Official Report 1198KB pdf
The next item of business is a members’ business debate on motion S6M-00430, in the name of Christine Grahame, on the mineworkers pension scheme. The debate will be concluded without any questions being put.
Motion debated,
That the Parliament notes the recent report by the UK Parliament’s Business, Energy and Industrial Strategy Select Committee into the Mineworkers’ Pension Scheme; understands that the scheme, established in 1994, meant a 50:50 split in surplus sharing between the miners and the UK Government and that, to date, the UK Government has received £4.4 billion, with at least a further £1.9 billion due and the UK Government paying nothing into the fund; further understands, however, that many beneficiaries are struggling to make ends meet, including those in the Midlothian South, Tweeddale and Lauderdale constituency; notes that the committee therefore recommended amending the 50:50 surplus sharing arrangements in the miners’ favour, and immediately giving the £1.2 billion currently held in the Investment Reserve to former miners; understands that the Welsh Government has registered support for these recommendations, and notes the calls on the Scottish Government to do likewise.
12:46
I thank the members who supported my motion.
I commend the report by the United Kingdom Parliament’s Business, Energy and Industrial Strategy Committee, whose unanimous cross-party report along with the pursuit of this injustice by my colleague Owen Thompson, the MP for Midlothian, brought me to the debate. I add to that the Scottish Government, which wrote to the UK Government supporting the recommendations of the report.
As Penicuik, Gorebridge and Newtongrange, which were once at the heart of coal mining, are in my constituency, and as my maternal grandfather was a Welsh miner who died prematurely from injuries sustained in the pit well before I was born, I have a deep interest in what happens to miners and mining communities. In the 1980s, I witnessed the mounted police charging into men who were fighting for their livelihoods and communities.
I will provide a bit of historical context to the pension arrangements. They were put in place in 1994, when the mines were privatised. Since then, the UK Government has benefited from 50 per cent of the surplus in the funds, to the extent that—this is key—without contributing a penny, it has received £3.1 billion, and, in addition, £1.3 billion from the investment reserve. There is a further £1.9 billion in the pipeline—I have never seen a billion, but that is a lot of money.
The committee held an inquiry and unanimously recommended that the 50:50 split should be reviewed and, as an interim measure, that £1.3 billion should be redistributed to the miners. That humongous sum contrasts with the actual pensions that miners receive. The median is £65 per week, so 50 per cent of members receive less than that, while 25 per cent receive less than £35 per week and 10 per cent receive less than £18 per week.
At the metaphorical coalface of life and paying for everyday bills, many miners are on the breadline, while thousands, like my mother’s father, have been injured and died not even having enjoyed their pensions. It is estimated that 7,000 members die each year. It was an inherently dangerous job that by its nature led to poor health, and that is now compounded by susceptibility to Covid because of those underlying health conditions.
Against all that, it is an affront to justice that the UK Government creams off billions of pounds and has responded to the report with a rejection of all its recommendations. What is the justification? It claims that the guarantee that the UK Government will plug any deficit if the scheme is vulnerable to failure is a reasonable defence. The reply from Anne-Marie Trevelyan, Westminster Minister of State for Energy, Clean Growth and Climate Change, was:
“The Government continues to believe that the arrangement agreed in 1994 was fair and beneficial to both Scheme members and taxpayers. Scheme members have rightly shared in the benefits but the Government has taken on all the risk.”
The reality is that, even through the 2008 financial crisis and to date, the fund has thrived, as the free billions are harvested by the UK Government. Where is the evidence of risk, if any? Is it commensurate with a 50:50 split? The previous schemes assigned the surpluses at 70:30 in favour of the miners—the beneficiaries.
The UK Government has a sad track record in its attitude towards the miners, which, as I referenced, started with the brutal treatment of decent folk who were defending their jobs and communities. Of course, that was compounded by the recent remarks of Boris Johnson, when he said:
“Thanks to Margaret Thatcher, who closed so many coal mines across the country, we had a big early start and we’re now moving rapidly away from coal altogether.”
Those were crass remarks, but they were in keeping with the disdain for the coal miners and their communities and are now compounded by the rejection of a review of the pension scheme. Irony of ironies, the Westminster Government is now, controversially, considering opening a fresh pit near Whitehaven, where it will, of course, need coal miners.
