The following amendment has been selected: amendment 1 in the name of Paul Davies.

The next item is the next Plaid Cymru debate on the mineworkers’ pension scheme, and I call on Steffan Lewis to move the motion.

Motion NDM6146 Rhun ap Iorwerth

To propose that the National Assembly for Wales:

1. Notes that the UK Government is reported to have received £8 billion from the Mineworkers’ Pension Scheme (MPS), in accordance with current arrangements which sees it receiving 50 percent of the MPS surplus, and further notes that the UK Government received £750 million in surplus payments in 2014 alone;

2. Calls for a review of the fifty-fifty surplus sharing arrangement between the UK Government and MPS, as advocated by the National Union of Mineworkers.

3. Calls on the Welsh Government to work with other devolved administrations, and local and regional leaders in England, to secure a UK Government review of the MPS surplus arrangements and to seek a continuation of the UK Government to act as guarantor of the MPS.

Motion moved.

Diolch, Lywydd. I’m pleased to move the motion laid in the name of Rhun ap Iorwerth. The issue of the mineworkers’ pension scheme surplus forms part of an unholy trinity of miners’ injustices, along with past state brutality and the intentional de-industrialisation of their communities. But I hope that all Members on all sides can agree that the motion before us today is not controversial and simply seeks to address an injustice that occurs every day of every week.

The MPS closed to new members in the mid-1990s, with the number of scheme members declining from 700,000 in 1960 to around 200,000 last year. It is a scheme that includes an investment reserve valued at over £1 billion and a bonus augmentation fund, and, in addition, the sum of all expected future benefits is expected to be worth some £19 billion. Under an agreement reached in 1994, the UK Government guarantees the solvency of the scheme, with the exception of the bonus augmentations, and the annual indexation of guaranteed pensions, in line with price inflation.

The Deputy Presiding Officer (Ann Jones) took the Chair.

When the agreement was reached to split the fund’s valuation surpluses 50/50 between the fund and the UK Government, no-one expected the fund to perform as well as it has—no-one anticipated that the UK Government would have benefited to the tune of more than £3.5 billion, gobbled up for general Government spending. Indeed, at the turn of the millennium, the Coalfield Communities Campaign said:

‘The guarantee was struck on actuarial advice. Hindsight may have shown that the advice was too cautious but that is now history.’

The point is that the funds are in a robust financial position and, under the current arrangements, the Government has no real liability.

Indeed, the National Audit Office in England has estimated that over a 25-year period, the UK Government can expect to reap £8 billion in surplus payments from the fund. In 2014 the Treasury received £750 million, and last year saw a further £95 million taken as part of the surplus split.

It is argued that the UK Government’s share of the surplus is justified because it acts as the guarantor, but in effect, Dirprwy Lywydd, the UK Government’s potential exposure is accounted for by an existing triple lock—the surplus payments themselves, the value of the investment reserve and the fact that the Government does not guarantee the bonus augmentation element.

So, surely, any fair-minded person absorbing these facts will conclude that the current arrangements regarding the surplus do not rightly balance fairness for retired miners and the potential exposure of the taxpayer. Plaid Cymru’s motion today comprises two primary principles: first, that we support the National Union of Mineworkers’s calls for a review of the pension’s valuation surplus; secondly, that we mandate the Government of Wales to build alliances with other devolved administrations and regional leaders in England so that pressure can be brought to bear on the UK Government to deliver that long-overdue review of the MPS surplus. This is not about reviewing the MPS in general or reconsidering the UK Government’s role as guarantor and, for that reason, Plaid Cymru will not be supporting the Conservative amendment today. This is strictly about delivering justice as far as the surplus is concerned.

Dirprwy Lywydd, I was born during the miners’ strike of 1984-5 and I’m just the second generation in my family not to have worked underground. I know many here lived through that event and, indeed, were directly involved and impacted upon. The legacy of our industrial heritage lives with all of us today, regardless of our age or background, but with no group more so than former miners, who are today pensioners. A famous slogan of that strike was, ‘The miners united will never be defeated.’ Llywydd, if this Assembly speaks with one voice today, if it is united, it could provide a mandate for our Government that might—just might—result in a long-overdue victory for miners and their families. Diolch.

Diolch. I have selected the amendment to the motion. I call on Paul Davies to move that amendment 1 tabled in his name. Paul.

