Northumberland Labour Leader Cllr Davey writes David Parry of the Industrial Communities Alliance. A
11 January 2017
Dear Mr Parry
Northumberland County Council, at their meeting in December, considered the Motion initiated by Wigan MBC and circulated to Alliance Member Local Authorities on the matter of mIners’ pension fund surpluses. Members viewed with concern the injustice whereby the Treasury receives 50% of surpluses from the Mineworkers Pension Scheme, accumulating so far over £3bn, a sum taken from people and communities that are least able to afford it. They believed that this is out of all proportion to the risk covered, and fully support the Alliance’s call for independent scrutiny by the Public Accounts Committee to address this unfair arrangement.
Many retired members suffered terrible health conditions and painful deaths in this region because of exposure to coal dust,without any compensation Successive governments have continued to take huge amounts from the fund, which was set up with miners’ money to help miners. Since 1994, £3.3bn has been paid into the Treasury from surpluses in the miners pension fund.
Members were advised that, in 1994 the miners’ pension scheme had become a stand-alone trust and was closed to new members. The government guaranteed that the pension entitlements would rise in line with inflation and in return the government would receive 50% of any surpluses, with the other 50% used by trustees to improve benefits. The Coal Industry Act 1994 stipulated that the government was entitled to no more than half of the surpluses; they could have taken less, but never did.
Since then, spectacular surpluses have been made with no further money paid in by the taxpayer and the scheme had recently been extended to 2029. The total gross payments to the government are expected to be £8bn within this period, with no contribution from the government. The Council agreed that this benefit was out of proportion to the insurance cover it provided.
Accordingly, Northumberland County Council fully supports the call for independent scrutiny by the Public Accounts Committee to address this injustice and seek answers to the four questions posed :
1) The scheme had covered its own liabilities every year without call on the taxpayer. 2) Was the financial risk underpinning this agreement much lower than expected? 3) Given the Treasury had received a large windfall from the mineworkers pension scheme, should not more be returned to the coalfield communities which suffered from deprivation? 4) There were no new members who would claim, so if retired miners weren’t to get full benefit, who would? 5) Was the mineworkers’ pension scheme paying too much to the government, given the very small risk?
Yours sincerely
Councillor Grant Davey Leader of the Council
