Mirror Group Newspapers plc: Investigation (Hansard, 8 May 2001)

§ The Minister for Science, Department of Trade and Industry (Lord Sainsbury of Turville)
My Lords, Her Majesty's Government and the relevant regulators are carefully considering what action should be taken in response to the inspector's findings.
On the question of possible director's disqualification against individuals whose conduct is criticised, legal advice is being taken before deciding on whether such proceedings are appropriate. Ministers hope to be in a position to make that decision as soon as possible.
The Independent Company Law Review Steering Group has also been asked to consider the issues raised in the report which are relevant to the work of the review and to make recommendations.
On other regulatory issues, liaison is continuing with the relevant regulatory bodies, including the Financial Services Authority, the Stock Exchange and the Occupational Pensions Regulatory Authority in order to ensure that, where appropriate, progress is made towards implementing the inspector's recommendations. Given the length of time it has taken to produce this report, the Government are keen to see rapid progress made, subject to a careful consideration of the complex issues involved.

§ Lord Phillips of Sudbury
My Lords, does the Minister accept that there is grave public disquiet about the whole course of the Maxwell affair and public reflection on the fact that effectiveness of the hoards of professionals involved in the affairs of Maxwell appears to have been in inverse ratio to the size of the frauds and the size of their fees?
Given that the report contains 101 recommendations, will the Government contemplate having an annual occasion on which this House and the public can be told what progress is being made with regard to each of those recommendations?

§ Lord Sainsbury of Turville
My Lords, this is an extremely complicated investigation which involved the interviewing of 180 witnesses. It has taken a long time to complete because it was broken up by the court cases which took place in the middle of it and the difficulties of getting Mr Kevin Maxwell to give evidence. In those circumstances, it has been carried in a timeframe with which one cannot argue and to a cost which is not unreasonable.
Of course, there are many lessons to be learnt and we shall pursue them as fast as possible. The inspectors suggest that a monitoring mechanism should be put in place to ensure that the recommendations are carried through. The department will examine how best that can be done.

§ Lord Clinton-Davis
My Lords, does the Minister acknowledge the need for all inspectors to be representatives of the Department of Trade and Industry, as was the case in my day? Is it not required 898 by the present Administration that there should be an overall view of what the inspectors do, how they do it and when they do it?

§ Lord Sainsbury of Turville
My Lords, the inspectors have carried out the investigation perfectly appropriately in the circumstances. The fact that one of the inspectors became a High Court judge in no way slowed up the process. Certain questions need to be asked about the length such reviews take, which is why the Secretary of State has initiated an internal examination into whether Sections 432 and 442 of the Companies Act 1985 can be speeded up while still giving careful consideration to the issues.

§ Baroness Gardner of Parkes
My Lords, can the Minister quantify the exact costs to the public purse of the whole Maxwell issue, not only this report but the legal cases that have been heard? As regards the report, can he tell us whether he believes it would have been shorter had people not been paid on an hourly basis to do it?

§ Lord Sainsbury of Turville
My Lords, I am sure that I speak for the whole House in saying that it is appalling ever to say anything which might imply that the members of the legal profession could in any way be tempted by such action. The current breakdown of costs shows that the accounting inspector and his team cost £7 million and the legal inspector and the legal costs were £1.5 million, making a total of £8.5 million, excluding VAT. The investigation took a long time and was immensely complicated. It was broken up by the two incidents I mentioned: the court proceedings and the difficulty in obtaining the final evidence from Mr Kevin Maxwell. Taking into account those two factors and the sequence of events, the investigation could not have been undertaken quicker.

§ Lord Marsh
My Lords, does the Minister agree that the key issue in the case is that over £400 million has been plundered from the pension funds of a series of quoted companies? Regardless of the time taken so far, would it not be indefensible if that outrage went totally unpunished?

§ Lord Sainsbury of Turville
My Lords, there are two parts to the question. First, the court cases took place and judgments were reached. The inspectors rightly took the view that they should not undertake inquiries covering the same ground as those covered by the court cases. They therefore considered the other issues involved and we are considering and taking legal advice on action which should follow as regards the disqualification of directors.

§ Lord Northbrook
My Lords, may I ask the Minister whether any Labour Members of this House were involved with the Maxwell companies?

§ Lord Sainsbury of Turville
My Lords, after 10 years, the inspectors' review is now available to everyone. It 899 sets out their views on all those who participated and comments on those whom they believe to be responsible for all these actions.