Government Holding Talks With Labour MPs After Miner Pensions Backlash
4 min read
The government is holding talks with Labour MPs from former mining seats to reach an agreement on transferring pension funds.
Chief Secretary to the Treasury, Emma Reynolds, told PoliticsHome podcast The Rundown on Thursday that ministers were "working closely" with backbenchers after a row broke out on the eve of the Budget on Tuesday night over the status of the funds.
In his Budget speech on Wednesday, Chancellor John Healey pledged the “full transfer of the Guarantor’s Fund”, believed to be worth £1.2bn, and promised to end the “standstill arrangement”, ensuring the pensions continue to rise for former miners.
“For ex-mineworkers, I'm guaranteeing that every penny of the pension fund surplus now goes to miners. I know the job's not done, and I will go on to ensure the full transfer of the guarantors' fund,” Healey told MPs yesterday.
The night before, a group of Labour MPs expressed fury after being told that the government planned to renege on a pledge to transfer what remains of the Mineworkers' Pension Scheme.
As reported by PoliticsHome on Tuesday evening, the MPs made urgent representations to No 10, the Treasury and the whips in an attempt to persuade the government to rethink.
Normanton and Hemsworth MP John Trickett told PoliticsHome on the night: “We owe a moral duty to the miners and the government must show that it has listened, understands and will act in this matter. Nothing less will do.”
PoliticsHome understands that Blair McDougall, the reindustrialisation minister, met MPS trustees on Wednesday morning, just hours before Healey made his House of Commons statement, where he agreed to change course.
The saga dates back to 1994 when British Coal was privatised and ministers agreed that the government would act as guarantor for its pension payouts.
Former chancellor Rachel Reeves ended the 30-year-old arrangement in her first Budget in 2024, transferring part of the fund (£1.5bn) to members.
Despite Healey's words on Wednesday, Labour MPs and MPS trustees say there are still question marks over the remaining funds.
Gary Saunders, chairman of the trustees, told PoliticsHome he was “very disappointed” that government had withdrawn a draft deal hours before the Budget, despite it being “ready to sign”.
Allen Young, speaking on behalf of the MPS elected trustees, added: “One month ago, the Chancellor said that miners’ lamps are a symbol of hope, but today (Wednesday) he confirmed that there is still no light at the end of the tunnel for MPS members.”
The Coalfield Group of Labour MPs have written to Healey demanding the immediate release of the £1.2bn fund.
Signed by MPs including Luke Akehurst, Rachel Taylor and group chair Grahame Morris, the letter urges Healey and Prime Minister Andy Burnham to “prove to miners and their families that this Labour government is on their side”.
“Since 1994, the government has taken more than £4.4bn from the MPS in return for a guarantee that has never cost the public purse a penny,” the MPs write.
“We understand the fiscal pressure of the Treasury, however, in light of the facts, we cannot see a justification for withholding the money that belongs to scheme members alone.”
The MPs welcomed the commitments to end surplus sharing and the standstill mechanism, but criticised the Treasury for only changing its position after sustained pressure from coalfield communities and their representatives.
In her interview with The Rundown, which will be published on Friday, Reynolds said: “This government has done more than any other government to do right by our mineworkers. Rachel Reeves in 2024 took the decision to return the investment reserve to the mineworkers, which was the right thing to do.
“Yesterday, we took the decision, and John Healey took the decision, that any surplus going forwards of the pension scheme shouldn't be a fifty-fifty split between government and the mineworkers, that a hundred percent of that surplus should go to the mineworkers.
“We have also got rid of the standstill clause, which essentially means that their pensions will continue to rise. It protects their pensions, so it means their pensions will not fall."
The minister continued: “We still have the outstanding issue of the guarantor’s fund, which we're working closely with Labour MPs on.
"We were not able to do that transfer yesterday, but John Healey said on the floor of the House of Commons in his Budget speech, we are committed to making further progress on that.”
Additional reporting by Alain Tolhurst
