£1.5 Billion Coal Pension Concession: Sentiment Over Sense?

Energy Secretary Ed Miliband has waived the Government’s right to £1.5 billion from the surplus of the Mineworkers’ Pension Scheme (MPS) — a move critics say reflects ideological sentiment more than economic logic.

🔍 Background

  • The MPS was created in 1952, later supported by a Government guarantee in 1994 during coal privatisation.

  • Under this deal, any surplus was split between miners and the Treasury. That guarantee was never called upon.

  • Thanks to strong investment returns and the guarantee, miners’ pensions today are ~33% higher than they would have been otherwise.

⚠️ Critics Say:

  • No injustice occurred — the deal worked as intended.

  • The demand for full surplus repayment is likened to asking for 20 years of insurance premiums back after never making a claim.

  • Miliband’s £1.5bn giveaway is seen as a symbolic tribute to Labour’s historic ties to the miners, not a rational financial decision.

  • The Treasury has received £4.8bn from MPS since 1994 — and another £3.1bn from a related staff scheme. Should that also be returned?

💬 Quote

“The real injustice is that all of us are now paying over a billion pounds in the service of a Left-wing vision of Britain’s post-war history.”