Describing it as “historic injustice reversed”, the Government has responded to a long-standing campaign to transfer £1.5bn from a miners’ pension scheme to ex-pit workers.
More than 100,000 former mineworkers will receive a share of the money that was kept from their pensions since the privatisation of British Coal in 1994.
Following the announcement in yesterday’s Budget, Energy Secretary Ed Miliband confirmed that the move will mean a 32% boost to the annual pensions of 112,000 former mineworkers – an average increase of £29 per week for each member.
The investment reserve fund was set up using profits from the scheme in 1992, to provide a buffer in case the Mineworkers’ Pension Scheme went into deficit. This money was due to be returned to the Government in 2029.
Former mineworkers and their families have fought for justice for many years. In a landmark decision, the fund will be handed over to the pension scheme. The Government said this will ensure former pit workers “who powered the country for decades finally get the just rewards from their labour”.
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When British Coal was privatised in 1994, the Government also agreed to take half of any profits generated by the pension scheme, in return for a guarantee that pensions would increase in line with inflation.
The scheme has continued to produce strong returns and the Government has never paid any funds into it.
Miliband said: “We owe the mining communities who powered this country a debt of gratitude. For decades, it has been a scandal that the Government has taken money that could have been passed to the miners and their families.
“Today, that scandal ends, and the money is rightfully transferred to the miners. I pay tribute to the campaigners who have fought for justice – today is their victory.”
Gary Saunders, chair of the trustees of the Mineworkers’ Pension Scheme, said: “As a trustee board, we are delighted we will be able to put more money in our members’ pockets. We are also grateful to the many members and MPs who have shown support [for] the scheme on this matter over the years.”
The trustees of the pension scheme will be responsible for deciding how the £1.5bn fund will be distributed among the scheme’s 112,000 members and are now working at speed to deliver the bonus into pension pay packets from November this year.