That contrasts with the approach of the Welsh Assembly and of the Scottish Government, which is providing a pardon for miners who were convicted in the 1984-85 strike action in Scotland and has written to the UK Government to support the Westminster committee’s recommendations.
Whether or not members have a mining community in their constituencies, I urge them to pursue that with their MP and to support the select committee, shame the Government at Westminster and make it, for once, do right by the miners by accepting the unanimous recommendations of the cross-party select committee. After all, the Westminster energy minister offered a chink of hope when, in a letter of reply to Owen Thompson MP, she said:
“I am unable to accept the conclusions and recommendations. ... However I hope that as a result of my discussions with the Trustees we can reach a mutually acceptable way forward”.
I suggest that people get writing. Let us hope that those are not just easy words but that there are actions to follow, before more miners fall into penury and others die before they receive their pensions.
12:52
As the MSP for Cowdenbeath, I am pleased to speak in this debate on the mineworkers pension scheme. I congratulate my Scottish National Party colleague Christine Grahame on securing this important debate. She has just outlined in some detail the background to the privatisation of the scheme in 1994 and the financial arrangements that were put in place at that point. As we have heard, in return for a UK Government guarantee, there was to be a 50:50 split of any surplus.
Some 27 years after the scheme was privatised—during which time the Government has accrued around £6.3 billion under the scheme without having, as we heard, paid in a single penny—very serious concerns have been raised about the plight of the miners who are supposed to be the beneficiaries of the scheme but who receive very low pension pay-outs and are struggling to make ends meet. As an MSP for former mining communities, I very much share those concerns.
In the short time that is available to me, I will highlight key issues that emerged from the April 2021 report of the Westminster Parliament’s Business, Energy and Industrial Strategy Committee. Those issues led the committee to conclude unanimously that the scheme must now be reviewed and a better outcome for miners achieved.
First, the option of a 50:50 split in return for a guarantee was presented at the time as a fait accompli, leaving the trustees with no choice but to accept.
Second, the 50:50 split was entirely arbitrary. Indeed, at paragraph 17 of its report, the committee’s damning conclusion was:
“The Government failed to conduct due diligence during the 1994 negotiations and undertook no empirical analysis or evaluation to inform or support the 50:50 split it proposed. The Government was negligent not to take actuarial advice.”
Third, the UK Government has not paid in a penny over the lifetime of the scheme, but it has accrued £6.3 billion. It was noted in evidence to the committee that such an arrangement must be viewed as highly unusual and that it would not be allowed today.
Fourth, the UK Government has received more than was expected because the scheme has performed strongly, notwithstanding the global financial crash and the Covid pandemic.
Fifth, as we have heard, the median pension is a meagre £65 per week and, moreover, as we have also heard, half of the members receive less than that, notwithstanding the chronic health issues facing many former miners and the deprivation suffered in the communities in which they reside.
Sixth, the number of pension scheme members is sadly decreasing by approximately 7,000 per year and therefore time is running out to sort the matter.
Seventh, the role of a guarantor is surely not to make a profit at the expense of the beneficiaries of the scheme.
Eighth, there would be minimal risk to the UK Government as guarantor in changing the split to favour the beneficiaries, given the strong performance of the scheme, the considerable surplus that the UK Government has already accrued and the reducing number of members of the scheme. Indeed, as paragraph 39 of the BEIS Committee report states, the head of pension strategy at Coal Pension Trustees Services Ltd posed the question:
“what is the true value of a guarantee that is extremely low risk and extremely unlikely to be used”?
It is clear that the scheme requires to be reviewed as soon as possible. It is neither fair nor appropriate and it is fundamentally flawed in its design. To date, the UK Government has set its face against such calls for a review and for an immediate transfer to the miner beneficiaries of the £1.2 billion currently in the investment reserve fund. To many former miners and their families in my Cowdenbeath constituency, that intransigence and, indeed, hostility on the part of the UK Tory Government will come as no surprise whatsoever, for they have been on the sharp end of that for decades.
In conclusion, I urge the Scottish Government to do all that it can, even though the power lies with the Westminster Government, to urge the UK Government to do the right thing, and to ensure that here in Scotland we have a voice for former miners and their families. We are determined to see right done by them.
