Mineworkers’ Pension Scheme

Stephanie Peacock Excerpts

Thursday 14th February 2019 Commons Chamber

[Stephanie Peacock (Barnsley East) (Lab)]

Thank you, Mr Speaker. I also place on the record my thanks to you for selecting this debate, which I am pleased to have secured for one simple reason: to give the Government a chance to do right by retired miners and their families in my constituency and coalfield communities across the country.

I understand the significance of the mineworkers’ pension scheme to other hon. Members here today, such as my hon. Friend the Member for Ashfield (Gloria De Piero), who has brought so many of those involved together; my hon. Friend the Member for Blaenau Gwent (Nick Smith), who led the recent Westminster Hall debate; hon. Members who are themselves former miners; and the many other coalfield MPs who join me here today.

This debate specifically seeks to address the injustices of the surplus sharing arrangement agreed in the mineworkers’ pension scheme back in 1994, but I want to start by explaining just why it matters so much to people in areas such as Barnsley. Our community is one built on the coal industry. It once helped sustain some 30,000 jobs in the area, many of which were directly involved in mining itself, where the work was tough, difficult and dangerous. Aside from the economy that depended on it, the industry also fostered an identity and a sense of community spirit that lives on to this day.

In the same way that mining powered our community, our community powered a nation, so I firmly believe that those who did so deserve nothing less than a fair arrangement that properly looks after them in later life. Unfortunately, the current scheme, agreed with the Government on the privatisation of British Coal in 1994, no longer does so. Back then, the Government offered to act as a guarantor to the scheme, ensuring that the pensions hard earned by miners would not decrease in value.

[Nick Smith (Blaenau Gwent) (Lab)]

I thank my hon. Friend for giving way. She is doing a great job here this evening. Does she agree that we are not disputing the importance of the Government guarantee? It is giving retired miners like my uncles peace of mind that their pensions are secure, and that is really important. The question is whether the Government still need to take a 50% share, more than £3 billion over 25 years, out of the scheme, when they have not made any—any—direct payment into it. Finding the best way of giving former colliers and their families a fairer share of the pension is what has earned our focus tonight, and that is what she is leading on.

--- Later in debate ---

[Stephanie Peacock]

My hon. Friend is absolutely right. I want to make it clear at this stage that my complaint is not with the deal at large. There are some concerns over the details of the bonus element of the pension, whereby disappointing investment returns could see bonuses lost over time and members’ pensions worse off by around 30% in real terms—I intend to press the Minister on that issue later—but like the trustees I acknowledge that elements of the deal are beneficial.

[Grahame Morris (Easington) (Lab)]

I compliment my hon. Friend on securing this really important debate. Just to echo her comments, the nation owes a debt of honour to the miners and mining communities for providing the fuel that powered a nation. Many miners died prematurely, including my own father in his 50s and my grandfather in his early 50s. What will happen to the surplus when the last of the miners and their beneficiaries have passed away? Where will that surplus go, and is that driving the Government’s actions?

[Stephanie Peacock]

My hon. Friend makes a really important point. I am sure the Minister has heard it and will respond in due course.

The guarantee has provided a safeguard that has allowed the trustees to follow higher-risk, and subsequently higher-value, investments that have proved lucrative.

[Nick Thomas-Symonds (Torfaen) (Lab)]

I congratulate my hon. Friend on her fine speech. Picking up on a point from the previous intervention, the very reason there has to be action soon is that if there is not, the miners themselves will not get benefit from it while they are alive.

[Stephanie Peacock]

My hon. Friend is right, and I will come on to speak about that in a moment.

The guarantee is not without its merits, but what the debate seeks to address is the specific surplus sharing arrangement, which, as hon. Members have said, has seen the Government profit so disproportionately at the expense of miners.

[Caroline Flint (Don Valley) (Lab)]

I congratulate my hon. Friend on securing the debate. Many people in Doncaster share the same concerns as those in her constituency in Barnsley. Does she agree that when the scheme was first set up the balance of risk was different? What we know now, all these years further on from 1994, requires at the very least a revision to look at the balance of risk being fairer in the future.

