Former coal miners in Wales have called for a review into the current arrangements of their pension scheme, which they have dubbed as “appalling”. Last year a parliamentary committee called for a review of the arrangement. However, the government pushed back, arguing that the scheme was “fair and beneficial” to workers.
The main point of contention is that the government receives half of any surplus from the miners’ scheme under the agreement. So far, the UK Government has made £4.4bn from the scheme, in return for guaranteeing its cash value.
Failure to adjust
Last year, the House of Commons Business Economic and Industrial Strategy (BEIS) committee found that the number of people committed to the scheme had reduced notably since British Coal was privatised in 1994.
However, the BEIS also found that the government failed to adjust the price to provide the guarantee to reflect this change. Initially, in response to the BEIS report, the UK Government argued that trustees had preferred to maintain the surplus sharing agreement, rather than relinquish the government’s guarantee and risk-taking 100% of future surpluses.
This has led to condemnation from opposition MP’s and former mineworkers. Ex Welsh miner Wayne Thomas said: “No government should benefit on the backs of miners and their widows.”
Thomas continued arguing that if the government relinquished its entitlement to a £1.2bn investment reserve fund, it would immediately uplift the Welsh miners’ pensions.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
“It would make a difference to individuals. It could be anything between £15 to £20, but if you take a widow on a low pension, [that] could make a big difference. We see the average gas price going up, heating costs are tremendous. Anything for these widows would benefit all of us.”