Amendment 1—Paul Davies

Add as new point at end of Motion:

Recognises that the presence of the guarantee has enabled the trustees to invest in a way that has generated surpluses and as a consequence bonuses to members.

Amendment 1 moved.

Thank you, Deputy Presiding Officer. I’m pleased to take part in this very important debate today and I move amendment 1 tabled in my name.

Of course, securing and protecting pensions is of the utmost importance to ensure that people are rewarded and not disadvantaged following the end of their careers. Therefore, it’s important that former mineworkers’ pensions are protected and that any arrangements with the UK Government are appropriate, transparent and fair. Now, the National Union of Mineworkers inform us that about 25,000 miners are thought to be in receipt of this pension in Wales, and so it’s right that we are discussing this very important matter this afternoon. I’m sure Members in this Chamber will all agree that the viability of this pension scheme is essential in order to ensure that those former mineworkers receive the financial security they deserve and are entitled to. It’s crucial that a pension scheme of this nature is guaranteed by the UK Government and I understand that, over the years, the guarantee has given the trustees the freedom to invest in a more varied way, and, as a result, the scheme has seen substantial surpluses and the UK Government has not yet had to inject funds into the scheme to ensure that former mineworkers receive their pension. And of course, I would assume that the fact that the UK Government has not had to inject funds into the scheme demonstrates that the pension scheme is successful and has been successful over the years. It clearly functions above its intended monetary remit and it seems to me that the trustees are making good decisions when it comes to investments within the scheme.

However, I very much agree with point 3 of this motion, which strongly argues for the continuation of the UK Government to act as a guarantor of the scheme. It’s quite clear that the existence of the guarantee enables the trustees to pursue a more varied investment strategy, and a significant proportion of the scheme’s assets remain invested in equities. For that reason, I hope that Members would support our amendment to this debate, which seeks to strengthen today’s motion.

I very much understand the widespread calls for a review of the current arrangement with the UK Government, and that is something that we on this side of the Chamber support in order to ensure that former mineworkers receive an appropriate proportion from the pension scheme and that it adequately serves the needs of former mineworkers, and that it’s fair. Therefore, we support point 3 of the motion, which calls on the Welsh Government to work with other devolved administrations and local and regional leaders in England to secure a UK Government review of the mineworkers’ pension scheme surplus arrangements. I understand from news reports that the Welsh Government has already made representations to the UK Government on this matter, and I’m sure that the leader of the house will update us on the Welsh Government’s progress and, indeed, position in responding to this debate.

With regard to point 1 of this motion, I understand that there are different interpretations over the amount of money received by the UK Government under the current arrangements, but whatever the figures are, it’s quite clear that the UK Government has received substantial amounts of money, and that’s why we believe it is appropriate that a review takes place. It’s important that this review offers the opportunity for this matter to be publicly scrutinised, given the large sums of money involved, but the principle of the UK Government continuing to act as a guarantor is an important one, and that role must continue. Therefore, the purpose of our amendment is to simply strengthen the motion and to recognise the importance of the guarantee and the UK Government’s essential role in this scheme.

So, Dirprwy Lywydd, in closing, the Welsh Conservatives support the calls for a review of the surplus arrangements of the pension scheme, and we are happy to support any representations made to the UK Government on this matter. I urge Members to support our amendment and work together to deliver the best possible outcome for former mineworkers from their pension scheme.

I come from a very similar community to Steffan Lewis, not so far away, and as a representative of a former mining community, I welcome the chance to take part in this debate and welcome the issues that Steffan Lewis raised. I, too, was very disappointed when the UK Government announced that it would not proceed with a public inquiry in the battle of Orgreave, and reviewing the arrangements of the miners’ pension scheme gives us the opportunity to right another injustice towards the miners by giving them a fair deal on their pension and improving their livelihoods.

Many of us here today, particularly those of us who grew up in mining communities, will remember the way that our industry shaped our localities and continues to do so. Many of us will also remember the miners’ strike—and I do remember it—over 30 years ago and the effect that it had on the people who worked in the industry and their families. I’ll be 40 next year, but I remember—my father was a Rhymney valley district councillor, and I remember at the time feeling the incredible injustices of friends of mine in school on dinner tickets because their parents were on strike, and the difficulties and divisions that this caused in the school in which I grew up. I was fortunate my father didn’t pursue his career option to be a mining engineer and instead went into teaching, but that could just as easily have been me.

