HC Deb 02 December 1993 vol 233 cc735-7W
Mr. Booth

To ask the President of the Board of Trade if he will make a statement on the legislation governing rights of access to coal and other minerals in the light of the privatisation of the coal industry.

Mr. Eggar

At present, under the Opencast Coal Act 1958, British Coal has access to special procedures governing the compulsory acquisition of rights to explore for and work opencast coal, and related matters. These procedures are not available to other mineral industries. The Government do not regard it as satisfactory in the longer term for the coal industry to have access to special procedures which are not generally available. However, a period of transition is needed before an alternative regime is put in place.

Under the Coal Industry Bill published today, the provisions of the Opencast Coal Act 1958 will continue to be available to coal operators, within a modified framework offering improved safeguards for the interests of landowners, up to 31 December 1999 but not thereafter. After the end of this transitional period, the Government intend that the procedures for opencast coal should be unified with the general regime for all minerals contained in the Mines (Working Facilities and Support) Act 1966 and 1974.

My Department will therefore be conducting a review of the general provisions contained in the Mines (Working Facilities and Support) Acts to determine what amendment, revision or reform to the legislation is appropriate to provide an integrated regime for the next century. The review will have regard to the need to exploit the country's mineral resources including coal, to the perception that current procedures under the Mines (Working Facilities and Support) Acts are expensive and time consuming, and to the need to protect the rights of land owners.

Following initial consideration of the issues, I intend to publish a consultative document in due course. I invite those interested in submitting representations or evidence for the preparation of the consultative document to write to me by 31 January 1994.

Mr. Duncan Smith

To ask the President of the Board of Trade if he will announce the Government's proposals for British Coal pensions after privatisation.

Mr. Eggar

In September the Government published a consultation paper on proposals for British Coal pensions after privatisation. Comments have been received from the trustees of British Coal pension schemes, from the corporation, from industry unions and from over one thousand individuals.

Careful consideration has been given to all responses to the consultation paper. In the light of these responses, and taking full account of the recent recommendations of the Pension Law Review Committee, the Government have decided that:

Existing schemes (i) all pensioners and deferred pensioners of the mineworkers pension scheme (MPS) and British Coal staff superannuation scheme (SSS) and all currently contributing members would be able to leave their past-service entitlements in the schemes at privatisation, if they so choose; (ii) the MPS and SSS would be closed to new members at privatisation and the new private-sector owners of the industry would not participate in them; (iii) the Coal Industry Bill would provide for both the MPS and SSS to be given a Government solvency guarantee that would ensure that pensions and deferred pensions are increased after privatisation in line with the retail price index (RPI) by reference to their level at privatisation; (iv) beneficiaries would in addition be able to benefit from any fund surpluses through pension payment increases over and above RPI levels, but surpluses, and benefits from them, will not be subject to guarantee from the taxpayer; (v) provision would be made for the beneficiaries and the Government, as guarantor, to receive equal shares of any distributable surplus; (vi) in order to assist the management of the funds any share of surplus payable to the Government would only be receivable in equal installments over a 10-year period; (vii) deficiency payments due under the guarantee would also be payable over 10 years; (viii) existing obligations on British Coal to make 'additional contributions' in respect of early and enhanced pensions would be honoured in full by the Government; (ix) there would be triennial valuations of the schemes, as at present, and if a valuation subsequent to a deficiency reveals a surplus, or vice versa, there should be an immediate settling of balances before further payments by or to Government are determined (including a safeguard to ensure that beneficiaries and Government have received equal shares of any unsustained surplus distribution); (x) the Coal Industry Bill would provide for the rules of the MPS and SSS to be modified in order to give effect to the necessary changes; (xi) the Bill would also safeguard the interests of the taxpayer, as ultimate guarantor, by providing for the Government to be able to secure that the trustees of the MPS and SSS have proper regard to the interest of the taxpayer in performing their fiduciary duties (the precise details of how this safeguard would operate in practice are still under discussion with the trustees and the Corporation and will be contained in Regulations and scheme documents which are yet to be published);

New industry-wide schemes (xii) new pension schemes would be created for employees of British Coal and its subsidiaries who are transferred to employment in successor companies; (xiii) the new schemes would follow on, separately, from the MPS and SSS and would be required by statutory regulations to provide the same package of benefits as the corresponding existing scheme; (xiv) the Coal Industry Bill would provide protected person status for employees transferred to the new schemes and the schemes would contain measures regarding their maintenance, membership, use of surpluses and any eventual winding up; (xv) the new schemes would operate on an industry-wide basis and the Coal Industry Bill would provide for all new employers of protected employees to participate in the schemes; (xvi) continuing employees would be able to transfer their past-service entitlements to the new schemes if they so choose or they would alternatively be able to transfer them to another scheme operated by their new employer, depending on its terms, or to a personal pension scheme; (xvii) the Coal Industry Bill would provide for the new Coal Authority to make pension provision for its employees, including any transferred from British Coal.

The Government believe that these proposals meet in full its commitment to protect MPS and SSS pensions. The proposals will provide security for pension entitlements earned from service with British Coal and will provide protection for pension entitlements from future service with successor companies. The Coal Industry Bill would provide the necessary statutory underpinning for all the safeguards proposed.

It is intended that drafts of the regulations giving statutory effect to the details of the new arrangements would be made available during Commons consideration of the Bill.

The consultation paper on British Coal pensions listed in an appendix a number of other pension schemes with which British Coal is involved. The Government will be assuming responsibility for the six unfunded pension arrangements listed in the appendix. From discussions with trustees and scheme representatives it appears that pension entitlements from all of the funded pension schemes listed in the appendix can be adequately safeguarded without direct Government involvement through guarantees or statutory protection. The Government are nevertheless taking a close interest in the future arrangements that are being proposed and will report to Parliament on them in due course.