Derbyshire mineworkers given 'take it or leave it' pensions deal by the Government, inquiry is told
The Government has taken around £4.4bn out of the Mineworkers’ Pension Scheme without ever putting in a single penny, leaving many seriously out of pocket – a Parliamentary inquiry has heard.
At a meeting of the Business, Energy and Industrial Strategy Committee, witnesses told MPs that when the pension fund was set up in 1994, following the privatisation of the mining industry in the UK, the Government forced miners into a 50/50 split in surplus sharing arrangements.
Campaigners say that thousands of miners from around Derbyshire have been left massively out of pocket after the ‘take it or leave it’ deal - with the Government due to take a further £1.9bn if the matter is not addressed, the inquiry heard.
In real terms, many miners receive an average of £65 per week in pension, plus a £19 per week bonus, although 25 per cent are paid £30 per week – and 10 per cent of former miners are paid as little as £18 per week, many having paid into the pension pot for years.
Chris Kitchen from the NUM said that the situation was unique in its terms, with other pension pots for other previously nationalised industries being more beneficial to members.
“This is a unique situation as to how this scheme was guaranteed, and this is a good time for the Government to accept that they’ve had enough money out of it,” he said.
He said that, on average, the Mineworkers’ Pension Scheme lost around 7,000 members per year and that the Government would be the long-term winner when all the scheme members had died.
The hearing heard that, while the Government had benefited to the tune of more that £8bn – when they had initially stated that they would need to withdraw no more than £2bn to ensure the scheme’s future – former mineworkers had not seen returns of 400 per cent on their pensions.
The £8bn figure comes from the Mineworkers’ Pension Scheme and another pension pot set up for former Coal Board office workers, which campaigners say has also been raided.
“This has been a better deal for Government than for members, which is the wrong way round,” Mr Kitchen added.
Representatives from the trustees of the Mineworkers’ Pension Scheme said that the 50/50 split had been forced on members as a ‘political decision’ back in 1987, “’when the decision to privatise the coal industry had already been taken from behind closed doors’.
Chair of trustees, Chris Cheetham, said they had initially pushed for a 70/30 split in favour of members, but that they ‘were left with no choice but to accept the 50/50 split’.
“This is a unique arrangement in the pensions industry,” he said. “There’s no other situation where sponsors take money out of the scheme - regulations don’t allow it.”
Campaigners claim former miners and their families have been robbed of billions by a string of governments, and are calling for a farer share of the pension pot.
In 2019, a 100,000-strong petition was also handed in to Downing Street, calling for a fairer deal by campaigners.
The inquiry will reconvene next month when ministers are expected to give evidence.