12:57
I thank Christine Grahame for lodging her motion. I am immensely proud to represent South Scotland, a region that is steeped in Scotland’s mining history. As Christine Grahame highlighted, Midlothian was one of those proud mining communities. At one time, it contained 26 collieries employing 11,000 miners, and today, of course, it houses the National Mining Museum. Neighbouring East Lothian is home to the earliest documented coal mines in Scotland, between Tranent and the town of Prestonpans, where the local Labour club ensured that local children were still being fed a hot meal after school every day during the miners strike.
It is a region where Scotland’s coalfields run almost continuously from the west coast to the east coast. Some of the most valuable coal seams are in Lanarkshire, which paved the way to making it the seat of the iron smelting industry at one time. On the west coast, in Ayrshire, there were, at one time, around 14,000 coal miners who mined 4 million tons of coal annually. A certain Keir Hardie founded the Ayrshire Miners Union, ultimately leading to the National Union of Scottish Mineworkers.
Even in Dumfriesshire, where I live—an area that many people may not associate with coal mines—deep mining was integral to the economy as far south as Canonbie and Rowanburn, and more recently in Upper Nithsdale from the Fauldhead mine in Kirkconnel, which was the largest local pit until it closed in 1968, to the opencast that continued until just a few years ago. Many of my relatives worked in those Upper Nithsdale pits until the demise of the industry in the 1980s. I should declare an interest, because some of them retired and are mining pensioners today, although some had to move out of the area, to the north-east, to find work in the oil industry.
If there is one lesson that we must take from the demise of the pits and the devastation that it inflicted on our communities, many of which have still not recovered today, it is that we must have a just transition for our oil and gas sector that creates new jobs to replace those that will be lost. Never again can we have a Government inflict such economic vandalism on communities and then walk away, leaving industrial-scale levels of unemployment.
Not content with the pain inflicted on those coalfield communities by Thatcher in the 1980s, and fresh from those crass comments joking about pit closures, her protégé Boris Johnson has added insult to injury by failing to right the injustice of the mineworkers pension scheme. As we have heard, since the Tories privatised British Coal, in 1994, the Treasury has stripped out 50 per cent of any surplus.
I ask the member to acknowledge that we had a long period of Labour Government when those actions took place, which I personally support. I support the proposition that the BEIS select committee makes. The member cannot say what he is saying without accepting his party’s culpability in the current situation as well. This anti-Tory rhetoric is tiresome.
I know that Mr Kerr does not like to hear about his Government’s record, but the reality is that Labour’s policy on this particular issue is very clear. It was the Tories who privatised British coal in 1994 and the member’s Government that created the injustice that holds today, and they still reject that now. The member’s Government has taken £4.4 billion that should have gone to miners and their families. It is those miners—not Tory ministers—who toiled away down in the pit, creating wealth and prosperity, and those are the thanks that Mr Kerr’s Government gives them today. [Interruption.]
That is enough sedentary comments, Mr Kerr.
If Mr Kerr wants to intervene again, I am happy to take his intervention. I have made my and my party’s position absolutely clear. I am proud of the fact that our manifesto in the 2019 election made clear that we would redress and change this particular policy.
As we have heard, some pensioners have been left scrimping on a pension that is, in half of cases, less than £65 a week, yet if there ever were communities that would need that extra spending power, and local people needing a few more pounds in their pockets, it would be our coalfield communities, which are in desperate need of regeneration.
Labour’s position on the matter is clear, and it was stated in our manifesto at the election: we believe that the sharing arrangement should be changed so that 90 per cent of any surplus stays with the miners. The fact that the Tories choose not to adopt Labour’s policy of restructuring the pension scheme is obviously unsurprising, but it is frankly vindictive that they still choose not to do so in the face of calls from some of their own MPs. It is a testament to the fighting spirit of all those who campaign on the issue that—finally—the Business, Energy and Industrial Strategy Select Committee of the UK Parliament conducted an inquiry into the pension scheme.
The current 50-50 split of surplus was, as Annabelle Ewing highlighted, arbitrary and simply unfair. Yet, the UK Government continues to reject the putting right of that injustice that miners and their families suffered, which is frankly shameful. Many of the former miners whom that injustice affects are elderly now. They paid their fair share of the pension scheme while they worked, and it is high time that they received their proper share now, in their later years. In many cases, those mineworkers sacrificed their health, working in dark and dangerous conditions to create the nation’s wealth, which frankly remains unfairly distributed.
