Government delivers 'slap in the face' over mineworkers' pensions scheme, campaigners say

The Government has been accused of delivering a “slap in the face” to members of the pension scheme for mineworkers after rejecting calls by MPs to make reforms.

Monday, 5th July 2021, 8:50 am
Updated Monday, 5th July 2021, 8:52 am
The Government has been accused of delivering a “slap in the face” to members of the pension scheme for mineworkers
The Government has been accused of delivering a “slap in the face” to members of the pension scheme for mineworkers

The Business, Energy and Industrial Strategy Committee had urged ministers to tackle a “historic injustice” in the scheme, and transfer £1.2 billion to the fund.

The move would have given a £14 increase to the average weekly pension of £84, according to MPs.

The committee published the Government’s response, which rejected recommendations the MPs said would have delivered a better outcome for pensioners.

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Darren Jones, who chairs the committee, said: “Members of the Mineworkers’ Pension Scheme will be deeply disappointed at the intransigent message of the Government’s response to our report.

“It represents a slap in the face for pension scheme members that the Government is continuing its ‘take it or leave it’ approach on arrangements around the Government guarantee.

“The Government has benefited from billions of pounds of surpluses since 1994 without having to contribute a pound of taxpayers’ money to miners’ pensions.

“The Government says it is willing to listen, but they reject any meaningful negotiation on the guarantee or any review of the terms of the 50:50 split.

“The tone of the Government’s response suggests they do not understand the reality of the historic injustice felt by thousands of retired miners.

“Ministers should think again and help ensure these pensioners get a fair deal.

“I will be meeting with the pension scheme trustees in due course to discuss the Government’s response and my committee will then agree how best to take this matter further.”

The committee said in its report earlier this year that given the “vast sums” paid from the scheme to the Government, it was “unconscionable” that many former miners were struggling to make ends meet.

Since privatisation of the scheme in 1994, the Government has received 50% of surpluses in its value, in return for providing a guarantee that the value of pensions will not decrease, said the MPs.

At the time it was expected that the Government would receive around £4 billion from the arrangement in today’s money, but that has increased to £4.4 billion, and the Government is also due to receive at least another £1.9 billion on top of 50% off any future surpluses, said their report.

Ed Miliband, shadow business secretary, said: “This is an appalling response from the Government. Rather than act to right an historic wrong, they have doubled down on an unjust arrangement that will see more than a billion pounds extra taken from retired miners’ pensions by the Chancellor.

“Boris Johnson personally promised during the election campaign to tackle this injustice, and has broken that promise today.”

A Government spokesman said: “Mineworkers’ Pension Scheme members are receiving payments 33% higher than they would have been thanks to the Government’s guarantee. On most occasions, the scheme has been in surplus, and scheme members have received bonuses in addition to their guaranteed pension.

“We remain resolutely committed to protecting the pensions of mineworkers.”

Chris Kitchen, general secretary of the National Union of Mineworkers, said: “The findings from both of our independent reports, along with BEIS, make it clear that the distribution of surplus funds – not including the Investment Reserve – should be reviewed on the grounds of ethics and fairness.

“The Government talks about levelling up but is content with taking funds from retired miners without ever having contributed a penny.”

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