HL Deb 17 April 2000 vol 612 cc459-60

3.2 p.m.

Lord Dormand of Easington

asked Her Majesty's Government:

Whether they will reduce their annual claim on the British Coal pension fund in order to increase the payments made to claimants who are former miners.

Lord McIntosh of Haringey

My Lords, since 1994 the Government have acted as guarantor to the former British Coal pension schemes. In return the Government receive 50 per cent of any actuarial scheme surpluses; the remaining 50 per cent being available to the scheme trustees for distribution among their membership. While the Government do not mean to re-open the guarantee arrangements, they are discussing with the trustees whether there are opportunities to build upon them to the mutual benefit of scheme members and government.

Lord Dormand of Easington

My Lords, does my noble friend recall that when a Starred Question was asked on this subject on 14th February this year, the noble Lord, Lord Sainsbury, said that, since 1994, £519 million has been received since the 50 per cent scheme came into operation? Is the noble Lord aware that the trustees have said recently that they expect to receive a minimum of £250 million per annum for a number of years ahead? They have also said that there is a reserve fund of £4 billion from which these payments will be made. Given those facts, does not my noble friend agree that for the foreseeable future there is no possibility of a deficit arising in the fund, and that the time is now opportune for the Government to reduce their 50 per cent take? I remind my noble friend that most retired miners now receive only £38 a week pension.

Lord McIntosh of Haringey

My Lords, I confirm the figures that my noble friend Lord Sainsbury gave in February of this year. However, my noble friend Lord Dormand will recall that. Her Majesty's Government have paid £400 million to the trustees since 1995 for what is allowed to be used as related expenditure; that is, the surpluses have been allowed to be ring fenced and used to offset expenditure on liabilities inherited from British Coal, such as coal health liabilities, respiratory conditions, vibration, white finger and so on. My noble friend will also be aware of the £354 million which has been committed to coalfield areas over a period of three years since 1998.

Lord Ezra

My Lords, is the noble Lord aware that I tabled the Starred Question on 14th February to which the noble Lord, Lord Sainsbury, replied and to which the noble Lord, Lord Dormand, referred, and that I thought that I obtained a fairly sympathetic response to the fact that the Government—as the noble Lord, Lord Dormand, has pointed out—have obtained out of their share of the coal pension fund a vastly greater amount than was previously expected? In view of that, will the noble Lord, together with his noble friend, try to do something which has never been done before in history; namely, attempt to locate the heart of the Treasury, appeal to that organ, if they can find it, and make sure, as the noble Lord, Lord Dormand, also urged, that more of this money should be dedicated to benefit ex-mine workers in poor circumstances?

Lord McIntosh of Haringey

My Lords, I am as sympathetic to this matter as my noble friend Lord Sainsbury. I said in my first Answer that we are discussing with the trustees whether there are opportunities to build upon the guarantee arrangements to the mutual benefit of scheme members and government. The reduction in risk of the scheme, which I acknowledge and which was mentioned by the noble Lord, Lord Dormand, may make it possible, for example, for the trustees to adopt a more aggressive investment policy which would produce higher returns to the benefit of everyone.

Lord Marsh

My Lords, are provisions such as the Minister has outlined available to the other former nationalised industries' pension funds, and, if not, why not? I declare an interest.

Lord McIntosh of Haringey

My Lords, I believe that that is a general rather than a specific interest. I know that the noble Lord is a pensioner! The scheme which we are discussing today was set up under the Coal Industry Act 1994. Different arrangements arise from different privatisation legislation of the previous government.

Lord Eden of Winton

My Lords, has the Minister made any assessment of the numbers of former miners who might be claimants, which would give some indication to the House of the scale of the provision that might arise?

Lord McIntosh of Haringey

My Lords. I do not have an assessment of the number of miners, but certainly the trustees have made assessments of the cost of various options which might be open to them —for example, the cost which might arise if former miners were to be given pensions at the age of 50, or if coal board staff were to be given pensions at the age of 50. The former case would involve costs of the order of £1.4 billion. I understand that at the present time the trustees are not able to meet that cost. However, different ways of improving the pension provision would involve significant and varying costs.