Mineworkers’ Pension Scheme – redressing the balance

I have joined with MPs on a cross-party basis calling on the UK Government to redress the balance within the Mineworkers’ Pension Scheme. When the scheme was first established it was decided that any yield from the scheme would be split 50/50 between mineworkers and the UK Government.

When British Coal was privatised in 1994, an arrangement was made between the then Government and the trustees of the British Coal pension schemes – the Mineworkers Pension Scheme (MPS) and the British Coal Staff Superannuation Scheme (BCSS) – on their future arrangements.

It was agreed that:

• The existing schemes would be closed to further contributions
• The Government would take over the role as Guarantor for the Scheme from British Coal.
• 50% of the surplus in the scheme would be used to enhance members’ pensions immediately, with the other 50% being payable to the guarantor.
• The Guarantor agreed to leave its share of pre-privatisation surpluses in the Scheme as the Investment Reserve. This was to be paid to the Guarantor over a 25-year period to 2019.
• For scheme members, the Guarantee meant that they would always receive the benefits they had earned up to privatisation, increased in line with inflation. I.E. they would not see a fall in cash terms in their pension earned up to privatisation.

Since then the UK Government has not made any direct payments into the scheme.

It was discovered in November 2018 that the UK Government said they had received £4,328 million under the surplus sharing arrangements since 1994.

The cross-party letter to the UK Government called for an immediate review of the 50/50 split.

The Minister of State for Business and Energy, Kwasi Kwarteng MP, has provided a response that has pledged to recommend the proposals to the Treasury for the next Budget.

The Mineworkers’ Pension Scheme shouldn’t be a cash cow for the UK Government. Its profits should be given back to pension holders so they can enjoy a decent quality of life in their retirement. I joined with a number of MPs who represent ex-mining towns and villages to press for this much needed change to the surplus rules. We need fairness back in the system now.

I am pleased with the minister’s response, but we cannot take it for granted that just because the Business Department is recommending this that the Treasury will implement it. I will be watching closely at the next Budget to make sure the UK Government does the right thing by our mineworkers.

By implementing this change, it will see the standard of life for our retired mineworkers improve and see the amount of money going into our local communities in and around the old Point of Ayr colliery increase. Our ex-mining villages and towns deserve this more than the Treasury who are merely skimming the profits from the scheme.