GOVERNMENT ministers have rejected proposals to supply an immediate £1.2bn cash boost to thousands of ex-miners involved in a controversial pension scheme - saying they believe arrangements are ‘fair and beneficial’.
The response to the Business, Energy and Industrial Strategy (BEIS) Select Committee inquiry into the Mineworkers’ Pension Scheme (MPS) has been called a ‘slap in the face’ to those who toiled down the pits and their families.
The inquiry and report were heavily critical of the government’s actions in claiming at least £4bn from a pension pot for former miners, many of whom live with long-term illness and disabilities.
Some, according to the inquiry held on March 23, survive on just £18 a week.
The report found that current arrangements, in place after an ‘arbitrary’ agreement between the government and pension trustees in 1994, disproportionately benefit the government.
Barnsley East MP Stephanie Peacock, who sparked the inquiry, said she ‘will not give up the fight’.
“Trustees, mineworkers and others gave detailed evidence and the committee’s suggestions were fair and reasonable,” she added. “The government has broken the promise they made to miners during the 2019 General Election and passed over the opportunity to level up places like Barnsley.
“This is yet another kick in the teeth to the miners from the Tories.”
The Chronicle is writing to chancellor Rishi Sunak on behalf of readers - many of whom will be ex-miners or relatives - to stress the need for urgent reconsideration. A petition, which can be found on the Chronicle’s website, has also reached around 4,500 signatures.
In 1994, upon the privatisation of British Coal’s operations, MPS contributions were closed and the government stepped in as guarantor - in return getting half of surpluses, used to improve benefits or offer contribution holidays to employers.
The scheme’s strong performance has since seen the government pocket £4.4bn - double initial projections - and anticipates a further £1.9bn, despite not contributing financially.
The BEIS Select Committee report said the government ‘failed to conduct due diligence’ in undertaking the 50-50 split, and not accurately forecasting how much it could receive.
It recommended that the £1.2bn ‘Investment Reserve’ - a fund left by British Coal to be called on in the event of a deficit - be given to ex-miners, equating to a £14-a-week uplift.
It also proposed the government only be entitled to shares of surpluses if it has to pay to counter a deficit, and only to make its money back, given the ‘relatively low degree of risk’ attached.
The government dismissed the select committee’s finding that it has ‘benefited unduly’ from the arrangements and said concerns have only come about due to the scheme’s success.
“We note that if the trustees did not think the 50-50 offer was a reasonable one, they could have declined the offer of the guarantee at that time,” said ministers. “Without the government guarantee, scheme members would have access to all surpluses.
“However, there are numerous examples of pension schemes that have been unable to meet their basic obligations, let alone increase pensions to the extent the MPS has under the current arrangements. The government continues to believe that the arrangement agreed in 1994 was fair and beneficial to both scheme members and taxpayers.”
National Union of Mineworkers general secretary Chris Kitchen said: “The government talks about levelling up but is content with taking funds from retired miners without ever having contributed a penny. The government’s response to the BEIS Select Committee report is a slap in the face to every MPS member and widow.
“Their refusal to do anything other than threaten the trustees again with the option to go it alone without a guarantee shows utter contempt for MPS pensioners, widows and the BEIS Select Committee.”
Wentworth and Dearne MP John Healey called the response ‘appalling’, adding: “They have ignored the evidence presented by the committee and been completely closed to any argument for change in favour of miners - as I have found when I’ve approached ministers directly over the last few years.”