead speedily with interim legislation. I said to Professor Goode that, if in the course of his work he felt that he could make proposals to ensure greater security, which could be legislated on in advance of the final report, on an interim basis, I would respond positively to them. He did not think that that was the right approach, or that he could disentangle some aspects of his recommendations from others.

We have to ensure that what we do makes the system better and safer, and that we do not provide new opportunities and anomalies for some rogue to exploit, which might happen if we introduced ill-thought-out and hasty legislation.

As a result of the Maxwell fund scandal, everyone in the pension fund world is currently on red alert, and we have greater security within the existing framework than ever before. I want to put in place arrangements that will ensure that, when the Maxwell memory has dimmed with time, we will still have a safe system which will give early warning of any wrongdoing or areas which may need investigation.

Mr. Frank Field (Birkenhead)

May I add my thanks to Professor Goode and the Committee for their report? Is the Secretary of State aware that, although pension fund members own half of British industry, no member feels that he owns anything whatsoever? Will he give an undertaking that, when the Bill on pension law reform is brought forward, there will be provision in it for individual members to own their pension funds?

Mr. Lilley

I know that the hon. Member is keen on moving towards individual ownership of pension funds. Professor Goode and his committee indicated that individual ownership is a natural and inherent part of money purchase schemes, but is less so in final salary schemes. We have increased individuals' rights in respect of pensions, and have given them greater access to information and participation. We want to examine the report's recommendations to see how far forward we can carry that process.

It is a remarkable thing that individuals in this country, through their pension schemes, have such an immense ownership of wealth. It is good for them and the economy, and we want to make sure that that wealth is not only safe but is recognised as part of the rights that people have as a result of their savings during their working lives.

Mr. David Willetts (Havant)

I welcome the report, because it shows how right my right hon. Friend was to establish the Pension Law Review Committee. I particularly welcome the recognition in my right hon. Friend's statement and the report that it is important that pensions are not over-regulated. As the Department of Social Security has now commenced its consultation exercise, I hope that it will not add extra regulations and new devices, but, if anything, will deregulate pensions further.

Mr. Lilley

My hon. Friend is right. We must make sure that we do not impose such burdens on employers that they cease to run pension funds—that would be to kill the goose that laid the golden egg. Equally, we must provide security; we must not trade off security to achieve lower burdens on business. But we must find ways of achieving security that do not impose excessive burdens on business. That principle also guided the committee. I welcome that, and the fact that it tried to find ways in which existing regulatory burdens can be lightened in the process of any reforms that we may introduce in future.

Mr. Alistair Darling (Edinburgh, Central)

Does the Minister accept that, if he set a firm timetable for legislation, that would concentrate minds—not least in his Department—during the consultative process? Does he further accept that, for both public and industry, the need to put a regulator in place as soon as possible is urgent —unless the Government are to continue their sometimes casual, if not slapdash, approach to regulation in the public interest?

Mr. Lilley

I can assure the hon. Gentleman that the minds of my officials are distinctly concentrated on making as rapid progress as is consistent with effective consultation and achieving sensible outcomes. It is my experience that employers and others involved in the pensions industry—we will want to involve them too in the consultative process—are also eager to make progress. We will have no difficulty on that front.

I have not laid out a firm programme for legislation, for the same reasons why no Secretary of State could do so: we cannot bind ourselves before we have made decisions about the competing pressures on future parliamentary time.

Mr. Iain Duncan Smith (Chingford)

I congratulate my right hon. Friend on his excellent statement in response to the Goode report. I ask him to bear in mind that the average occupational or private pension is about £60 a week, which, compared with a Government pension, is very good. So in all our efforts, we must attempt not to kill but to cure. I ask my right hon. Friend to bear this in mind when he deals with the regulatory side.

Mr. Lilley

My hon. Friend makes a good point. The average pensioner in receipt of an occupational pension receives £60 or more a week on top of his or her basic state pension as a result of the savings that he has put aside during his working life. New pensioners typically receive more than £70 a week from their occupation pensions, and the amount is rising. We want it to rise more as more people make better provision during their working lives. We want to encourage that. Essential in that process is reinforcing the confidence that people have in the pension funds in which they invest.

Mr. Terry Rooney (Bradford, North)

During the consultation exercise, will the right hon. Gentleman look at the local government scheme, which includes more than 1 million contributors and several hundred thousand beneficiaries? It always requires legislation to update the benefits in the scheme, which is consequently some 10 years behind current pension provision elsewhere.

Mr. Lilley

I will certainly look at that, although I am almost certain that it is an aspect rather different from the matters that will be central to implementing the Goode recommendations and the ideas that they were based on —but I will certainly examine the hon. Gentleman's point.

Mr. Alan Duncan (Rutland and Melton)

Has my right hon. Friend had the opportunity to reflect on the position of occupational pensions in the wider provision of pensions? Will he agree that they are a product in decline, as they restrict labour mobility and people have no control over their assets? Does he join me in wishing to encourage the rapid expansion of personal pensions that move with the individual and allow him some control over the assets in which he has invested?

Mr. Lilley

We need not have all one or all the other—all personal pensions or all final salary schemes. We have made it possible for people to have greater choice as between the two. We opened up personal pension schemes, since when about 5 million people have taken advantage of them. It was originally forecast that this would be at the expense of occupational pension schemes. In fact, the number of people with occupational pensions has risen at precisely the same time as 5 million more people have gained personal pensions.