We cannot change the attitude that the Government at the time took towards coal mining, but we can do our bit to hold the present Government to account and make sure that they give our miners a fair deal. Many hardworking miners paid into their pension pot in good faith, in the expectation they would get a decent income in retirement, and the privatisation of the coal industry has put this in jeopardy, with the National Union of Mineworkers assisting many who are on benefits because of low pensions, and that can’t go on. There’s no need for the UK Government to carry on taking 50 per cent of the miners pension fund surplus now that deep mining has ended in the UK.

I fully support the Welsh Government and the NUM and, indeed, Steffan Lewis and his calls for a review of the pension arrangements while maintaining the UK Government guarantee. Our former miners worked hard for many years in potentially dangerous conditions. Many of them have developed associated long-term health problems and need support in their lives. I don’t feel that Paul Davies’s amendment adds anything to the substance of the motion, and therefore I’ll be supporting the motion only today. The least we can do is to support miners in getting a better deal and we can start by pushing the UK Government to review the pension arrangements to make sure there’s a fairer split between the Government and the miners.

I commend Plaid Cymru for bringing this motion before the Assembly today and for the way in which Steffan Lewis introduced the debate. I have to declare an interest, because my mother is a pensioner under the sister scheme, the British Coal staff superannuation scheme, and I’m well familiar with the arrangements of the mineworkers’ pension scheme itself. I believe that there are injustices in the current situation that need to be corrected. As Paul Davies pointed out, 25,000 Welsh miners are currently in the scheme, and they’ve all paid in to get the benefits that they are drawing—5.5 per cent of salary. So, this isn’t an act of charity in any way, shape or form, it is a contractual benefit.

The guarantee that the Government gave on privatisation of the industry does have a value and of course it is right that any surplus should be shared with the Government, but the 50/50 split now looks very far from the definition of fairness. That guarantee has never actually been called upon, and I think it’s very unlikely that it ever will be called upon, because actuarial valuation is not exactly an exact science because you’re projecting ahead for many decades, very often, and making assumptions about interest rates, but we know that interest rates are now at record lows and can’t actually go very much lower. So, it’s likely that, in future, any increase in interest rates will substantially reduce the potential deficit and increase any potential surplus in the scheme. So, that means that the value of the Government’s guarantee in cash terms is very much less than might have been anticipated at the time that it was undertaken. And in those circumstances, it must be right for the current split of 50/50 between the beneficiaries of the scheme and the Government to be reconsidered. The Government has drawn already nearly £3.4 billion out of the fund since 1994. That’s a very, very substantial return in exchange for a guarantee that has never actually been called.

The £8 billion referred to in the motion actually refers to an estimate of what the Government is likely to gain from the scheme, which was arrived at by Binder Hamlyn for the period of 25 years from 2006, so we don’t actually know whether that figure is going to be realised. But, I think we can pretty well imagine that a very substantial sum of money is going to be taken from the scheme by the Government. As Hefin David pointed out in his contribution, there are lots of miners who currently are on very low pensions, and those could be substantially increased if that 50/50 split were to be changed, so, UKIP is pleased to support the Plaid Cymru motion today.

May I commend Steffan Lewis for bringing this debate to the house and for bringing the motion, which I support? I support the Welsh Government’s position and the calls of the NUM over many years for a review of the surplus sharing arrangement.

Parts of my constituency were built on the mining industry. Many, many people still claim under the pension as beneficiaries—people who’ve paid in for decades and whose hard work built the communities that I serve now in this place. They are people who deserve a fair pension settlement.

We welcome the guarantee. In these turbulent times in terms of pension valuations, clearly, the existence of the guarantee is a good thing. The question is: what price is paid for that guarantee? We’ve heard from the speakers already today about how small the cost of that is, in effect, to the UK Government. What we can’t have, or what is not defensible, is a formula that gives the UK Government a windfall on the back of miners’ pension contributions over decades. The arrangements should be sufficient to cover any cost to the Government, but no more than that.

So, it is time for a review. As Hefin David mentioned, there’s been no deep mining industry in the last 25 years; it’s a quarter of a century almost since the arrangements were agreed. There have been profound changes even since then in the mining industry. There will be no more calls for support and for subsidy for that industry. There was a time when the House of Commons debated subsidy to the mining industry as a matter of course, and I note the comments that Neil Hamilton made, which are at odds, really, with the approach he took at that time when he described support for the industry as the most expensive pit prop in history. So, I’m glad to hear that his thoughts have moved on since that time.

