Maxwell Pensioners (Hansard, 17 March 1995)

§ Mr. Lilley

In June 1992, I announced a number of exceptional measures to help the Maxwell pensioners. This followed the discovery of a shortfall in scheme assets of some £440 million, affecting the pension rights of some 32,000 pension scheme numbers. About 4,000 current pensioners faced large and immediate cuts in their payments and about 12,000 future pensioners had no prospect of their pensions coming into payment. These 743W measures have ensured that all pensions have stayed in payment while uniquely complicated asset recovery work has been undertaken by the pension scheme trustees and the liquidators of the Maxwell pension investment company.

The measures the Government took were: the provision of £2.5 million in emergency funding to keep pensions in payment in the short term; setting up the Department's Maxwell pensions unit and the Maxwell Pensioners Trust, chaired by Sir John Cuckney, which raised some £6 million; and deferring the collection of some £115 million in state scheme premiums payable on the pensioners' return to the state earnings-related pension scheme, which amounts to a substantial interest-free loan. Sir John Cuckney also acted as my adviser on the Maxwell pensions affair.

The Government and the Maxwell Pensioners Trust have encouraged the parties to Maxwell pensions claims to consider the possibility of out-of-court settlements and mediation so that the cost and delays of litigation can be kept to a minimum. On 10 February, I warmly welcomed the announcement by the scheme trustees and the liquidators that they had agreed in principle a basis of a major settlement of various claims. This agreement was subject to terms and conditions also being agreed and obtaining the necessary court approval. Other claims are unaffected and are being pursued separately.

I hope that the parties concerned will be able to finalise a settlement. I shall continue to follow developments closely as, I am sure, will others, including the Social Security Committee, who have done excellent work on behalf of the pensioners. Sir John Cuckney and the Maxwell pensions unit have played an important role in

	1996	1997	1998
Short-term incapacity benefit (lower rate)	40,000	40,000	40,000
Short-term incapacity benefit (higher rate)	30,000	30,000	30,000
Long-term incapacity benefit	170,000	200,000	225,000
Totals	235,000	265,000	290,000

Notes:

1. Estimates are rounded to the nearest 5,000. Totals may not sum due to rounding.

2. As some estimates are based on small sample sizes, the data should be treated with caution.