More than 100,000 former mineworkers, including those who worked in the Gwent coalfields, will receive £1.5 billion that was kept from their pensions, it was announced in the budget.
Following the announcement, Energy Secretary Ed Miliband confirmed the move will mean a 32 per cent boost to the annual pensions of 112,000 former mineworkers – an average increase of £29 per week for each member.
Nick Smith, MP for Blaenau Gwent and Rhymney, who has long campaigned on this issue, said: “I come from a family of mineworkers; I know how important it is to put this right. This is why I’ve campaigned for so long on this issue.
“Today’s announcement will make a big difference to so many people across our valleys and is another example of our Labour Government putting our principles into action to improve lives.”
The investment reserve fund was set up using profits from the scheme in 1992, to provide a buffer in case the Mineworkers’ Pension Scheme went into deficit. This money was due to be returned to government in 2029.
But the fund - now worth £1.5 billion – will be handed over to the pension scheme, ensuring former pit workers get the rewards from their labour.
When British Coal was privatised in 1994, the government also agreed to take half of any profits generated by the pension scheme, in return for a guarantee that pensions would increase in line with inflation.
The scheme has continued to produce strong returns and the government has never paid any funds into it. The government is to review this agreement to ensure former miners and their families get a fairer deal in the years ahead, with next steps set out in the coming months.
Energy Secretary Ed Miliband said: “We owe the mining communities who powered this country a debt of gratitude.
“For decades, it has been a scandal that the government has taken money that could have been passed to the miners and their families.
“Today, that scandal ends, and the money is rightfully transferred to the miners. I pay tribute to the campaigners who have fought for justice- today is their victory.”
The trustees are working at speed to deliver the bonus into pension pay packets from November this year.
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