You need to wind up now, Mr Smyth.
A proper pension pot in retirement is not an aspiration but a right that those miners deserve.
13:02
I thank Christine Grahame for securing this important debate. I am pleased to see her focus on Westminster and the importance of the work that the UK Government has done on behalf of mining communities across the United Kingdom.
There is strength in that partnership, which has brought benefits to our miners through the pension scheme. It has been mentioned already that the select committee conducted an important inquiry and heard evidence from all sides. One thing on which all participants agreed was that the guarantee that the UK Government offered was essential to securing the benefits that the scheme has enjoyed.
Indeed, the report states that the pension scheme made gains of 6.2 per cent in 2020, far outperforming other schemes, and that
“the typical member’s pension”
is
“‘around 33% higher in real terms than it would have been had they received only their actual earned pension up to privatisation’.”
The member mentioned the select committee’s report, so I wonder whether he agrees with its summary conclusion that
“the Government should also relinquish its entitlement to the Investment Reserve, and transfer the £1.2 billion fund to miners, to provide an immediate cash uplift to former miners.”
I am happy to give you the time back, Mr Lumsden.
Okay. Yes, the report is there, but it also mentions that the fund is now in a much stronger position because of that UK Government guarantee.
The conclusions of that report state that
“the Scheme has continued to produce strong returns despite the 2008 financial crisis and the Covid-19 pandemic.”
All parties agree that that is only due to the guarantee that the UK Government continues to provide for the scheme.
In 1996, a report by Binder Hamlyn concluded that no one expected future surpluses of that extent. The trustees and the Government agreed a 50-50 split in good faith, and all parties signed up to it and were content with it. The split was agreed on the understanding that the UK Government would guarantee the scheme, as has already been said, and it was that guarantee that meant that the trustees could invest in more high-risk investments, which has undoubtedly paid off. It is widely accepted that the bonuses would have been less, or non-existent, had the scheme not been guaranteed. One witness at the inquiry even suggested that the pension payout might have been smaller if the Government’s guarantee had not been in place.
I honestly just seek clarity. Do you agree with the findings of the cross-party select committee—
Ms Grahame, you should know better than to refer to “you”.
I beg your pardon, Presiding Officer—I should not have used the “you” word.
Does the member agree with the findings of the select committee, which had Conservative representatives on it? I commend the resilience and toughness of select committees at Westminster.
I agree the with committees at Westminster, and I often see differences between the Westminster committees and those here. The findings are there and that is commendable. The minister has also said that her door is open and that she will talk with the trustees, as Christine Grahame said.
The trustees of the scheme have always prioritised the protection of the bonuses, and it is right and proper that they do so. However, for this to take place, the Government has to have a means by which to secure those bonuses in a time of deficit. No one knows what the future holds. In her evidence to the committee, the minister was eloquent on that point. We do not know how the fund will perform in the future or whether there will be future deficits in the fund that require the guarantee to come into effect. No one could have predicted the success of the fund.
I turn to the question of a review. At the committee, the minister was very clear that her door is open, and she met union representatives on 21 June. At that meeting, the minister asked the trustees to consider whether they would be willing to include the Government’s guarantee in any future discussions around surplus sharing and the investment reserve. I believe that the minister is still awaiting a reply.
The Government has been open in its discussions. It is more than happy to discuss a change to the surplus that would mean removing the guarantee. Up to this point, the trustees have not been open to that.
Scottish miners in all our constituencies have benefited from the strength of the guarantee offered by the UK Government. Their bonuses have been more than they could have expected without that guarantee, and the strength of the scheme is clear.
13:07
I thank Christine Grahame for bringing this most important debate before Parliament. The pits might be gone, but the miners, their families and mining communities remain, and their voices must be heard in the Parliament.
Progress on the pardoning of miners who were needlessly arrested, charged and convicted during the 1984-85 strike was a victory for the principle of justice in the previous session of Parliament. Now, in the current parliamentary session, it is right that we move from the principle to the enactment of justice, and I welcome that.
Other historic wrongs also have to be righted. Since the day the coal industry was privatised—and so the mineworkers pension scheme was, in effect, also privatised—the UK Exchequer has not paid a single penny into the scheme but has taken £4.4 billion out of the scheme. When that was put to the Prime Minister during the 2019 election, he said this:
“We will make sure that all their cash is fully protected and returned”.
