Recommendations & Conclusions
18 items
1
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
The Scheme’s Trustees had little choice but to accept the Government’s proposal to divide future surpluses on a 50:50 basis, as a condition of securing the Government’s guarantee during the negotiations in 1994.
Government response. 6. The Government does not accept that the Trustees had no choice about the Government proposal in 1994. We note that if the Trustees did not think the 50:50 offer was a reasonable one, they could have declined the offer …
Department for Business and Trade
2
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
The Government failed to conduct due diligence during the 1994 negotiations and undertook no empirical analysis or evaluation to inform or support the 50:50 split it proposed. The Government was negligent not to take actuarial advice.
Government response. 6. The Government does not accept that the Trustees had no choice about the Government proposal in 1994. We note that if the Trustees did not think the 50:50 offer was a reasonable one, they could have declined the offer …
Department for Business and Trade
3
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
The 50:50 split was, and remains, arbitrary.
Government response. 6. The Government does not accept that the Trustees had no choice about the Government proposal in 1994. We note that if the Trustees did not think the 50:50 offer was a reasonable one, they could have declined the offer …
Department for Business and Trade
4
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
To date, the Government has received £4.4bn from the Mineworkers’ Pension Scheme. This is already more than the 1994 expectations of what the Government would receive. The Government is also due to receive at least another £1.9bn, on top of 50% off any future surpluses.
Government response. 6. The Government does not accept that the Trustees had no choice about the Government proposal in 1994. We note that if the Trustees did not think the 50:50 offer was a reasonable one, they could have declined the offer …
Department for Business and Trade
5
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
The Government has not paid any funds into the Scheme since the surplus sharing arrangement was put in place in 1994. (Paragraph 23) Fairness of the current terms
Government response. 6. The Government does not accept that the Trustees had no choice about the Government proposal in 1994. We note that if the Trustees did not think the 50:50 offer was a reasonable one, they could have declined the offer …
Department for Business and Trade
6
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Many former mineworkers have chronic health issues directly related to their former occupation, and the former coalfields are amongst the most deprived areas of the UK. Sadly, their numbers are also decreasing year by year. Over half of Scheme members receive less than the average pension. Given the success of …
Government response. 6. The Government does not accept that the Trustees had no choice about the Government proposal in 1994. We note that if the Trustees did not think the 50:50 offer was a reasonable one, they could have declined the offer …
Department for Business and Trade
7
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
We recognise that the Government’s guarantee is important, has contributed to the success of the Scheme, and has benefitted Scheme members. However, we are not convinced by the Government’s argument that its entitlement to 50% of surpluses is proportionate to the relatively low degree of risk it actually faces in …
Government response. The Government continues to believe that the arrangement agreed in 1994 was fair and beneficial to both Scheme members and taxpayers. Scheme members have rightly shared in the benefits but the Government has taken on all the risk.