We want to foster both types of scheme and we are keen not to make either less attractive to pensioners or employers.

Mr. Peter L. Pike (Burnley)

Does the Secretary of State recognise that many of my constituents have been affected by the serious abuses in the Belling pension scheme? Can he take immediate action to ensure that directors cannot, as they did in this case, borrow large amounts from the pension fund? Will he also ensure that pension funds do not buy, at inflated prices, subsidiaries of the parent company—as also happened in the Belling pension scheme?

Mr. Lilley

As the hon. Gentleman knows, regulations are now in force which limit the ability of pension schemes to invest in their own underlying parent companies, either by lending money to them or by buying shares or property that belong to them. The potential for that abuse has thus been severely restricted.

Mr. Peter Ainsworth (Surrey, East)

I warmly welcome my right hon. Friend's measured response to this complex and sensitive matter. I feel certain that by approaching it thus we shall achieve what we want—maximum protection for pensioners without impairment of the way in which pension schemes and pension fund management operate.

Does my right hon. Friend agree that not least among the most sensitive areas that Goode examined was that of solvency ratios, which are essential to any compensation? Will he give particular attention to that?

Mr. Lilley

I agree with my hon. Friend's points. We will give close consideration to the proposals on solvency and to the response that they have already elicited. It is important to get this right; it is equally important to ensure that schemes are properly funded.

Mr. Jimmy Wray (Glasgow, Provan)

The Minister has more confidence in Goode's proposals than Goode himself has. Goode could not give the committee a guarantee that they would be foolproof. Although he said that scheme members can be members of the trustee board, and although he said that a pensions regulator will be appointed, Goode's recommendation was ultimately to give sole responsibility for these matters to employers. If we are looking for a foolproof system of offering pensioners security, surely the first thing to do is to remove that power from employes.

Mr. Lilley

Professor Goode spelled out his intention when he said that he wanted to make a reality of the pension promise. We want to make sure that the promise inherent in membership of a pension fund is fulfilled—that its assets are there to ensure that it is fulfilled and properly funded, and that abuses do not occur. The professor said that nothing could be foolproof. That is a truism with which we would all agree. Our job is to try to exclude every conceivable opportunity for abuse and wrongdoing. That will be the criterion that we use when developing Professor Goode's ideas.

Dr. Liam Fox (Woodspring)

Can my right hon. Friend confirm that there will be a deferral of any collection of state scheme premiums from all the Maxwell pension funds? Will not that amount to a £100 million interest-free loan to the Maxwell fund? Will it not be a genuinely practical way of helping Maxwell pensioners, many of whom live in the Paulton area of my constituency?

Mr. Lilley

We have already announced the deferral of collection of state scheme premiums, which in effect gives the Maxwell pension schemes an interest-free loan worth more than £100 million. That has been widely welcomed by those involved. It has meant that pensions have been enabled to continue to be paid when they might not otherwise have been. It has eased the problem and provided a longer period in which to achieve an overall settlement, which I hope Sir Peter Webster will be able to achieve.

Mr. Keith Bradley (Manchester, Withington)

We want to endorse the welcome on both sides of the House for the statement. We look forward to the discussion papers, because it has been plain from questions today that there is not total agreement on issues such as solvency, surpluses, management, ownership, control, the number of trustees and a compensation scheme. Although we welcome the Secretary of State's assurance that he will support such a scheme, we shall look at it in greater detail when the proposals emerge, and we shall be pressing for the regulation of new funds when the legislation appears.

I recognise that any compensation scheme will not greatly benefit the Maxwell pensioners, but I press the right hon. Gentleman to use his good offices to ensure that litigation against companies holding Maxwell assets and asset chasing for the Maxwell pension scheme are pursued with all haste. Will he also ensure that all the money that is available from that source goes back to the Maxwell pensioners and is not swallowed up by legal or professional fees? I am certain that the Government will press that point strongly on behalf of Maxwell pensioners.

Secondly, the Secretary of State did not respond to the point raised by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) about limited index-linking of schemes in future. Will he make some further comment on that?

Finally, we will be pressing strongly for legislation to be brought forward at the earliest opportunity in the 1994–95 Session, and if there is anything we can do to help him press that case, we will be pleased to assist.

Mr. Lilley

I am grateful for the hon. Gentleman's support, which I am sure will carry a great deal of weight with my right hon. Friend should I meet any opposition in these matters. I am also grateful to know that some Opposition time may be made available to help us.

We shall certainly continue to do all we can to ensure that the Maxwell pension fund trustees and others pursue as effectively and rapidly as possible a settlement, particularly within the possible global settlement which Sir Peter Webster is now seeking. The object of that is not only to ensure that the issue is resolved more rapidly than if it went to court, but we are saved funds being drained off in lawyers' fees so that the money instead goes back to the pensioners in greater measure. I know that that has the widespread support of the House.

As far as limited price indexation is concerned, we made it clear that we intended to resolve a complexity of issues which bear on the obligations of pension funds before we decide whether and, if so, when that obligation should be imposed on pension funds. It is right that those other issues should be satisfactorily resolved first.