Recommendations & Conclusions
18 items
1
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
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 AI summary
The government rejects the committee's conclusion, stating that the Trustees did have a choice regarding the 1994 proposal and could have declined the guarantee. It maintains that the 1994 arrangement was fair and beneficial to both Scheme members and taxpayers.
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Department for Business and Trade
2
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
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 AI summary
The government rejects the conclusion, asserting that the Trustees had a choice in 1994 and that the agreed arrangement was fair and beneficial due to the government taking on all the risk.
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Department for Business and Trade
3
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
The 50:50 split was, and remains, arbitrary.
Government response AI summary
The government rejected the conclusion, asserting that the Trustees had a choice in 1994 and reiterating its belief that the 50:50 arrangement was fair and beneficial to both scheme members and taxpayers.
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Department for Business and Trade
4
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
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.
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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.
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Government response AI summary
The government rejected the implied criticism of the Mineworkers’ Pension Scheme arrangement, arguing that the 1994 agreement was fair, beneficial to members and taxpayers, and that trustees had a choice to decline the offer and its associated guarantee.
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Department for Business and Trade
5
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Not Addressed
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 AI summary
The government's response focuses on defending the fairness of the 1994 agreement and the risks it took on, but does not directly address the committee's specific finding that the government has not paid any funds into the Scheme since 1994.
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Department for Business and Trade
6
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Not Addressed
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 …
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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 the Scheme, and the vast sums which have been paid to the Government, it is unconscionable that many of the Scheme’s beneficiaries are struggling to make ends meet.
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Government response AI summary
The government's response defends the fairness of the 1994 pension agreement and the Trustees' autonomy, but does not address the committee's concerns about the chronic health issues and financial struggles faced by former mineworkers.
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Department for Business and Trade
7
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
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 …
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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 practice. The number of Scheme members and the relative size of the fund has fallen significantly since 1994. Yet, the Government’s ‘price’ for the guarantee has not been adjusted to reflect that fact. With no formal period review mechanism built into the agreement, pension members remain tied to an expensive arrangement.
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Government response AI summary
The government explicitly rejects the committee's conclusion, stating it continues to believe the 1994 arrangement for sharing surpluses in the Mineworkers’ Pension Scheme is fair and beneficial because the government has taken on all the risk.
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Department for Business and Trade
8
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Not Addressed
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 …
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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 at some point in the future, realistically its contribution will not come close to the (at least) £6.3bn it is currently due to receive in total.
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Government response AI summary
The government response consists only of a title and does not address the committee's conclusion regarding the Mineworkers’ Pension Scheme's financial health and the likelihood of government contributions.
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Department for Business and Trade
9
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Not Addressed
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 …
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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 for the Government to continue to argue that the arrangements remain fair.
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Government response AI summary
The government acknowledges the historical context of miners' conditions and compensation but fails to address the conclusion that the 1994 pension arrangements have unduly benefited the government and are now untenable.
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Department for Business and Trade
10
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Not Addressed
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 …
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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 view miners’ pensions as an opportunity to derive income. We also note that allowing the arrangement to continue would appear antithetical to the Government’s stated aim of redressing socio-economic inequality and ‘levelling up’ left-behind communities. (Paragraph 49) Changing the terms of the 1994 agreement
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Government response AI summary
The government acknowledges the historical context of miners' conditions and compensation but does not address the conclusion that it should not profit from mineworkers' pensions or that the current arrangements conflict with levelling up goals.
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Department for Business and Trade
11
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
Not Addressed
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 …
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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 the Trustees’ acceptance of the deal for contentment.
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Government response AI summary
The government acknowledges the historical conditions and its compensation for former miners, but does not address the committee's recommendation regarding the government's claims about the Trustees' contentment with the pension arrangements.
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Department for Business and Trade
12
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
Not Addressed
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 …
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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 interests of the pension members in mind.
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Government response AI summary
The government did not address the recommendation about approaching future discussions with an open mind, instead acknowledging the harsh conditions miners faced and past compensation efforts for health issues.
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Department for Business and Trade
13
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
Not Addressed
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 …
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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 a revised agreement in which the Government is only entitled to a share of surpluses if the Scheme falls into deficit, and the Government has to provide funds. In that event, the Government should be entitled to 50% of future surpluses up to the total value of the funds it has provided to make up any shortfall. Such an arrangement takes account of the vast funds the Government has received thus far and the significant reduction in the risk it faces, and would ensure that neither party will be out of pocket in future.
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Government response AI summary
The government acknowledges the historical context of coal miners' conditions and its compensation efforts but does not address the recommendation to review or replace the current pension arrangements.
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Department for Business and Trade
14
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
Rejected
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 …
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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 out its proposals for how and when this will be administered in response to this report. (Paragraph 63) Conclusion
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Government response AI summary
The government rejected the recommendation to hand the £1.2bn Investment Reserve back to miners, but stated it is willing to explore with Trustees options for providing members with a lump sum payment within the existing framework.
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Department for Business and Trade
15
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Rejected
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 AI summary
The government rejected the conclusion, stating it continues to believe the 1994 arrangement was fair and beneficial to both scheme members and taxpayers, with the government bearing all the risk.
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Department for Business and Trade
16
Conclusion
Sixth Report - Mineworkers’ Pension Sch…
Acknowledged
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 …
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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 governments have failed to deliver this.
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Government response AI summary
The government acknowledges the harsh conditions faced by coal miners and states that it took on liabilities at privatisation, compensating former miners and their families for health issues.
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Department for Business and Trade
17
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
Rejected
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 AI summary
The government rejects the recommendation, stating it does not accept that it has unduly benefited from the surplus sharing arrangements, which it views as successful and beneficial to all parties.
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Department for Business and Trade
18
Recommendation
Sixth Report - Mineworkers’ Pension Sch…
Not Addressed
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 AI summary
The government did not address the recommendation to carefully consider the committee's proposed equitable arrangements, instead referencing the Trustees' past preference to retain the guarantee and prioritising bonus protection.
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Department for Business and Trade