MPs back call for review of deal which sees Government take billions from miners' pension fund
MPs have backed a call for a review of miners’ pension arrangements which has seen the Government take billions of pounds from the fund.
Doncaster MPs Ed Miliband and Caroline Flint, both representing former mining areas, were among those taking part in the debate, which backed the motion: “This House calls on the Government to carry out a review of the existing arrangements for the sharing of the surplus generated by the Mineworkers’ Pension Scheme.”
Currently, the Government takes half of any surplus earned by the Mineworkers' Pension Scheme from its investments as part of an agreement that also sees it guarantee the pensions. The Government has said pensions were approximately 30 per cent larger than they would have been otherwise.
But former miners are fighting to have the figure reduced and do not feel it it is appropriate to the risk that the Government faces by guaranteeing the pensions.
Mr Miliband told the debate: “I want to see justice for the retired miners in my constituency of Doncaster, North and, indeed, across Doncaster and the whole country. Miners worked their backs off for this country at great cost to themselves, often causing themselves ill health and a shortened life expectancy. Their families watched their loved ones risk their lives for this country, and the least we owe them is fairness and justice, which is what this debate is about.
“The average payment under the scheme is just £83.98 per week – around £4,000 a year – so we are talking about people for whom every pound will make a difference. It cannot be right that £4 billion – and counting – has gone to the Government and not to the miners. That does not seem fair or right, and I think that that is recognised across the House.”
Mr Miliband has been working on the issue with former Stainforth miner Les Moore, and the UK Miners Pension Scheme for Justice and Fair Play Association,
The 50-50 split was decided and announced in April 1994.
Mr Miliband said he had seen documents stating that miners received 70 per cent of the surplus in September 1993, before the current arrangement was in place, and wants ministers to publish the papers underlying the decision that was made in 1994.
The debate heard the Government had never had to put money into the scheme over the 25 years of the arrangement, and one report, commissioned by the National Union of Mineworkers, had suggested that a 90-10 split of future surpluses would be a fair return to the Government for the ‘relatively low’ level of risk taken in providing the guaranteewhich was not needed during the 2008 world financial crash.
Andrew Stephenson, parliamentary under-Secretary to the department for Business, Energy and Industrial Strategy, said the minister for Energy and Clean Growth has met the scheme’s trustees since a previous debate on the issue, and his predecessor had met campaigners and coalfield MPs. Officials have also met the scheme’s trustees.
He said: “I have reviewed the trustees’ proposals, which my officials have been considering for some time, and I wrote to Her Majesty’s Treasury last week giving them my full support. I will be meeting the chair of the trustees, Chris Cheetham, on 24 June. Central to the trustees’ proposals is protecting existing bonuses.
“Under that option, if there is a deficit in the future, members will still see their guaranteed pensions continue to rise in line with RPI, and their current bonuses will not be eroded. Without that additional guarantee, members may not be able to get any increase in payment, possibly for many years. The proposals put to my predecessor by the trustees offer benefits to all pensioners, who will see their pensions secured into the future, even if the scheme was to go into deficit, by protecting the bonuses that have accrued to date. The trustees, who include former miners, believe that that is an important way of protecting future revenues for scheme members in the event of a future scheme deficit, because bonuses accrued at past evaluations could be eroded.”
Doncaster’s last working colliery, Hatfield Colliery in Stainforth, closed in 2015.