Great pension robbery
Miners have been deprived of part of their ‘deferred wages’. David John Douglass exposes the actions of successive governments
A pension is a recognition that workers who have invested their life, skills and in our industry often flesh and blood need to be sustained when they have given their all and reached retirement age. 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 not a gift: it is part and parcel of the workers’ wages, part of their terms and conditions, given in exchange for their labour. It is a deferred part of their wage. In the coal mining industry after 1975 it was a condition of employment.
The employer sets aside a pension fund, strictly 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. 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) was introduced in 1975, we were invited to contribute directly from our weekly earnings to boost the level of pensions we would receive. So, for every £1 the employer paid in, we also paid £1. This was all still our money. The MPS investment was 100% our deferred wages. It was never 50% theirs and 50% ours: it was all ours. The clue was in the title: Mineworkers Pension Scheme.
After the defeat of the 1984-85 Great Strike mines started to close rapidly. Redundancy payments accounted for a sudden black hole in National Coal Board 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 having crippled miners’ hands and lungs.
It was at this time that the Coal Board launched the first of its pension raids. This took the form of breaching our contract of employment (the MPS was a condition of service: ie, it was not a voluntary scheme) by withholding its 50% contribution: that is, the money we 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 £5 billion was creamed off during that time.
How and why the trustees of the scheme allowed this to happen is a mystery and a scandal to this day. That it was immoral is without doubt and that it was unlawful is a racing certainty in my view. For the record the National Union of Mineworkers as an organisation loudly condemned the raid, with Arthur Scargill (still NUM president at that time) pointing out that the money the NCB/BCC were pocketing was the miners’ deferred wages and was never theirs to withhold. The fact that they used the miners’ own money to pay for the injury and death inflicted upon us over a lifetime’s labour in the mines, or to pay us to accept closures and the decimation of our communities, is a crime as great as any committed by the blood-soaked coal-owners of old.
In 1994, after John Major’s and Michael Heseltine’s closure programme, came the privatisation of the coal industry. The bulk of the mines were bought en bloc under a scheme which by law guarantees that the terms and conditions under which the miners worked for the NCB/BCC had to be carried over to the new employers. That included our MPS. However, the new coal-owners told the government they would not buy the mines if they came with the MPS as an ongoing cost. The government then stepped in as the representative of the former NCB/BCC and ostensibly took its place.
But the truth is, they were not protecting the terms and conditions of the remaining miners at all. The scheme as a contributory fund came to a halt, with neither the new owners nor the government paying into it. It was frozen for new contributions. However, overall the scheme was in a strong financial situation, with a wide range of investments that provided annual returns boosting all the now deferred pensions, as well as those already being paid.
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 let us be quite clear: the obligation to provide one fell squarely on the shoulders of the government, which had created the situation by sailing us off on our own. It then insisted on a 50% share of all the miner’s investment profits, without the slightest moral or financial justification.
If the government was proposing some joint business investment which allowed them to share 50% of our returns, they would have had to match the value of the investment we had already made - directly through our wages and indirectly through our 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 we develop a financial ‘safety net’ - a contingency fund which was ring-fenced for any sudden drop in investments. That was our own money, not theirs. They were safeguarding themselves against ever having to pay anything out in return for the vast sums they had started to draw 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, for instance. This was never ‘an agreement’: it was from the word go a ‘take it or leave it’ imposition. To date we have paid them £4.5 billion, without it costing them 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!
We have heard a lot about the pensions ‘surplus’, but we should be clear that this is the money which remains from investment returns after pensions have been paid. It is only ‘surplus’ because the level of payment is too low. The short way to solve the government’s theft of the ‘surplus’ is for there not to be any! Increase the regular pension we receive.
We have been kicking up hell about this for years, through mass petitions, demonstrations, conferences and trying to nail down any MP who would listen to our arguments. This finally started to win through this year 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, taking evidence from far and wide (including my own).
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 - a lifeline to many miners’ families. The clear conclusion of the committee was that we should not be contributing anything towards a fund guarantor, as this was the government’s obligation. My understanding is that all the moneys wrongly taken ought to be repaid into the fund.
Great excitement was generated in the socially deprived coalfield areas, and chinks of light appeared to be breaking through. After all, Boris, 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 we were optimistic.
However, energy minister Anne-Marie Trevelyan slammed the door shut, saying the scheme was fair to both “the members and the taxpayers”. She forgets that we have paid tax all our working lives, that we 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 tells us we have the right to benefit, but “the government has taken on all the risk”.
Government risk? Pardon me, Anne-Marie Trevelyan, but, when the cage was hurtling down the shaft at Markham Main in 1973 with the afternoon shift on it and 13 were killed, we did not notice any risk for the government. Neither did the government experience any risk when miners drowned, were buried alive or blown to kingdom come. I do not know how she has the brass-neck cheek and ignorance to say such a deeply offensive thing, Only the miners experienced risk to accumulate this money, not governments.
Then we have the Department for Business Energy and Industrial Strategy telling us that the fund is 30% better off as a result of the government underwriting it. Firstly, that is a figure plucked from space, but, even if it was true, it was the government which closed down NCB/BCC and left the vacuum. The government created the need for a guarantor and is duty-bound, having created the uncertainty in the first place, to underwrite it.
Now is the time for justice and to set right this great wrong.