The Great Miners’ Pension Robbery

Written by Gerard Darcy

Please note, this article is entirely based on Dave Douglas’ work. Dave is a former Miner and NUM official (from the NE), now retired. But, he’s still active and standing as a trustee of the Miners’ pension fund. We wish him well and success in his endeavours – he’s on Facebook


Pensions are just a recognition that workers who have invested their life, skills in their industry and often their flesh and blood need to be sustained, so when they have given their all and reached retirement age, their pensions are simply deemed as “deferred wages”.

In many cases, the employer sets aside a weekly sum of money, based on the years of service, to look after the workers when they reach the end of their working life. This is a right and was not a gift: it is part and parcel of the workers’ wages, part of their terms and conditions, given in exchange for their labour – the “deferred part” of their wage.

A Brief History Lesson

In the coal mining industry after 1975, a pension was a condition of employment. So the employer, in this case, the NCB (National Coal Board) set aside a pension fund – separate, ring-fenced and distinct from business operations. It is illegal – not to say immoral – for any company or employer to abuse the workers’ trust and that pension fund – think about Robert Maxwell’s crimes. It does not belong to the employer: it is the workers’ accumulated wages, set aside for their retirement. When the modern draft of Mineworkers Pension Scheme (MPS – introduced in 1975), miners were invited to contribute directly from their weekly earnings to boost the pensions, they would receive. So, for every £1 the employer paid in, they also paid a £1. This was all still their money. The MPS investment was 100% our deferred wages. It was never 50% theirs (NCB) and 50% miners: it was all for the miners. The clue’s in the name: “Mineworkers Pension Scheme.”

After the defeat of the 1984-85 Great Strike the mines started to close rapidly. Redundancy payments accounted for a sudden black hole in NCB finances, now that there was less coal and less profit to pay for them. The renewed war on the mines began in 1992 and after another year of resistance, many of the miners were bought out of resisting closures by enhanced redundancy terms.

At the same time big compensation claims were being won in the courts and the NCB/ British Coal Corporation found itself with huge bills to pay for crippled miners’ hands, lungs and lives. It was at this time, that the Coal Board launched the first of its pension raids. This took the form of breaching the contract of employment (MPS was a condition of service: i.e. it was not a voluntary scheme) by withholding its 50% contribution: that is, the money that miners had already worked for. In 1987, they took a ’pensions holiday’ and stopped the payment of some £870 million for three years. There were more pension holidays in 1991 and 1994 and a surplus of over £5bn was creamed off during that time. These “pension holidays” are only on the employers’ side and many have been taken elsewhere in local government and other public sector pension schemes – it’s simply a way for employers to dodge their obligations as employers. 

As usual, disinvestment in the pension scheme began under the Tory government of the late 1980s.

‘Guarantor’

A fear was floated that the MPS and the miners were now on their own: should the scheme fail, or our investments flounder, the miners would lose all or part of our pensions. The fund needed a ‘guarantor’, who would help the fund ride out any trough and allow it to recover. But, the obligation to provide one fell squarely on the shoulders of the government, which had created the situation by leaving the miners on their own. It then insisted on a 50% share of all the miner’s investment profits, without the slightest moral or financial justification.

Let’s be clear – If the government was proposing some joint business investment which allowed them to share 50% of the returns, they would have had to match the value of the investment the miners had already made – directly through their wages and indirectly through their deferred wages/pensions. They could then justify taking half of any profit. But the truth is, they had not paid a penny into it. Yet, just to be sure it would not cost them anything, they insisted that the Miners’ develop a financial ‘safety net’ – a contingency fund ring-fenced for any sudden drop in investments. That was the Miners’ own money, not theirs. They were safeguarding themselves against ever having to pay anything out in return for the vast sums they had drawn out.

Again, one wonders why the trustees were not challenging such an unprecedented piece of financial skulduggery – a burden not imposed on any civil servant, police or Post Office pension fund (yet). This was never ‘an agreement’: it was a ‘take it or leave it’ imposition. Miners have heard a lot about the pensions ‘surplus’, but this should be clear that this is the money which remains from investment returns after pensions have been paid. It is only ‘surplus’ because payments are too low.

The short way to solve the government’s theft of the ‘surplus’ is for there not to be any! So, increase the regular pension, the miners actually receive. Miners have protested about this for years, through mass petitions, demos, conferences and trying to nail down MPs who’d listen to their arguments. This finally started to win through this year (2020) and, since the government could stand the stink of it no longer, they allowed an all-party parliamentary committee to set up a national public enquiry.

This examined in detail the whole history and financial operation of the scheme. The report which resulted was unanimous: there was not and never had been any justification for a government of any hue taking money from the miners’ pension investments; that the responsibility for securing the fund lay unconditionally with the government; that governments cannot make financial and commercial profit from state employees’ pension investments.

The committee went on to point to the £1.2 billion ‘reserve fund’ and how unlikely it was that it would ever be needed, given the rapidly declining number of miners week on week and the good health of the pension investments. This fund should at once be paid back into the miners’ operating fund to raise the pensions of miners and their widows by an average of £14 a week – which would be a lifeline to many miners’ families. The clear conclusion of the committee was that Miners should not be contributing anything towards a fund guarantor, as this was the government’s obligation. The Miner’s union’s understanding is that all the monies wrongly taken out ought to be repaid into the fund.

The Johnson Government and its response

As usual, the PM wrote cheques that quickly turned worthless

Great excitement was generated in the socially deprived coalfield areas, and chinks of light appeared to be breaking through. After all, Boris Johnson, in response to a direct question at a public meeting, assured those listening that all money wrongly taken from the miners’ pensions would be repaid. The findings of the all-party committee could not have been better, and the miners were optimistic. However, the current Conservative Energy Minister Anne-Marie Trevelyan slammed the door shut, saying the scheme was fair to both “the members and the taxpayers”. She forgets that Miners have paid tax all their working lives and continue to pay tax on the pension, and that the money she is talking about was not raised and invested by random “taxpayers”, but exclusively by the miners! In an unbelievable burst of arrogance, she told them that they have the right to benefit, but “the government has taken on all the risk”.

Simply put, only the miners experienced the risk to accumulate this money, not governments. Then, the Department for Business Energy and Industrial Strategy tells the Miners that the fund is 30% better off as a result of the government underwriting it. Firstly, that’s a figure plucked out of the air with little or no basis. But, even if as true, it was the Tory government which closed down the NCB/BCC and left this vacuum. The government created the need for a guarantor and is duty-bound, having created the uncertainty in the first place, to underwrite it.

To date, retired miners have paid the government £4.5 billion, without it costing them (HMG) one penny. Combined with the previous ‘contribution holiday’, this comes to a total of £9.5 billion. So the miners and dependants are owed £9.5 billion by the government! Now is the time for justice and to set right this great wrong.

What you can do:

  1. Phone or Write to your local MP – c/o The House of Commons, see details below. 
  2. Lobby the Labour Party to correct this historic wrong
  3. Watch for any updates on this campaign and get involved