He said
“that no Mansfield miner ... is out of pocket”.
It was a promise made not just to the Mansfield miner but to the Midlothian miner and the Monmouth miner. So, let me be as clear as I can be: this pensions betrayal by Boris Johnson and his repugnant view that Margaret Thatcher was some kind of eco-warrior and that her war on the miners was “a big early start” is contemptuous. But it is not anti-Scottish, it is anti-working class. Those retired miners and those widows in Mansfield, Midlothian and Monmouthshire all have the same concerns, the same hardships and the same challenges, and we should not falsely divide them.
The Business, Energy and Industrial Strategy Committee called for reform of the scheme. That call was supported by the pension scheme trustees but not by Boris Johnson’s Minister of State for Energy, Clean Growth and Climate Change, who shamefully twisted the truth, claiming that the trustees supported her when they did not—they supported the select committee and the miners.
In the end, the question for all of us is this: do all those years of hardship, suffering, struggle and sacrifice by the miners count for nothing? We know that the hazards, the risks and the dangers that forged those bonds underground have also brought in their wake chronic health conditions, which is why the betrayal of the miners by the UK Government and the Prime Minister is a question of ethics and justice, as well as of standards of living.
This is a poignant time for those of us who place a value on working-class history. Two days ago, we marked the 71st anniversary of the Knockshinnoch tragedy. This Sunday, we shall assemble at Auchengeich to remember the 47 miners who were killed there 62 years ago. In so doing, we rededicate ourselves to remembering the dead, but also to fighting for the living.
It was the pioneering Labour MP John Wheatley who said presciently in 1926:
“The miners are fighting alone, but they are fighting the battle of the whole nation. If they lose, we all lose.”
So, today’s struggle for justice is not a struggle for the miners and their families alone. That is why they must not lose this fight. It is why this Parliament must support them to win. Make no mistake—a victory for the miners will be a victory for social justice everywhere.
13:12
I congratulate my colleague Christine Grahame on securing the debate. Although the subject of the debate is not directly relevant to Scottish Government policy, I absolutely agree that it is important for us as politicians, as role models and as leaders of society, to call out comments that are completely unacceptable. The Prime Minister’s comments regarding former Prime Minister Margaret Thatcher’s decision to close the mines as having given the UK a “big early start” in tackling climate change are not only unacceptable but deeply offensive. They show nothing other than the contempt that the Prime Minister and the UK Government hold for former mining communities in Scotland.
Many of those communities are located in my South Scotland region. Christine Grahame has invited the Prime Minister to visit the National Mining Museum Scotland in her constituency, and I am sure that many members of former mining communities in my area would welcome a discussion with the Prime Minister on his views on the mine closures that happened under Mrs Thatcher.
The reality of what the mine closures meant has been highlighted by ex-miner Rab Wilson, who said that they had no bearing on tackling the climate emergency. Rab said:
“Kirkconnel, New Cumnock, Auchinleck—all these villages are only here because of the coal ... Socially and economically, it made these local communities. ... The Tories didn’t give a second thought to the social catastrophe they were creating.”
In his book of Scots language poems, “Accent o the Mind”, Rab said:
“The right tae work, that wis aa that we asked
Demands which the Tories said went too faur
Fir tellys, holidays, mibbes a caur ...
Ah’ll never forget it, it’s left its mark,
It festers there yet, somewhaur in the daurk.”
I have written to the Prime Minister to invite him to take part in the discussion that I have agreed to organise on the mine closures. Unsurprisingly, I have not had a response.
Christine Grahame laid out the detail in the report, which shows that billions of pounds should go to the miners. Annabelle Ewing mentioned the fact that the pension amount is as little as £65 per week.
The report talks about the privatisation of British Coal in 1994 and the arrangement that was made between the Government and the trustees of the mine workers pension scheme. In the 2000s, the coalfield communities campaign argued for a review of the surplus sharing arrangements on the grounds that the guarantee had been struck on actuarial advice and may, with hindsight, have been too cautious, and that a 50 per cent share of an unexpectedly large surplus was too much. The consequences of that caused problems for our miners. As Annabelle Ewing noted, not many are left now to benefit from reforms. I ask the minister to do whatever he can to support the miners in the continued effort to ensure that they benefit from anything that comes out of the select committee’s well-worked report.
