HC Deb 27 October 1992 vol 212 cc643-4W
Mr. Congdon

To ask the Secretary of State for Social Security what progress has been made by the special unit and the trust fund established to assist the Maxwell pensioners.

Mr. Lilley

On 8 June I announced a number of Government initiatives following the loss of assets from the Maxwell pension schemes. These included the provision of a £2.5 million emergency fund to help to keep pensions in payment in the short term, the setting up of the Maxwell pensions unit within my Department, and the establishment of the Maxwell Pensioners Trust.

The unit has made grants amounting to just over £1 million to eight pension schemes. All pensions in payment in February 1992 are being paid, as are those due to people who have retired since then at the normal retirement age for their scheme. In addition, grants have been made in respect of people who have retired since February 1992 on grounds of ill health. Pension scheme members who have been contracted back into the state earnings-related pension scheme (SERPs) have that part of their pensions paid direct by my Department.

The unit is also working with Sir John Cuckney, as chairman of the Maxwell Pensioners Trust and special adviser to the unit, to help in the recovery of missing assets, by encouraging out-of-court settlements wherever possible, reducing the time and cost of legal actions. The unit has established constructive working relationships with pension scheme trustees, the liquidators and administrators dealing with the Maxwell companies, and the pensioners action groups.

The Maxwell Pensioners Trust was formally constituted on 17 July to help secure Maxwell pensions in the longer term. Following an initial appeal, the trust has raised just under £6 million. And payments have already been made, or are being processed, to 86 ex gratia pensioners. This is a creditable achievement, but substantially more funds are needed if the justifiable anxiety felt by the pensioners about their future security is to be properly addressed.

No Government could accept an obligation to use taxpayers' money to make good losses resulting from fraud. However, I believe it is right for the Government to exercise those responsibilities we do have in ways which actively assist the pensioners' position. I am announcing one further such step today.

When pension scheme members who have been contracted out of SERPS are brought back into the state scheme, the pension scheme is required to pay state scheme premiums for each member to the national insurance fund. The amounts involved can be substantial. I have discretion to postpone collection of these premiums for as long as I am satisfied that it would not be in the interests of scheme members to enforce payment.

I have decided to exercise this discretion, on a scheme by scheme basis, in the case of the Maxwell pensioners. This amounts to an interest-free loan to the trustees of the pension schemes of some £100 million. It is a major extension of Government assistance to securing pensioners' financial future, and it will give the schemes a breathing space while the remaining matters in dispute are resolved.

This measure will not close the gap between the Maxwell schemes' assets and liabilities. For that, we still need substantial contributions to the trust. I hope that this further example of Government support will encourage those companies and institutions that have not so far felt able to contribute to the trust to reconsider its position.