[Stephanie Peacock]

I thank my right hon. Friend for her comments. She is absolutely right, and I will come on to talk about that in a moment. She talks about when the agreement was set up. The Minister admitted to me, in response to a written question asking what actuarial advice was taken, that

“no such advice was obtained”.

Can we consider that for a moment, Madam Deputy Speaker? This arrangement was put in place with no expert advice. It is little wonder that the initial prediction proved woefully inaccurate and the surplus has been substantially more than anticipated—and it shows.

The sheer amount of money that has been taken out by the Government since 1994 without returning a single penny is staggering. The Treasury has pocketed £4.4 billion since 1994.

[Mr Jim Cunningham (Coventry South) (Lab)]

I thank my hon. Friend for giving way, and I am sure many ex-miners in Coventry—we used to have two collieries—will be very grateful to her for securing this debate and for trying put some wrongs right. I am sure they will appreciate that very much, because a lot of them suffer from silicosis and other diseases. She is doing a great service to the miners.

[Stephanie Peacock]

I thank my hon. Friend. He is absolutely right that a lot of former miners are taking a great interest in this debate, not least because the Government have taken £617 million this year alone, on top of £102 million over the past two years. As if that was not already enough, they plan to take another £427 million over the next three years.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

My hon. Friend is making a really powerful speech. Does she agree that pensioner miners in areas such as mine in Durham should be getting an enhanced set of benefits from the scheme, rather than the Government creaming off this money? It is an absolute outrage.

[Stephanie Peacock]

I thank my hon. Friend for her contribution. I know that her constituency hosts the Durham miners’ gala, which celebrates the coalfield communities. She is absolutely right about the money that the Government have taken out. I repeat that they have not contributed a single penny from their own funds. These are huge sums of money.

[Ann Clwyd (Cynon Valley) (Lab)]

I congratulate my hon. Friend on securing this debate. The miners have had to fight every inch of the way, including for pneumoconiosis compensation and everything else. In my constituency in the Cynon Valley there is real anger and a feeling that the miners have been cheated by the refusal to share out this surplus money in a fair and proper way.

[Stephanie Peacock]

My right hon. Friend is absolutely right. The sums of money involved are huge, but for the individuals and families affected, it is striking how small the numbers are.

[Chris Elmore (Ogmore) (Lab)]

I congratulate my hon. Friend on her speech. She is championing miners right across the UK, including in my seat in Ogmore. Does she agree that we are running out of time? Lots of widows now receive the miners’ pension, based on a reduction. Unless the Government take action now, we will be in a position where the money will simply be taken up by the Treasury. That cannot be right for the thousands of miners left and their families.

[Stephanie Peacock]

My hon. Friend is absolutely right. The average pension is just £84 a week, but it is a lot less for widows in receipt of a pension. Some are forced to get by on much less. For instance, I have read of one who receives as little as £59 a week, after spending the best part of three decades down the pit.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

Of course, the north Staffordshire coalfields were some of the most prosperous and efficient coalfields in the country. Does my hon. Friend agree that if the money that the Government are taking into the Treasury was spent directly on pensioners, the economic impact on their local communities, which have been starved of funds, would be immense, and in some cases transformative?

[Stephanie Peacock]

My hon. Friend is absolutely right. It is just totally unfair. How can £59 for a retired miner and £4.4 billion for the Government possibly be justified? How is that fair? These are people who toiled for years in dangerous, gruelling conditions to help to keep the lights on and our country running.

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Lady on securing the debate. So many people are present to register their support for what she is saying, and I am here to do the same. I have seen the surplus sharing arrangement referred to as a

“legalised but grossly immoral raid on the funds.”—[Official Report, 10 June 2003; Vol. 406, c. 171WH.]

Is it not now time for this Government to right a wrong?

[Stephanie Peacock]

The hon. Gentleman is absolutely right, and that is the purpose of this debate. It is time that action was taken. We should consider what a difference it would make to pensioners’ lives if we diverted more money into their pockets, rather than into the Government’s coffers.

