MP accuses UK Governmentover miners’ pensions
CAMPAIGNING MP Ann Clwyd has launched a scathing attack on the UK Government, accusing it of robbing the Mineworkers’ Pension Scheme of millions of pounds.
Ms Clwyd, the veteran Labour MP for the former coalfield seat of Cynon Valley, said the “blatant unfairness” of the Government’s use of the scheme’s surplus should be addressed as a matter of urgency.
She said: “Earlier this year the National Union of Mineworkers asked for an urgent meeting with the Government to discuss the way in which the surplus to the pension fund is shared. Inexplicably the request was refused.”
When the pension fund was included in the Privatisation of the Coal Industry Act in 1994, it was agreed that the Government would act as guarantor, in return for the £460m remaining in the investment reserve fund to be paid by 2019.
That meant, said Ms Clwyd, that if the fund ever had a shortfall, the Government would step in to make up any difference. In return, the Treasury would take a 50% share of any future surplus.
Ms Clwyd said the amount of profit made by the Government from this arrangement underlined why a review was needed.
A Written Parliamentary Answer revealed that an analysis of the fund by the pension actuaries Binder Hamlyn estimated that the Treasury received far more than the estimated £2bn from the surplus in 2006 and £8bn in 2007.
Ms Clwyd said: “The way in which any surplus to the fund is shared must be put on a more equitable basis.
“We have heard so much about the way British Home Stores pensioners were treated and that was bad enough. But the deal with the miners is equally iniquitous.
“What makes it worse is that it was a Conservative government that put these former miners onto the scrapheap from the industry which ruined their health in the first place.”
Information from the House of Commons Library has revealed that the scheme has only been in deficit three times since 1996. Every other year saw the scheme in surplus.
Ms Clwyd said: “It is now time to ask: ‘ Why should the Treasury benefit to such an extent?’ Any surplus to these schemes should be of advantage of the pensioners, their families or their local communities.
“If the Minister still refuses to discuss the issue, the matter should be referred to the House of Commons Public Ac- counts Committee when the House returns in 2017 after the Christmas recess.”
A Treasury spokesman said: “The Government has provided a long-standing solvency guarantee to the Mineworkers’ Pension Scheme which benefits former miners and represents fair and reasonable recompense for taxpayers’ past investment.
“Members of the Mineworker’s Pension Scheme receive pensions approximately 30% larger than they would have without the guarantee, and the ba- sic pension will continue to rise with inflation.”
The net present value of the scheme to the Government has been estimated at £2bn over 25 years.
The Treasury pointed out that the figure of £8bn quoted in the story was from 2007, and was a gross estimate based on the value of payments to the Government from both the Mineworkers’ Pension Scheme and the British Coal Staff Superannuation Scheme in the 25 years to 2019.
Between them the two schemes have 430,000 members in total and taken together they represent the second largest funded pension scheme in the UK.
At privatisation of the British Coal Corporation in 1994, both schemes were closed to new members and new contributions, and they and their assets were separated from the corporation as stand-alone trusts.
Since then all changes to the scheme rules have been made by the UK Government, after consultation with the committee of management.
“We have heard so much about the way British Home Stores pensioners were treated and that was bad enough. But the deal with the miners is equally iniquitous”