Billions of pounds taken from Mineworkers’ Pension Scheme ‘should be given back’
Billions of pounds taken out of the Mineworkers’ Pension Scheme (MPS) by the government leaving retired miners and their widows short of funds should be given back, said the Business, Energy and Industrial Strategy (BEIS) Committee in a report published today.
Billions of pounds taken out of the Mineworkers’ Pension Scheme (MPS) by the government leaving retired miners and their widows short of funds should be given back, says the Business, Energy and Industrial Strategy (BEIS) Committee in a report published today.
Ken Capstick, aged 80, who was Yorkshire vice-president of the National Union of Mineworkers and started work in the mines at the age of 15, has been a trustee of the MPS for the past five years.
He, along with a number of Labour MPs, other trustees and NUM officials were involved in an evidence gathering inquiry into the handling of the pension scheme.
In 1994 when the industry was privatised, the Conservative government agreed to guarantee the pension scheme at no cost but would take 50 per cent of the surplus.
Mr Capstick said: “The MPS trustees in 1994 felt they had no option but to accept the government’s terms for guaranteeing the scheme.
“I believe that the government taking a 50:50 split of all surpluses directly from the funds of the MPS was unlawful and flew in the face of pensions’ legislation.
“The MPS has been a bonanza for the government for 27 years”.
“The report notes that, to date, the government has received £4.4bn in cash payments from the scheme and is due to receive at least a further £1.9bn.
Darren Jones chair of the BEIS committee, said: “The government has benefited from billions of pounds of surpluses since 1994 without having to contribute a pound of taxpayers’ money to miners’ pensions.
“Mining communities have suffered from pit closures for generations, with many pensioners now living on low incomes.
“Whilst the government’s guarantee to the pension fund has provided vital security to MPS members, it’s clear that the government has profited to a far greater extent than originally envisaged. That now needs to change.
“The government should now act quickly on our recommendations by agreeing to hand back more of future surpluses to pensioners.”
The committee also called for an immediate return of £1.2bn known as the investment reserve.
NUM general secretary Chris Kitchen said: “The NUM welcome the BEIS report and support the implementation of the recommendations as soon as possible.
“It is clear from the Cross Party committee report that the current arrangements in respect of the 50:50 surplus sharing arrangement are not fair, if they ever were.
“The government has so far received more than was expected at the inception of the guarantee and therefore forgoing any claim to the investment reserve fund. Allowing it to be used by the trustees to immediately increase pensions will cost them nothing.
“There has been a growing view that the guarantee was nothing more than a vendetta against the miners, a view that has strengthened as time has gone by and the unfairness has become more apparent.
“We urge the government to accept the recommendations and allow the MPS Trustees to redress the unfair imbalance.
“Mineworkers who paid money into the scheme should be the ones that benefit from the scheme not a government that has never had to put a penny in.”
MP for Normanton, Pontefract, Castleford & Knottingley, Yvette Cooper, said: “This report is really important - it confirms what we’ve been saying here in coalfield communities for years - retired miners and their families are not getting a fair deal and the rules need to urgently change.
“Ministers need to listen and the Government needs to stop siphoning off billions from the Mineworkers Pension Scheme.
“This cross party Parliamentary report adds to the mountain of evidence which shows that the scheme is unfair and action is needed. Our industrial heritage lies at the heart of our towns and the Government needs to do right by those who did so much for our country for so long.”
Jon Trickett MP for Hemsworth said: “I cautiously welcome the recognition that miners’ families deserve more.
“I am encouraged by the recommendation to uplift pensions now with a further chance of uplift soon. However, the government must now implement these recommendations and go even further.
“The pension pot is in surplus and sitting on assets of £12bn. Every penny of this belongs to the miners.
“Miners’ families rely on these pensions for financial security. The government should hand back the 50% they are pocketing for themselves.
“The Secretary of State must immediately explain how the government will right this historic wrong.”