Select committee: Business, Innovation, Science and Trade Committee
Recommendation 13
Sixth Report - Mineworkers’ Pension Scheme
Published 29 Apr 2021
Paragraph 58
Addressed to Department for Business and Trade
Business, Innovation, Science and Trade Committee Mineworkers' Pension Scheme All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
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.
From: Business, Innovation, Science and Trade Committee, Sixth Report - Mineworkers’ Pension Scheme (HC 1346), paragraph 58, 29 April 2021
Government response
The government responded to the whole report on 5 July 2021 (deadline 29 June 2021).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government states it is "unable to agree to the Committee's recommendations" and continues to believe the 1994 arrangement "was fair and beneficial to both Scheme members and taxpayers".
- It does not accept that it has benefitted unduly, saying the arrangements "have been a success and benefitted all parties".
- It does not accept that the Trustees had no choice in 1994, noting they "could have declined the offer of the guarantee at that time".
- On changing the terms, it says BEIS Ministers "would be happy to have that discussion" if the Trustees want to leave the guarantee arrangements, but notes the Trustees have indicated the guarantee is worth more than the share of surpluses.
- It is "happy to consider ways to improve benefits", but says this "has to be weighed against the risks to taxpayers". It states that receipts go to the Exchequer and were never intended to be ringfenced for members or coalfield communities.