The Labour leader demanded to know why ministers had failed to act on repeated warnings from the Investment Management Regulatory Organisation that pension law was inadequate. An increasingly angry Mr Major accused Mr Kinnock of smears and of trying to spread blame in a 'truly disgraceful' fashion.
Last night, Dr Marjorie Mowlem, Labour's City spokesperson, called on the Prime Minister to apologise as she produced a report from Imro to the Commons Social Security Committee underlining that it had sent a specially commissioned study of the incompatibility of trust and financial services law to the Government. That incompatibility 'much handicapped' the supervisors, Imro said.
The clash came as Mr Kinnock recalled at Prime Minister's questions that George Nissen, Imro's chairman, had said in his resignation statements on Monday that 'for some years we have been telling the Government of the problems of pension and trust law'.
Mr Kinnock said: 'Why did the Government take no effective action in response to these repeated warnings from the regulatory body?'
The Prime Minister said he did not accept Mr Kinnock's conclusion, and that the Government had made a series of announcements about short-term action. It was still awaiting information about the Maxwell affair.
Mr Kinnock retorted that he and everyone else was inclined to believe Mr Nissen's word, and asked again if it was not the case that 'over a period of years and long before the Maxwell scandal, the regulatory body was giving warnings of the problems to the Government?'
Mr Nissen, he said, had taken his share of the responsibility and resigned, while stressing that no one should attach the blame solely to Imro. 'When we can expect the Government to take its share of the responsibility, and when can we expect ministers to follow Mr Nissen's example?'
Mr Major said: 'You are seeking to spread blame where it doesn't exist, in a truly disgraceful way. You may seek to smear, but you will have to wait until the information is available.'
He implied Mr Kinnock had done the same last year over the collapse of BCCI, although the Government-commissioned inquiry report into BCCI has yet to be published. Mr Major said he understood that the Securities and Investments Board wanted to publish as much as possible about its inquiry into the Maxwell affair. But to publish it in full could be 'severely prejudicial to criminal proceedings'.
The clash came as Peter Lilley, Secretary of State for Social Security, finally laid the regulations which will make pension funds creditors of employers that are wound up. Although the change in the law - first trailed two years ago - will apply to the Maxwell companies, it is not greatly expected to benefit their pensioners.Reuse content