Frank Field, chairman of the House of Commons Social Security Select Committee, plans to write to Michael Heseltine, President of the Board of Trade, in the next few days to ask why the DTI took more than a year to pass on the recommendations from its own inspectors who investigated the mini-conglomerate Bestwood, where money was stolen from pension funds in a Maxwell- style scandal.
The report was passed to the DTI in March 1991, more than seven months before Robert Maxwell died and four months before the bulk of the pounds 400m was taken out of the pension funds and used to secure loans to private companies in the Maxwell empire.
Mr Lilley was Trade Secretary during the period in which the DTI sat on the report, and will have to justify his actions before the social security committee on Wednesday.
The report into Bestwood, and its subsidiary Atlanta Fund Managers, was written by Gabriel Moss, one of the leading commercial QCs, and John Venning, partner at the accountants Robson Rhodes, and handed to the DTI on 26 March, 1991.
It was not published immediately as the Serious Fraud Office was investigating the company and ultimately obtained convictions against three people involved in the scandal, in which more than pounds 1m was taken from the pension funds of firms owned by Bestwood.
A number of points not relevant to the SFO inquiry could have been released, however. Mr Moss and Mr Venning specifically recommended that the social security secretary restrict the level of 'employer-related investment' by pension funds to 5 per cent of the fund's assets, that there should be at least one independent trustee on the board of pension funds and that the law be changed so that the funds are managed by someone wholly independent of the employers or trustees.
The first and third recommendations would have significantly changed the way the Maxwell pension schemes were operated. As one former Maxwell executive said, after reading the Bestwood report: 'It might not have stopped the theft, but it would have been another red light flashing down Throgmorton Street.'
However, the DTI did not pass the recommendations in the report to the Department of Social Security until April 1992, by which time Mr Lilley had left and Mr Heseltine taken over.
Two months later Mr Lilley, in his new role, announced that there would be a fundamental review of pension regulation. He set up a committee, under the Oxford don Roy Goode, to review pensions regulation. The Goode committee, however, has come up with recommendations less stringent than those by Mr Moss and Mr Venning.
'It is quite clear that the Maxwell pension funds were substantially raided after our report was written,' said Mr Moss.Reuse content