Mineworkers’ Pension Scheme

Claire Perry Excerpts

Thursday 14th February 2019 Commons Chamber

[The Minister for Energy and Clean Growth (Claire Perry)]

May I sincerely congratulate the hon. Member for Barnsley East (Stephanie Peacock) on securing this debate and on a superb, passionate speech? It was brilliant to hear.

I need to declare a strong interest in this matter. There is a reason why I take my stewardship of the scheme incredibly seriously, and that is that my mother-in-law is a beneficiary. She is a widow and her husband, Bill O’Neill, who was a leading light in the coke workers union, died very young as a result of his many years of service underground. Indeed, my husband turned down a job in the Keresley pit at the age of 16, but got into trouble at university for helping to organise the blockade of ports on the east coast to stop the imports of Polish coal, so I will not take any lessons from anybody in this Chamber about the impact of the scheme or the feelings that have been raised over the years, which were so powerfully expressed by the hon. Lady. I completely share her view that one thing that we always need to focus on is the sheer blood, sweat, tears and toil that went into building our industrial revolution. One of the marvellous things about my current portfolio is the opportunity perhaps to repurpose some of that work, through things such as geothermal energy projects, to basically create energy for the next generation, based on the effort that went in.

I want to pick up some of the hon. Lady’s points about how the scheme is working and touch on some of the issues around cash flow. It is a little unfair of the hon. Member for Ashfield (Gloria De Piero) to say that there has been no engagement. There has been a lot of engagement on this process. I continue to be interested in what the trustees are bringing forward; indeed, I was discussing this with the Chancellor only today.

[Nick Smith]

I understand that the mineworkers’ pension scheme trustees tried to meet the Department before Christmas to talk about the guarantee but have still not heard from the Department about a meeting. Will the Minister pledge this evening to meet the mineworkers’ pension scheme trustees within the next fortnight?

[Claire Perry]

I will, but I met the trustees last year. I think that they have done an exceptionally good job, and I shall say more about that later. We have discussed their proposals with them, and I am shocked to hear that they were told that a meeting was not available to them. A meeting will be available whenever they want it.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

Was a review process written into the 50:50 split when the decision was made? If it was not, would not agreeing to a review now be the honourable thing for the Government to do, not least because the decision was made more than 20 years ago?

[Claire Perry]

This is a factual point with which I intend to deal shortly. The split has already been reviewed. It was last reviewed in 2002 by a Labour Energy Minister, who said:

“the trustees have been advised that the Government does not feel it would be right to adjust the current 50/50 surplus sharing arrangements.”

He also pointed out that markets could go up or down. In fact, in 2002, the scheme was in deficit, as it was again in 2008 and 2009. The then Labour Government decided that, given the future unpredictability of the scheme, it would not be correct to review the pension surpluses. So it is not correct to say that the decision has not been reviewed. Indeed, a Labour Government made the decision not to change the surplus sharing arrangements.

[Stephanie Peacock]

The Minister will acknowledge that that review took place quite a few years ago, when the scheme was in a very different state. Given that there are now more than 150,000 fewer former miners and their widows, the risk for the Government is substantially less than it was then.

[Claire Perry]

The hon. Lady has made a valid point but, as she has also said, if the scheme had been reviewed at that point, many more thousands of people would have received a higher pension. The decision not to conduct a review was made partly because of the volatility that is inherent in a scheme for which the Government act as guarantor, and partly because, notwithstanding the idea that this is cash that sits in the Government’s coffers, the Government have no money of their own. In many instances, the money that has come into the scheme has been spent directly in the coalfield communities. We have spent more than £1 billion —[Interruption.] Hang on. We have spent more than £1 billion of Government money in the coalfield communities over the last 20 years, and we have committed an additional £70 million since 2010. The point is that, if money comes to the Government, it is part of the Government’s general receipts and can then be recycled. That money has contributed to the benefits that many other pensioners have received.

[Grahame Morris]

Will the Minister give way?

[Claire Perry]

Let me make some progress. [Interruption.]

[Madam Deputy Speaker (Dame Eleanor Laing)]

Order. Some important questions have been asked, and I am sure that Members want to hear the answers from the Minister.

[Claire Perry]

I am afraid that there is a fundamental fallacy in some of the arguments that have been advanced. I suspect that the Labour Government made the decision not to review the surplus sharing for the same reason, which is that 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.

[Sir William Cash]

rose—

[Claire Perry]

No, I will not give way. Some important questions have been answered. I think that I was generous in allowing two speeches to be made before my response.

As the hon. Member for Barnsley East rightly said, the scheme continues to function and the numbers are falling. The only scheme that resembles this one is the one that was set up for rail workers. Again, the Government are the guarantor, which means that any liabilities incurred by the scheme will come back to them. For that reason, the trustees, who include ex-miners, have done an amazing investment job. Because of that guarantee—it is basically a Government-backed scheme—the returns are at least a third higher than they would otherwise have been, so it has generated a lot of value.

[Nick Smith]

rose—

[Claire Perry]

Does the hon. Gentleman want answers, or does he want to keep asking questions? Because I love the hon. Gentleman, I will take a question from him.

[Nick Smith]

I have listened to what the Minister has said. We argue that the Government have received at least £3.5 billion in surplus in recent years. The Minister says that they have spent £1 billion in coalfield communities in the last 20 years. Labour Members feel that our communities have been short-changed by £2 billion. Given that the last review took place nearly 20 years ago, why will the Minister not do the right thing now and agree to another review?

[Claire Perry]

I am sure the hon. Gentleman will be the first to acknowledge—the point has already been made—that, sadly, one of the results has been that many people who are in receipt of this pension scheme, including the hon. Member for Blyth Valley (Mr Campbell), who was in his place, no longer live in those coalfield communities, but they have benefited as pensioners from many of the other pension benefits that that income has gone towards providing.

I met, and was incredibly impressed with the trustees. Relative to other schemes, the results they have provided and the compassion and generosity with which they administer the scheme are second to none, and we should pay tribute to them for that. I point out again that the returns from the Government underwriting of the scheme are about a third higher in real terms than they would have been.

I want to turn to something that has been suggested by the trustees. When I met them—and perhaps the hon. Member for Barnsley East and I should meet them together to have the same conversation; I will be happy to do that—they 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. They have come forward with some excellent proposals and I commend them for that. I had a brief discussion this evening with my right hon. Friend the Chancellor about my interest and the Treasury’s interest in properly reviewing those proposals and taking them forward. I am very happy to have those conversations face to face, as I have committed to do.

I genuinely admire the hon. Lady’s speech. It is brilliant to see her and so many colleagues standing up for a group of people who many may argue gave more to the system than they received from it. As a family member, I am proud to acknowledge that and to stand up as the steward of the scheme and pledge to her that I will do my best to ensure that it continues to deliver.

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.

Question put and agreed to.