I again thank Christine Grahame for today’s debate.
13:15
I congratulate Christine Grahame on securing the debate and bringing the campaign to Parliament. She is absolutely right to raise the issue and the work of the Business, Energy and Industrial Strategy Committee. I am pleased that the Scottish Government has already made its position clear, and I hope that the issue will be given as much attention as possible.
There has been much discussion of history in today’s debate. The history of mining in Scotland is a brutal one. It begins with what was called thirlage, which was basically a form of slavery. Conditions for miners and people in mining communities were absolutely appalling. That applies not only to coal mining, but to mining for tin and iron ore. The communities that many of us represent exist because people often lived beside their workplaces and had often moved, perhaps by walking, from another part of the country to live beside the mines.
The select committee report makes clear the principle that the Government should not benefit and profiteer from miners’ pensions. I have always argued for the trade union position, which is that pensions are deferred pay. The principle is that those miners paid into their pension scheme. We have heard a number of contributions highlighting the poor amounts of pension that many miners receive from the scheme. I understand that some widows receive as little as £8.50 per week. Many of the miners receiving those pensions are struggling with work-related illnesses as they get older.
There are many issues of justice. I listened to the Conservative contribution, and I appreciate that the Conservatives find anti-Tory rhetoric tiresome and are attempting to detoxify themselves. The UK Government, and Conservatives here, should be facing up to the consequences of the actions that they forced through in the 1980s. The pit closure programme caused devastation to communities up and down the country.
Those communities are not benefiting from the socioeconomic justice that the UK Government claims to stand for. Nor are they benefiting from levelling up, as we see from Boris Johnson’s reaction to the select committee’s report. Those communities are still suffering from decades of de-industrialisation, poverty and lack of economic justice and jobs. Generations have campaigned for economic justice for those communities since the 1980s.
I respect Katy Clark’s argument, but she was a member of the UK Parliament during the most recent Labour Government. The issue could have been dealt with then, given the nature of the agreement that was reached in 1994. I said that I tire of the anti-Tory rhetoric because both Labour and the Conservatives were party to the agreement. The Labour Party’s partisan approach is ill suited to the argument.
I am grateful to the gentleman. I appreciate the point that he makes, but I point out that—unfortunately—it is now more than a decade since Labour was in power, and the reality is that, as time has gone on, it has become clearer that the balance of risk is very much against the miners. I understand the point that Stephen Kerr’s colleague made earlier when he said that the Government has taken on risk and acted as a guarantor, but the principle is surely that it should be those who paid into the scheme who benefit from it.
The select committee looked at the issues in detail and came to the conclusion that the Government had been negligent at the time and that the only just solution now is for the benefit to be given to those who paid into the scheme, who live in some of the poorest communities in the country. I say to Mr Kerr that, if his Government at UK level is serious about its levelling-up agenda, there is a very simple step that it could take that would put money into those communities. The act would show clearly that it wanted to right some of the wrongs of the past and ensure that those communities are given a fair chance.
There are many other steps that should be taken, but the proposal is a simple step and I hope that, at the end of the debate, we will be united in saying that it is one that the UK Government should take. It would make a significant difference to many people’s lives.
13:21
To this day, the legacy of mining and the miners who made it happen is everywhere across South Scotland, particularly in my home area of Ayrshire and in Midlothian, which is referenced in the motion. It is not just a legacy that has been left on the earth; it is a legacy of social, cultural and political energy that continues to reverberate. I am speaking in the debate in order to celebrate that legacy and the dedication of the miners who broke their backs for our country. They have not been forgotten by me or by the Scottish Labour Party. I hope that we can, through a bit of common sense and decency, get them the pensions that they deserve. That is not much to ask.
I know that there are people in other parties who would like to think that they saw off the miners long ago. However, although many miners are now retired or, sadly, no longer with us, the legacy of the industry lives on in the solidarity, grit and shared experiences of their communities. It also lives on in the poverty that we have heard about, which is seen in many former mining communities and in the miners’ struggle to achieve financial security for themselves and their families, now that their livelihoods and the highly skilled and well-paid jobs that came with mining have all but gone.
