Govt defends position on Mineworkers’ Pension Scheme; open to cross-party talks

The government has once again defended its position to not change the surplus sharing arrangements of the Mineworkers’ Pension Scheme (MPS), but said it is open to holding cross-party talks with the trustees on the matter.

Following a debate in parliament last week (14 February), the Minister for Energy and Clean Growth, Claire Perry, said MPS trustees “understood” that changes to the surplus sharing arrangements were “not the biggest priority” and that protecting accrued bonuses came first.

Under the current arrangement, 50 per cent of any surplus after 1994 is made available to provide bonuses for scheme members, currently 150,000, with the remaining 50 per cent going to the government, thought to be roughly £6.5bn since the arrangement was agreed.

Perry said: “They [the trustees] indicated to me that they understood that changing the surplus sharing arrangements, as was considered by the last Labour government and rejected, was not the biggest priority. The biggest priority was protecting the accrued bonuses and making sure that the scheme could proceed on that basis.

“I do want to say that the trustees’ proposals are excellent, albeit we need to look at the cash flow implications. We will continue to explore options and I am very happy to do that on a cross-party basis with all members who would be interested in doing so.”

The debate, brought forward by Labour MP for Barnsley East, Stephanie Peacock, has helped build pressure on the government to explore how it can improve the scheme benefits for members of the MPS, after a number of MPs, including Conservative MP for Stone Sir William Cash, came out in support of changes.

In August 2018, MPS trustees held talks with Department for Business, Energy and Industrial Strategy to explore how it can revise benefits for all parties.

Perry noted that proposals put forward by the trustees were “excellent” but that the government needed to look at “cash flow implications”.

In September 2017, it emerged that the government received almost £6.5bn from two pension schemes in the mining industry since 1994 when the surplus sharing arrangement was agreed.

Defending the current arrangements Perry said: “The money that comes to the government is then being spent to support pensioners in many ways, providing them with, for instance, free prescriptions and bus passes. It is not correct to say that the money is just sitting there.”

She added that the government has spent more than £1bn from the scheme surplus “directly into coalfield communities”, with a further £70m committed since 2010.

Despite this, Labour MP for Blaenau Gwent, Nick Smith said that following the government's receipt of a £3.5bn surplus from the scheme, members feel that their communities have been short-changed by £2bn.

Perry confirmed that she has had close conversations with Chancellor Philip Hammond regarding the scheme and added that “a meeting will be available [with trustees] whenever they want it”.

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