|Previous Section||Back to Table of Contents||Lords Hansard Home Page|
Baroness Jay of Paddington: My Lords, we have dealt with this point on several occasions. As is customary in many such appointments arrangements, PricewaterhouseCoopers was asked by the Cabinet Office to provide some logistical help in relation to setting out the advertisements, preliminary sifting and so on for that commission. As I said, I have given the exact terms of reference and the scope for that firm in the Written Answer which has appeared in the Official Report.
No, I do not regret that I did not come to explain to this House that rather immediate administrative arrangement made by the Cabinet Office. All the arrangements for the setting up of the appointments commission for the interim House were made clear in some detail in the White Paper published last January by the Government, and extensively discussed--I gave the noble Lord references--during Committee and Report stages of the House of Lords Bill.
Lord Ezra: My Lords, I thank the noble Lord for that information. Is he aware that, in addition to the payments made so far, a reserve fund of nearly £4 billion has been built up in the pension fund accounts from which future payments to the Government will be made at not less than £250 million per year for many years ahead? That sum and the payments made so far are vastly in excess of anything that might have been anticipated and, indeed, in excess of any reasonable risk that the Government might run in having to meet future deficiencies in the pension fund.
In those circumstances, and bearing in mind the need for additional assistance in the coalfield areas and also that further pit closures are contemplated, will the Government not consider that, out of that bonanza which has come their way, and which was not expected, further contributions should be made to help former mineworkers and mineworkers likely, shortly, to be out of a job?
Lord Sainsbury of Turville: My Lords, two sums are involved. I refer first to the £1.8 billion held in the investment reserves of the pension schemes, which comprises British Coal's unused share of the pre-1994 valuation surpluses, and which is being paid to the Government over a minimum of 25 years; and, secondly, to that being paid as a result of the 1994 valuation surpluses, which I have mentioned.
As regards the balance of assets and liabilities which will accrue to the Government as a result of the privatisation of British Coal in 1994, we shall not know the amount of such balance for 30 to 40 years as this pension scheme will probably run for 50 to 60 years. To date, the balance has been in favour of the scheme and the Government. However, there is no reason to suppose that in future years it will not go the other way. As governments are to pick up the deficit, the policy of the pension fund trustees can be largely divested in high-risk equities which will benefit the coalminer pensioners. Unless the Government were to pick up the potential deficit, that would not be possible.
Lord Marsh: My Lords, does the Minister not agree that when we sat through the extraordinary treatment of state/industry pension surpluses at the time of privatisation, some of us found the argument which the Minister has repeated totally unconvincing? It is no more convincing today. Is he aware of the negotiations on behalf of the former employees of the National Bus Company about their pension surpluses? Will the decision to make payments from such surpluses, to
Lord Sainsbury of Turville: My Lords, the arrangements entered into under the schemes in 1994 were undertaken by the trustees of both schemes. As I understand it, the trustees continue to believe that such schemes are in the best interests of their members. Perhaps I may repeat that Her Majesty's Government have accepted a contingent liability in this case of over £17 billion. The safeguard provides for the trustees to be able aggressively to fund an equity-rich portfolio which would not normally be suitable for a mature pension fund of this sort.
Lord Hardy of Wath: My Lords, does my noble friend agree that it would take a particularly imaginative actuarial exercise for there to be any prospect of the Government finding money to sustain this fund, not least because of the relatively low life expectancy of most of those who have worked in the mining industry? Does he further agree that given the intensity of economic and social need which continues within the coalfields, it would be appropriate for the Government to allow a little more of that surplus to reach organisations such as the Coalfields Regeneration Trust which is capable of helping those areas to surmount the difficulties, which remain intense?
Lord Sainsbury of Turville: My Lords, I do not believe that it would require an imaginative actuary to suggest that there will be a turn-round. I agree that present circumstances appear to favour the Government. However, given that the fund may last for 50 to 60 years, it is not difficult to think of scenarios where the situation would reverse.
The balance of assets and liabilities in the trust is a separate question from the amount that the Government should appropriately invest in the regeneration of coalfields. As at present, that amount should be properly generous. In December 1998, the Government announced an investment package of £354 million, which was substantial. As I have said, this subject can always be debated but it is independent of the question of what finally turns out to be the balance of assets and liabilities in the particular pension funds.
Lord Dormand of Easington: My Lords, is my noble friend aware that I asked a similar Question some months ago? Since that time the fund has continued to accrue many more millions. Given the figures he has quoted, I am not entirely convinced that there is not room to meet the point of the Question. Everybody in the former coalfield areas appreciates the generous help given by the Government. However, is the Minister aware of the large pool of unemployed
Lord Sainsbury of Turville: My Lords, as I have said, Ministers have made it clear, and will continue to do so, that they will listen to concerns raised. They will study the document from the Coalfield Communities Campaign seriously, as, indeed, will the trustees.
Lord Brookman: My Lords, does the Minister agree that the key issue underlying the question of pension schemes is that the workers believe that pension contributions are deferred pay? As a consequence, when employers seem to be taking the lion's share, whether in the coal industry or any other industry, that is seen to be grossly unfair by the workers in such industries?
Lord Sainsbury of Turville: My Lords, I understand that this was a defined benefit scheme. Therefore, the liability on both the Coal Board and the Government, who have accepted the responsibility, is properly to fund those benefits, including any bonuses payable because of the upward valuation of the fund. That is a responsibility of the Coal Board of the past and of the government of the future which will be discharged, whatever the circumstances, over the long life of the fund.
Lord Ezra: My Lords, it seems that it would be possible for part of the Government's share of the surpluses to be transferred to the Coalfields Regeneration Trust. As I understand it, £10 million has already been transferred. My contention is that £10 million is paltry in relation to the sums to which we are referring. As there would appear to be a mechanism for such transfers, could not the Government contemplate transferring a little more?
Lord Sainsbury of Turville: My Lords, it is always possible for the Government to make such a payment in the circumstances referred to by the noble Lord. I agree that there was a payment of £10 million which, in the total sum of all the payments, seems to be de minimis. It is always in the power of the Government to make a gift of money to the coalfields campaign or the trust from general government funds.
Back to Table of Contents
Lords Hansard Home Page