The Government should also relinquish its entitlement to the Investment Reserve, and transfer the £1.2bn fund to miners, to provide an immediate cash uplift to former miners.
The Mineworkers’ Pension Scheme report finds that, given the strong financial performance of the Mineworkers’ Pension Scheme, and the “vast sums” which have been paid to the Government, it is “unconscionable” that many of the Scheme's beneficiaries are struggling to make ends meet.
The Committee’s report examines the Scheme’s controversial 50:50 split surplus sharing arrangement and notes that “allowing the arrangement to continue would appear antithetical to the Government's stated aim of redressing socio-economic inequality and 'levelling up' left-behind communities”.
The arrangement was agreed in 1994 in return for a Government guarantee that the value of pensions would never decrease.
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 - at least £6.3bn in total. The Government has not paid anything into the Scheme, and the Committee’s inquiry heard it is extremely unlikely that it ever will.
Chair's comments
Darren Jones, Chair of the Business, Energy and Industrial Strategy 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 Mineworkers’ Pension Scheme 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 and delivering an immediate uplift through the return of the £1.2bn investment reserve.”
The report calls on the Government to acknowledge that continuation of the arrangements in their current form deserves a review and a better outcome for pensions should be found. The Committee’s report recommends that the current surplus sharing arrangements should end that in future the Government should only be entitled to a share of surpluses if it has to put any money into the Scheme (and, even then, only up to the value of the money it has put in).
To bring more immediate redress to pensioners, the report calls on the Government to relinquish its entitlement to the £1.2bn Investment Reserve, and instead give it to the miners. For the average pensioner receiving £84 per week, this would mean an additional £14 per week.