[Edward Miliband (Doncaster North) (Lab)]

My hon. Friend is speaking compellingly, despite the many interruptions. She certainly speaks to the sense of injustice around this issue in my constituency. Has she had any discussions with the trustees of the mineworkers’ pension scheme to find out their views on what a fair way forward would be?

[Stephanie Peacock]

I thank my right hon. Friend for that intervention. I know he has championed this issue over many years. I have indeed spoken to the trustees, and they are in agreement that we need to look at this again.

[Sir William Cash (Stone) (Con)]

I would simply like to say, first, that I hope the hon. Lady gets a review out of this debate, at the very least; and secondly, that I have always supported the mineworkers, since the closing of the pits by Michael Heseltine. It was a long time ago, but the bottom line is that the miners deserve to be looked after properly.

[Stephanie Peacock]

I thank the hon. Gentleman for that contribution. I am pleased that we have cross-party support today. It is very welcome.

The risk undertaken by the Government in guaranteeing the pensions no longer justifies the price paid by the miners for that assurance. The membership of the scheme alone has decreased substantially over the decades since the deal was struck. In 2006, there were 280,000 members; now, there are 160,000. The Government’s financial risk in their role as guarantor of the pensions is in permanent decline, yet in essence they are still charging miners the same price that they charged 25 years ago.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

My hon. Friend is completely right and is making a really powerful case on behalf of mineworkers all over the country. Does she agree that we need to know whether the Government are seeing the mineworkers’ pension as a source of income generation? If they are, that would be utterly morally wrong, given the contribution that the mineworkers have made to our economy over so many years.

[Stephanie Peacock]

My right hon. Friend is absolutely right. I am sure that the Minister has heard her question and will address it in good time.

Never mind whether this is fair. From a financial perspective, the scheme fundamentally does not provide value for money for its members. I implore the Minister not to respond with platitudes about the benefits of the Government’s guarantee for the scheme. We know that it has been beneficial, and as many a former miner from Barnsley will tell us, they know there is no such thing as a free lunch.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

I speak as a serving miner at one time, who had two broken legs. I wonder about this sometimes when I see in the newspapers about this Sir Philip Green and how he stole all the pensions, yet here we are, sitting here and the Government are stealing pensions. They should have their knighthoods taken off them as well.

[Stephanie Peacock]

I thank my hon. Friend. As a former miner, he speaks with passion and has done over many decades, and he is absolutely right. It is blatantly unfair that those who have spent a life working literally at the coalface will be left to struggle in retirement, when the Government can instead help the near 160,000 former miners still affected. This is their money, and I appeal now to the Minister to do right by them.

[Stephen Kinnock (Aberavon) (Lab)]

I thank my hon. Friend, and as the grandson of a coal miner, I know that the speech she is making is so important for the communities that we represent. When the Prime Minister took over, she stood on the steps of Downing Street and said that there are “burning injustices” affecting our nation. Does my hon. Friend agree that this is one of those burning injustices? If the promises that the Prime Minister made are to mean anything at all, this wrong must be righted immediately.

[Stephanie Peacock]

My hon. Friend is absolutely right: it is totally unfair. That is why I ask the Minister to dispel the concerns that I briefly touched on earlier and protect the bonus element of the members’ pensions, which will prevent real-terms losses to pension value in times of poor investment return. Most importantly, is she prepared to amend the surplus sharing scheme and meet the coalfield MPs, the scheme trustees, members and the National Union of Mineworkers to discuss a revision, including consideration of the recent NUM-commissioned report that suggested a 90:10 split in favour of the miners?

Miners and their families in this country had their way of life ripped apart. They were branded “the enemy within”. Men were imprisoned because they were fighting for their jobs. Women ran soup kitchens because they were fighting for their community. Spirits were bruised but never broken. Tragically, too often our miners were let down. The unfairness of the scheme must not—cannot—be allowed to stand as the final chapter in that dismal history. Retired miners have waited long enough for the only thing they ever wanted: their fair share.

--- Later in debate ---

[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.