I am disheartened to say that, nearly 40 years after the process began, we are still having to stand up and defend the miners and their families against a Tory Government that simply did not care—a Tory Government that saw destroying the power of the working classes as a priority above all else. Why would we expect anything different now?
It is likely that, over the next six years, the Treasury will earn about £23 billion in real terms from the miners’ pension fund, but the sum could grow as high as £55 billion—all that wealth, and so little of it going to those who grafted for it. There was a time when the Tories claimed to be all about getting Britain back to work and putting a pound in people’s pockets. We can see now whose pockets are bulging from the miners’ money.
Fortunately, we have a majority in Scotland against that callous injustice, and I fully support the call to give the £1.2 billion that is held in the investment reserve to the former miners. After all, it is what they are due.
As is rightly mentioned in the motion, the great work of the Labour Government in Wales serves as a fine example for Scotland to follow, and I have no doubt that attempts to follow it will be supported by almost everyone in the chamber. I only despair that we have had to demand it. The distribution of funds should have been reviewed long ago. I thank Christine Grahame for bringing her important motion to the chamber for debate.
13:24
I thank my colleague Christine Grahame for bringing her important motion to the chamber for debate. I also thank members across the chamber for their contributions.
It is clear that, although many decades may have passed, this is still a live issue. That point has been captured by many members. Richard Leonard’s contribution reflected on the need to right historic wrongs, which is—as I think that Carol Mochan expressed it—not much of an ask.
I recognise that we have many challenges and many complex and wicked problems. However, when we are presented with an opportunity to right a wrong and to do the right thing, around which we can all unite, we must seize it. We must also learn the lessons of the importance of a just transition, so that there are not debates taking place in this Parliament decades from now because we failed to learn the lessons of previous generations.
I also recognise Annabelle Ewing’s contribution, which highlighted in particular a very important element of the BEIS Committee report. It is an excellent report, and I commend the committee on its work. To make a point that was picked up on by other members, the UK Government should not be engaging in profiteering—that is not the purpose of the pension fund.
I also recognise the contributions that illustrated the rich history of mining across Scotland and, indeed, the wider UK. I have only to look back a few generations in my family to find miners in Ayrshire and Lanarkshire, and I recognise the often horrendous conditions that they had to work under.
I also recognise the contribution of Mr Lumsden, which seemed to be a statement of the UK Government’s existing position—I hope that he does not mind me saying that. I had some hope when Mr Kerr intervened on Mr Smyth, as I picked up the suggestion that Mr Kerr agreed with the recommendations of the BEIS Committee. [Interruption.]
He is indicating from a sedentary position that he does—I welcome that. Although there may be a difference of opinion across the Conservative group in this place, I hope that Mr Kerr will be full throated in supporting the Government and members across this chamber in calling for the UK Government to do the right thing.
I point out that I am being consistent with the position that I took when I was a member of the House of Commons representing the Stirling constituency, where there are many retired miners who brought this issue to my attention. I am therefore being consistent.
I am also being consistent as a former member of the select committee that produced the report. My former Conservative colleagues on that committee will have received the evidence and their unanimous conclusion is—I believe—based on that evidence. It is therefore an easy thing to support.
I do not belong to the UK Parliament now; I am a member of the Scottish Parliament, and my job is to hold the minister’s Government to account. Therefore, I am free to comment on the UK Government at will.
As a new member of this Parliament, Stephen Kerr is making an excellent start. I fully encourage him in that approach and urge him to share it with Mr Lumsden.
The mineworkers pension scheme was established in 1952 and was closed to new members on the privatisation of British Coal, in 1994. There are more than 120,000 pensioners receiving benefits from the scheme, and more than 10,000 deferred members, with the average pension being under £100 per week. Indeed, I understand that 10 per cent of the pensioner membership receive less than £18 per week. Former Scottish mineworkers and their widows are among those pensioners. Inevitably, their numbers are sadly diminishing year on year.
Over centuries, thousands of Scots lost their lives underground. Even in the past few decades of the industry, working conditions remained dangerous. Many former mineworkers continue to suffer chronic health conditions as a result of their occupation, which is a particularly acute issue, given what we have collectively endured over the past 18 months.
Of course, times have changed and our priorities for energy are rightly refocusing on sustainable and renewable sources as we strive for a just transition away from fossil fuels. However, we should not forget the critical historical role that mineworkers played over many decades—including in the transformative period between nationalisation and privatisation of the industry—in extracting coal to fuel our communities and propel society into the modern age.
