Worksop miners given 'take it or leave it' pensions deal by the Government, inquiry is told

The Government has taken around £4.4bn out of the Mineworkers’ Pension Scheme without ever putting in a single penny, leaving many seriously out of pocket, a Parliamentary inquiry has heard.

By Andy Done-Johnson
Wednesday, 24th March 2021, 7:00 am

At a meeting of the Business, Energy and Industrial Strategy Committee, witnesses told MPs that when the pension fund was set up in 1994, following the privatisation of the mining industry in the UK, the Government forced miners into a 50/50 split in surplus sharing arrangements.

Campaigners say that thousands of miners from around Worksop have been left massively out of pocket after the ‘take it or leave it’ deal - with the Government due to take a further £1.9bn if the matter is not addressed, 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 miners are paid as little as £18 per week, many having paid into the pension pot for years.

Former mineworkers outside Downing Street in 2019 after handing in a 100,000-strong petition calling for a fairer pension deal

Responding to questions put by Mansfield MP Ben Bradley, who joined the meeting as a guest, Chris Kitchen from the NUM said that the situation was unique in its terms, with other pension pots for other previously nationalised industries being more beneficial to members.

“This is a unique situation as to how this scheme was guaranteed, and this is a good time for the Government to accept that they’ve had enough money out of it,” he said.

He said that, on average, the Mineworkers’ Pension Scheme lost around 7,000 members per year and that the Government would be the long-term winner when all the scheme members had died.

The hearing heard that, while the Government had benefited to the tune of more that £8bn – when they had initially stated that they would need to withdraw no more than £2bn to ensure the scheme’s future – former mineworkers had not seen returns of 400 per cent on their pensions.

The former Thoresby Colliery in Nottinghamshire

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The £8bn figure comes from the Mineworkers’ Pension Scheme and another pension pot set up for former Coal Board office workers, which campaigners say has also been raided.

“This has been a better deal for Government than for members, which is the wrong way round,” Mr Kitchen added.

Representatives from the trustees of the Mineworkers’ Pension Scheme said that the 50/50 split had been forced on members as a ‘political decision’ back in 1987, “’when the decision to privatise the coal industry had already been taken from behind closed doors’.

Mineworkers' pensions campaigner Mick Newton.

Chairman of trustees, Chris Cheetham, said they had initially pushed for a 70/30 split in favour of members, but that they ‘were left with no choice but to accept the 50/50 split’.

“This is a unique arrangement in the pensions industry,” he said. “There’s no other situation where sponsors take money out of the scheme - regulations don’t allow it.”

For years, campaigners have called for a fairer deal for former mineworkers in Mansfield and Ashfield, as well as around the UK, in terms of pension.

Campaigners claim former miners and their families have been robbed of billions by a string of governments, and are calling for a farer share of the pension pot.

Campaigners meeting Ed Miliband MP in Parliament.

When miners and their families signed up to the pension scheme in 1994, they were told by the government that ‘no more than £2 billion’ was needed from the pot to guarantee its future.

But campaigners have hit out at successive governments after an accepted figure of more than £4.5 billion was taken from the pot over the last 25 years - meaning some miners and their families were not receiving ample funds for their investment.

The inquiry was launched after around 50 MPs wrote letters of concern to committee chairman Darren Jones MP.

In 2019, a 100,000-strong petition was also handed in to Downing Street, calling for a fairer deal by campaigners.

Speaking prior to the inquiry, which was held remotely, Mr Jones said: “A series of concerns have been raised, by MPs from across the House of Commons and over many years, in relation to the Mineworkers’ Pension Scheme.

“One of the main issues is the fact the Government has benefitted from the 50:50 surplus sharing arrangements to the tune of billions of pounds and yet has not made a single financial contribution as the Scheme’s guarantor.

“In our short inquiry we will examine the background to the surplus-sharing arrangements, the Government's role in the scheme, and whether it is fair that the Government continues to receive 50 per cent of any surplus in the scheme.

“This is an issue of considerable importance to many former miners and to their local communities, who rightly want the pension scheme to properly recognise the hard work and sacrifices made by miners during their working lives.”

Mick Newton, former Thoresby Colliery miner and trustee of the Miners’ Pension Scheme representing Nottinghamshire, said that if former mine workers were given their fare share of the money, it would bring prosperity back into many struggling communities and, of the 400,000 who initially agreed the scheme in 1994, just 150,000 are still living.

Speaking after the inquiry, he said: "I would like to thank all concerned who have pushed for the inquiry into mineworkers’ pensions. This is giant leap forward. The evidence submitted leaves us in no doubt how mineworkers and widows have been dramatically shortchanged over the last 30 years.

“We look forward to the outcome of this inquiry in the hope that our pensioners will see some major improvements to their pensions"

The inquiry will reconvene next month when ministers are expected to give evidence.

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