Pensions rise call for former miners
Thousands of former miners in the North East could see their pensions rise – if the Government tackles an "historic injustice" in the pension scheme.
MPs are urging the Government to transfer £1.2bn to the pension find, which could lead to a £14 increase to the average weekly pension of £84.
The Business, Energy and Industrial Strategy Committee said that, 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 would not decrease.
At the time it was expected that the Government would receive around £4bn from the arrangement in today's money, but that has increased to £4.4bn, and it is also due to receive at least another £1.9bn on top of 50% off any future surpluses, said the report.
The committee’s report says: "The Government's entitlement to 50% of surpluses is not proportionate to the degree of financial risk it actually faces."
Committee chairman Darren Jones 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 and, while the Government's guarantee to the fund has provided vital security to Mineworkers' Pension Scheme members, it's clear that it has profited to a far greater extent than originally envisaged.
"That now needs to change.”
He added: "The Government should act quickly on our recommendations by agreeing to hand back more of future surpluses to pensioners and return £1.2bn to the investment reserve."
The call has been welcomed by the National Union of Mineworkers.
NUM general secretary, Chris Kitchen, said: “The NUM welcomes the BEIS Report and supports the implementation of the recommendations as soon as possible.
“It is clear from the findings that the current arrangements are not fair. The Government has received more than was ever expected at the inception of the guarantee, and therefore should forgo any claim to the Investment Reserve Fund.”
He added: “We urge the Government to accept the recommendations. Mineworkers who paid money into the scheme should be the ones that benefit, not Governments that have never put a penny in.”