In accordance with
Council Procedure Rule No. 13.1, Councillor P. Peacock moved and
Councillor D. Lloyd seconded a motion to the following
effect:
“On
the 29th of April 2021 the Business, Energy and
Industrial Strategy Committee published their investigation into
the surplus sharing arrangements between the UK Government and the
Mineworkers Pension Scheme.
Since privatisation of the Mineworkers’
Pension Scheme in 1994, successive Governments have received 50% of
surpluses in the Scheme’s value, in return for providing a
guarantee that the value of pensions will not decrease. At the time
it was expected that the Government would receive approximately
£4bn from the arrangement in today’s money. However, to
date, the Government has received £4.4bn, and is also due to
receive at least another £1.9bn, on top of 50% off any future
surpluses. The Government has not paid any funds into the Scheme in
return.
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, 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.
Tens of thousands of former mineworkers and their
families reside within our district. Newark and Sherwood District
Council support their calls for the Government to take seriously
and act on the following findings of the Business, Energy and
Industrial Strategy Committee:
-
“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”.
-
“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 the
miners’ pensions as an opportunity to derive
income”.
-
“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”.
-
“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”.
-
“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”.
In supporting these findings Newark and Sherwood
District Council will write to the Chancellor of the Exchequer
asking him to act immediately to the findings of the Business,
Energy and Industrial Strategy Committee and implement/respond to
their recommendations.”
The motion, on being
put to the meeting was declared carried unanimously.