Worksop miners may need to give up Government guarantee if they want a fairer share of controversial pension pot

Former mineworkers may have to give up the guarantee on their pensions if they want more of the pot from their Government-backed scheme, a Parliamentary inquiry has been told.

Friday, 23rd April 2021, 3:33 pm

Speaking at a follow-up meeting of the Business, Energy and Industrial Strategy Committee, 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.

Anne-Marie Trevelyan MP, Minister for Business, Energy and Clean Growth

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At the previous meeting, 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 from the ‘take it or leave it’ deal - with the Government having already pocketed £4.4bn and 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 mineworkers are paid as little as £18 per week, many having paid into the pension pot for years.

Former mineworkers campaigning outside Downing Street for a fairer deal on pensions

The March 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 £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.

But speaking at the follow-up meeting, the Minister told MPs: “The Government took on British Coal’s liabilities, including pensions, and the Government recommended that future surpluses be shared equally between the scheme’s members and the Government.

“Anyone at the time recognised the value of the guarantee, because like any pension scheme, it has a very long-term outlook, and providing stability to ensure pension payments will always be able to be paid is a central part of the trustees responsibilities.

“I think the trustees would still make the same choice today to ensure their members’ pensions will always be secure.

“We can never assume that everything will keep going in a straight and upward line, and if they would like to lose the guarantee, rather than benefit from a share of the surplus in the good times, my door is always open for discussions.

“There are 150,000 members of this scheme, and that’s a lot of people who want to have a guaranteed pension, but they are very welcome to talk to us about how things move forward in the future.

“The reserves are there so the cash is there if ever there is a need in the future.”

Committee chairman Darren Jones MP said: “In the last election, the Prime Minister made a categorical pledge that mineworkers would get a fair share of the scheme. It is on the record that they feel the arrangement is unfair.”

He also said that the committee would be facilitating any future discussions future discussions between the Government and the Trustees of the Mineworkers’ Pension Scheme.

Following the hearings, a report will be generated making formal recommendations on how matters proceed.

Mick Newton, who represents former mineworkers in Nottinghamshire, said that the committee’s intervention would prevent the Government from ‘kicking it into the long grass again’, and that he was confident it would side against the Government.

He said: “Our position is that we want that guarantee to stay in place, and that we have already paid for that guarantee twice over. It’s like if you take out a 25-year mortgage and at the end of it the bank come back and say you’ve got to pay another 25 years, or the bank still owns the house at the end.

"In the end, the Government will still own all of the assets from the scheme, so it’s a win-win for them.

"The background to this is that the Secretary of State was meant to be giving evidence, but he pulled out and put his junior minister in. I think he wanted to test the water in terms of strength of feeling, and didn’t want to get backed into a corner at this stage. There seems to be a strong sense of feeling with members of that committee that there has been an injustice.

“It was also a hugely positive step that Darren Jones said that the committee would be facilitating any future discussions, because it means that the Government can’t go off and kick it into the long grass.

"The Minister kept saying that the Trustees were happy with the 50/50 arrangement, and the chair kept coming back saying ‘no they’re not’.

"I’m sure that what the Minister wanted was to have more discussions behind the scenes and for us to get nothing at the end of it.

"The deal was unlawful when it was established in 1994 and it still is – it is unlawful in the way it was struck and it is unlawful what they subsequently did with it.”

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