As other members mentioned, the National Mining Museum in the former Lady Victoria colliery—in Christine Grahame’s constituency—provides visitors with a vivid reminder of the conditions in which mineworkers toiled, and the gratitude owed to them by all of us. I very much hope to visit the museum soon.
As the chamber is aware, responsibility for occupational pensions is reserved to Westminster, and this Parliament has no influence over decisions affecting the mineworkers scheme or the arrangements set out in the UK legislation in 1994. It was right that, on privatisation in 1994, the UK Government provided assurances and a guarantee to former mineworkers to protect the value of their pensions. It is also right that the risk to the taxpayer was acknowledged.
The arrangements are technical, as has been touched on. In return for the provision of a guarantee, the UK Government is entitled to a half share of scheme surplus—a so-called 50:50 share with the scheme members.
The fund has four notional sub-funds. The “guaranteed fund” provides inflation-proof pensions to former mineworkers and their dependants. There is an investment reserve, based on the £1.2 billion surplus that was bequeathed from British Coal days. Two other components complete the arrangements: a bonus augmentation fund for payments to members, and a guarantor fund, from which the UK Government’s share of benefits are derived.
I recognise that the scheme trustees would have welcomed the guarantee, which permitted an investment strategy seeking higher returns. It has benefited members through bonus payments over years. However, at the time that the arrangements were entered into, it was estimated that the surplus might amount to £2 billion over the course of a quarter of a century. In reality, the UK Government’s dividend amounts to more than three times that figure. In the unlikely event that the guarantee is ever called upon, it is expected that the risk to the taxpayer would fall well short of what has already been paid in.
I have read the report of the Business, Energy and Industrial Strategy Committee, which, as members are aware, sets outs key recommendations in relation to the arrangements that were entered into in 1994. The committee describes the 50:50 arrangements as “arbitrary”, as it found that no substantial contemporary assessment had been undertaken. They are also quite exceptional.
I agree with the findings of the committee, in particular, about the future division of surpluses. There is a strong case for a more equitable distribution of surpluses to scheme beneficiaries—many of whom are on low incomes—through an arrangement that better reflects the risks of scheme management and assurance. One of the committee’s key recommendations is to turn over the investment reserve to pensioners, which is a step that could have a material impact on thousands of low-income households.
The UK Government has rejected the recommendations and has set out that it continues to believe that the arrangement that was
“agreed in 1994 was fair and beneficial to both Scheme members and taxpayers”.
The chair of the select committee has understandably responded in strong terms, asking the UK Government to reconsider. The scheme trustees are also disappointed and, given that they consider the guarantee to be essential to the operation of the scheme, they must feel that they have little scope for alternative action. That is a crucial point to make with reference to what Mr Lumsden said, because the UK Government might say that its door is open, but, if it will engage in conversation only under the condition that the guarantee is to be removed, that is not openness or transparency and that is not engagement. That is what needs to change.
The National Union of Mineworkers has also called for a more balanced approach to the distribution of funds and the investment reserve. As I said, I note the UK Government’s position that ministers are open to further dialogue with trustees and to an arrangement that sees the scheme retain 100 per cent of surpluses. However, that appears to be entirely conditional on removing the guarantee, and that is not a genuine offer. It places the trustees in an invidious position, so it is not acceptable.
The UK Government has been a substantial beneficiary of the arrangements for a quarter of a century. The time for it to stop taking and to do the right thing is long overdue. That is why, as members will be aware, I am writing to the UK Government and the trustees of the mineworkers pension scheme, asking that the arrangements be reviewed so that former mineworkers can, in retirement, be properly recognised for the work that they undertook, on behalf of all our countries across the UK, for many years.
Those discussions should be transparent, should include expert input from actuaries and should have the interests of pensioners at their centre. Action should be taken as soon as possible.
I sincerely hope that the concerns of many on this issue are heard by the UK Government and that the recommendations are given full consideration in mutually supportive discussions. I call on Parliament to support the recommendations of the select committee, and I again thank Christine Grahame for bringing this important issue to the chamber.
That concludes the debate. I suspend the meeting until 2.00 pm.
13:34 Meeting suspended.Previous
First Minister’s Question Time