Victory for former mineworkers after inquiry rules that Government plundered pension pot for years
Former mineworkers from around Worksop are hailing victory today after a Parliamentary inquiry ruled that the Government had unfairly plundered their controversial pension scheme for years – leaving many on the breadline.
Campaigners say thousands of miners from around Nottinghamshire have been left massively out of pocket from the ‘take it or leave it’ deal – with the Government having already pocketed £4.4bn.
They were due to take a further £1.9bn if the matter had not been addressed, but the report from the Business, Energy and Industrial Strategy Committee is calling on the Government to end the ‘historic outrage’ by handing over an initial £1.2bn to former mineworkers.
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 deal was struck in 1994 when the Government effectively demanded a 50/50 split in surplus sharing arrangements – investment profit made by the trustees of the scheme – without ever contributing a penny.
However, the split was to ensure the Government would guarantee the scheme so it never decreased in value, but campaigners say they objected to the deal at the time and were left with no choice other than to accept it.
The report comes after an ongoing investigation by the committee into the arrangements of the Mineworkers’ Pension Scheme, which saw trustees giving evidence in March.
Then, speaking at a follow-up meeting earlier this month, Minister of State for Business, Energy and Clean Growth Anne-Marie Trevelyan MP invited Trustees of the Mineworkers’ Pension Scheme for further talks on the future of the scheme.
The inquiry, which resumed from an earlier sitting in March, heard that as time passes and the number of beneficiaries decreases there becomes less risk of the scheme requiring a Government bail-out.
But the Minister stuck to her guns and said that the 50/50 split that was agreed with British Coal needed to stand in case things go wrong in the future.
Chairman Darren Jones MP said that any future talks would be facilitated by the Government, which campaigners said would prevent ministers from ‘kicking the issue into the long grass’.
The committee has now 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 'evelling up left-behind communities’.
Commenting on the report's findings, Mr Jones said: “The Government has benefited from billions of pounds of surpluses since 1994 without having to contribute a pound of taxpayers’ money to miners’ pensions.
“Mining communities have suffered from pit closures for generations, with many pensioners now living on low incomes.
“Whilst the Government’s guarantee to the pension fund has provided vital security to Mineworkers’ Pension Scheme members, it’s clear that the Government has profited to a far greater extent than originally envisaged. That now needs to change.
“The Government should now act quickly on our recommendations by agreeing to hand back more of future surpluses to pensioners and delivering an immediate uplift through the return of the £1.2bn investment reserve.”
The report calls on the Government to acknowledge that continuation of the arrangements in their current form deserves a review and that a better outcome for pensions should be found.
It recommends that the current surplus sharing arrangements should end and that in future the Government should only be entitled to a share of surpluses if it has to put any money into the scheme and, even then, only up to the value of the money it has put in.
To bring more immediate redress to pensioners, the report calls on the Government to relinquish its entitlement to the £1.2bn Investment Reserve, and instead give it to the miners.
For the average pensioner receiving £84 per week, this would mean an additional £14 per week.
Commenting on the report’s findings, campaigner Mick Newton, who represents former mineworkers in Nottinghamshire and elsewhere in the East Midlands, said: “This is a massive step forwards and I’m delighted that the report reflects the feelings of former mineworkers and their widows.
“It’s a very strong report and it’s very strongly worded, and let’s hope that the Government will pick it up and implement the proposals. The case for former mineworkers is overwhelming.
“Every week, between 150 and 200 former miners die - a lot of them from industrial illnesses and respiratory diseases, and we want to see as many former mineworkers as possible see improvements to their pensions while they are still alive.
“In 1994, when the Government forced us into accepting their conditions, there were 400,000 former mineworkers alive in this country. There are now 150,000 - that’s 250,000 who have not seen this justice, and we’ve lost those people.
“The report offers a real solution to members’ pensions, and to address the injustices that have taken place over the past 27 years.
“Not only will this boost the bank balances of former mineworkers and their widows, but it will also help to regenerate our local communities, because most of these people will spend their extra money in local shops.”