Department for Business and Trade
8
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Given that the Scheme has continued to produce strong returns despite the 2008 Financial Crisis and the COVID-19 pandemic, there is little reason to believe the Government will be required to pay into the Scheme before it is wound-up. Even if, in extremis, the Government is required to financially contribute …
Government response. Mineworkers’ Pension Scheme: Government Response 3
Department for Business and Trade
9
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Whether or not the Government knew in 1994 that it would disproportionately benefit from the arrangement, and whether all parties thought it was fair at the time, 24 Mineworkers’ Pension Scheme is irrelevant. It is patently clear today that the arrangements have unduly benefited the Government, and it is untenable …
Government response. 13. The Government recognises the harsh conditions in which coal miners worked and the health issues those conditions caused. At privatisation, the Government took on British Coal’s liabilities and has since compensated former miners and their families for the damage …
Department for Business and Trade
10
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Governments should not be in the business of profiting from mineworkers’ pensions. We are therefore disappointed by the Government’s argument that the 1994 agreement is a success because the public purse has had strong returns from it. The Government is not a corporate entity driven by profit-motives, and should not …
Government response. 13. The Government recognises the harsh conditions in which coal miners worked and the health issues those conditions caused. At privatisation, the Government took on British Coal’s liabilities and has since compensated former miners and their families for the damage …
Department for Business and Trade
11
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
The Government is disingenuous in claiming the Trustees are content with the terms of the current arrangements. The Trustees have been clear that they are not - and never were - happy with the terms, and that they would welcome any changes in members’ favours. The Government should not mistake …
Government response. 13. The Government recognises the harsh conditions in which coal miners worked and the health issues those conditions caused. At privatisation, the Government took on British Coal’s liabilities and has since compensated former miners and their families for the damage …
Department for Business and Trade
12
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
We are disappointed by the Government’s dismissive approach to proposals to review the existing arrangement. The Minister’s claim of openness is contrary to the approach successive governments have taken since 1994. The Government must approach any future discussions with the Trustees with a genuinely open mind, and with the best …
Government response. 13. The Government recognises the harsh conditions in which coal miners worked and the health issues those conditions caused. At privatisation, the Government took on British Coal’s liabilities and has since compensated former miners and their families for the damage …
Department for Business and Trade
13
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
With the benefit of hindsight, it is clear that the Government has already profited greatly from the Scheme. The Government must acknowledge that continuation of the arrangements in their current form deserves a review and a better outcome for pensions should be found. The current arrangements should be replaced with …
Government response. 13. The Government recognises the harsh conditions in which coal miners worked and the health issues those conditions caused. At privatisation, the Government took on British Coal’s liabilities and has since compensated former miners and their families for the damage …
Department for Business and Trade
14
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
Whilst we have called for the 50:50 split to be replaced with a more appropriate arrangement moving forward, we believe pensioners should also receive a more immediate uplift. We recommend that the Government hands the £1.2bn it is due to receive from the Investment Reserve back to miners, and sets …
Government response. Reject. The Government is very sympathetic to the situation of former miners. The Government has been considering possible ways to provide additional benefits to members within the current framework of the guarantee and surplus sharing arrangements, without putting taxpayer funds …
Department for Business and Trade
15
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
The Government’s guarantee has undoubtedly benefitted the Scheme’s members by providing vital security that the value of pensions will not decrease. However, the price of this guarantee is no longer fair. (Paragraph 64) Mineworkers’ Pension Scheme 25
Government response. The Government continues to believe that the arrangement agreed in 1994 was fair and beneficial to both Scheme members and taxpayers. Scheme members have rightly shared in the benefits but the Government has taken on all the risk.
Department for Business and Trade
16
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
The beneficiaries of the Mineworkers’ Pension Scheme toiled in dreadful conditions, to keep the country’s lights on. Many now live with industrial diseases caused by the dangerous nature of their former occupation. The least they should expect in return is the secure retirement they were promised decades ago. Yet, successive …
Government response. The Government recognises the harsh conditions in which coal miners worked and the health issues those conditions caused. At privatisation, the Government took on British Coal’s liabilities and has since compensated former miners and their families for the damage done …
Department for Business and Trade
17
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
The Government must now accept its moral obligation to the Scheme members, and acknowledge that continuation of the surplus sharing arrangements in their current form robs beneficiaries of the financial security they have rightfully earned.
Government response. The Government does not accept that it has benefitted unduly from the arrangements which have been a success and benefitted all parties. Indeed, the concerns about the extent of payments to the Government for its share of surpluses have only …
Department for Business and Trade
18
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
Our recommendations set out equitable arrangements which would go some way to redressing the sense of historic injustice felt by the Scheme’s members. The Government must consider them carefully. (Paragraph 67) 26 Mineworkers’ Pension Scheme
Government response. 22. The Trustees have been clear that they would prefer to retain the guarantee rather than take 100% of future surpluses. In the changes to the Scheme that they suggested in 2019, which were agreed by the Government, they prioritised …
Department for Business and Trade