Government gets £420m from miners pension scheme

More than £420m from a pension scheme for mineworkers has flowed into the government’s coffers in the past three years, the BBC can reveal.

The government is entitled to half the surplus cash from the scheme under an agreement signed 30 years ago.

Labour says the deal is unfair to former miners and their families.

Shadow minister Ed Miliband says Labour will review the agreement if it wins power to “deliver the justice to which miners are entitled”.

Tens of thousands of families, mainly in the East Midlands, Yorkshire and the North East of England, benefit from the pension scheme, which was taken over by the government when British Coal was privatised in 1994.

The agreement was struck between the then-Conservative government and the scheme’s trustees, in exchange for a government guarantee that the value of mineworkers’ pensions would not decrease.

A Department for Energy Security and Net Zero spokesperson said: “We remain committed to protecting the pensions of mineworkers, while striking a fair balance between scheme members and taxpayers.

“Mineworkers’ Pension Scheme members are receiving payments 33% higher than they would have been thanks to the government’s guarantee. On most occasions, the scheme has been in surplus, and scheme members have received bonuses in addition to their guaranteed pension.”

In April 2021 a cross-party committee of MPs said the government should stop taking money from the scheme and pay back some of what it had already received.

Ministers rejected those recommendations and data released to the BBC under Freedom of Information laws shows the government has received three annual payments of £142.4m since then.

While many schemes are overseen by the Pensions Regulator, the piece of law which led to this agreement means the government has sole responsibility.

Labour’s shadow energy security and net zero secretary Ed Miliband told the BBC there has been “deep unfairness and injustice” in the Conservative Party’s approach to the arrangement.

He said a Labour government would carry out a “comprehensive revision of the arrangements to make sure that miners get the fair share of the money to which they are entitled”.

Energy minister Graham Stuart said in December that the government had received £4.8bn from the pension scheme since 1994.

The business and trade select committee, which published the recommendations in April 2021, said the government should pay back £1.2bn of what it had previously received.

The committee said the government “failed to conduct due diligence” when it negotiated the arrangement, which it described as “not proportionate”.

It recommended that the government should stop taking funds out of the scheme unless it fell into deficit and public money was needed to shore it up.

At the time. the committee said the changes it was recommending would give a £14 increase to the average weekly pension of £84.

Earlier this month, the BBC reported on claims that former coal-mining areas are falling further behind the rest of Britain.

Forty years after the 1984 miners’ strike, a survey commissioned by the BBC suggested almost three quarters of people living in former mining towns and villages felt they had seen little or no progress in government efforts to reduce regional inequalities.