Chancellor asked to respond to call for fairer pensions deal for former Worksop mineworkers
The chairman of a Parliamentary inquiry which ruled that successive Governments have raided billions of pounds from a pension fund for former mineworkers has written to the Chancellor of the Exchequer asking for a formal response this week.
Darren Jones MP, Chair of the Business, Energy and Industrial Strategy select committee wrote the letter to Rishi Sunak MP after members ruled that thousands of former mineworkers, and their widows, including from Bassetlaw, had been left on the breadline.
He has asked for a response by Thursday, May 6.
Governments have plundered a total of £4.4bn from the Mineworkers Pension Scheme, which was established in 1994 when the industry was privatised, after they imposed a controversial 50-50 split in surplus sharing arrangements for guaranteeing the fund - without ever putting in a penny.
Last week, the committee issued a report following an investigation, which called on a further £1.9bn set to go to Government coffers to be halted, and £1.2bn to be distributed to former miners to rectify the position immediately.
The report found that the Government’s actions directly contravened its commitment to ploughing more money into struggling former coalfield communities, many of which have been decimated by the collapse of the mining industry.
Nottinghamshire’s last pit, Thoresby Colliery, closed in 2015, and of the 400,000 former mineworkers who paid into the scheme 27 years ago, only 150,000 are still alive, the inquiry heard.
In real terms, many miners receive an average of £65 per week in pension, plus a £19 per week bonus, although 25 per cent are paid £30 per week – and 10 per cent of former mineworkers are paid as little as £18 per week, many having paid into the pension pot for years.
The committee formally ruled that the Government should review the surplus sharing arrangements in the Mineworkers’ Pension Scheme to ensure they are fair and deliver a better outcome for pensioners.
The Government should also relinquish its entitlement to the Investment Reserve, and transfer the £1.2bn fund to miners, to provide an immediate cash uplift to former miners, the report states.
The report found that, given the strong financial performance of the Mineworkers’ Pension Scheme, and the ‘vast sums which have been paid to the Government, it is ‘unconscionable’ that many of the scheme's beneficiaries are struggling to make ends meet.
In terms of the 50/50 split, It notes that ‘allowing the arrangement to continue would appear antithetical to the Government's stated aim of redressing socio-economic inequality and 'levelling up left-behind communities’.
In the letter, Mr Jones writes: “The vast majority of retirees live in former coalfield communities, which have never fully recovered from unemployment caused by the loss of heavy industries.
“The evidence we received suggests that the Government relinquishing its legal entitlement to the £1.2bn Investment Reserve fund, and instead distributing it to the scheme’s beneficiaries, would lead to a £14 weekly increase for those on the average pension.
“Given the already low income of the scheme’s members, you will appreciate the high value of each additional pound they receive.
“Owing to the age and low income of the beneficiaries, this is also money which is more likely to be spent rather than saved. This would stimulate economies in worse-off areas, by injecting additional disposable income.”