It certainly isn’t for miners to subsidise the UK Government, so it is time for review. May I just say, as I hope we get to a position where we do review those arrangements, those of us who attend miners’ welfare events and Coal Industry Social Welfare Organisation events will note that, nowadays, the majority of attendees are women rather than the miners themselves? I think we would do them a great service if, in the course of this review, we could look at the arrangements that we have in place to support the widows of miners who’ve given their lives to build our communities.

Thanks to Steffan Lewis for raising this very important issue and for bringing the motion to us today, which I fully support, and I also fully support the comments of the majority of colleagues who have spoken already in this debate.

As Steffan said, the issue does date back to 1994 when the John Major Conservative Government put in place the new arrangements that would underwrite the future loss, and we’ve already talked about that. In addition to the fact that the UK Government has already taken the estimated £8 billion out of the fund since its inception, pensioner miners will also remind us that the National Coal Board took pensions holidays for three years in 1987. They took further pensions holidays in 1991 and 1994, which delivered another £5 million on top of that for the Government.

What we can’t escape is the fact that this arrangement is part of an agreement that was concluded back in 1994. We’re not discussing the legality of such an arrangement, just whether it’s morally right for the Government to continue taking such huge sums out of the pension fund, when the fund has performed much better than anyone could have envisaged in 1994. Surely, therefore, it is right that the mineworkers should be the beneficiaries of this rather than the Government.

In considering this issue, like other colleagues I’m thinking about the contribution that coal miners and their families—many of whom were from my constituency—have made to the economy, the history and the heritage of Wales. They gave their all, many paying the ultimate price. ‘The hardest work under heaven’, as Michael Pollard referred to in his book, ‘Life and Death of the British Coal Miner’. And, for what? To find themselves crushed in 1985 by Thatcher and her acolytes, one of whom I’m afraid was Neil Hamilton at the time. In a vendetta against their union, the National Union of Mineworkers, or ‘the enemy within’ as the Tory Government of the time, including Neil Hamilton, preferred to call them.

As Hefin David said, the sacrifice of those who worked in the coal industry goes on for many miners whose health has suffered irreversibly as a result of working in an industry that was the lifeblood of many of our communities across the length and breadth of Wales. There were all too many that, as a result of the injuries suffered while mining our coal, have never benefited to any significant degree or even at all from the miners’ pension scheme. So, I am particularly pleased that we’re now considering this here in the Assembly as I know that the NUM in Wales has campaigned over many years, going back even to the pre-privatisation days, for a fairer distribution of the surpluses arising out of the scheme. They’ve lobbied consistently for a review of the 50/50 arrangement, and I would say that in this they have been ably supported by the MPS-elected trustee for the region, Mr Anthony Jones, a former miner at Betws colliery in Hefin’s constituency, and who has the wholehearted support of the south Wales NUM in this role.

Deputy Presiding Officer, an argument has been used by successive Westminster Governments that the surplus they take was needed to assist and to subsidise the coal industry. I assume that no-one here in this Chamber needs any convincing on how unsustainable such an argument is today, now that the British coal industry is virtually a historic relic of our industrial past. I hope therefore that every Member will be able to support the call to maximise the benefits available to those who are still able to draw a pension from the scheme and will vote in favour of this motion calling for a review of the arrangements.

Thank you. I call on Jane Hutt.

Dirprwy Lywydd, I’m very glad to have the opportunity to respond to this debate on behalf of the Welsh Government today and thank Steffan Lewis for moving this motion today, which we support. And I thank Members also for their contributions to this very important debate.

Of course, I need to state at the outset that pensions aren’t devolved and are matters for the UK Government. However, the Welsh Government acknowledges the need for proper, safe and well-managed arrangements for this pension scheme, particularly in the light of recent concerning events around large-scale pension schemes.

When we look at those who benefit, as of 30 September 2015, there were 162,684 pensioners and 37,807 deferred pensioners in this mineworkers’ pension scheme in the whole of the UK. In June of this year, 2016, approximately 22,000 former miners and coal industry workers in the scheme were from Wales. In recognition of this, the First Minister wrote to Amber Rudd, Secretary of State for Energy and Climate Change, on 22 June, on the mineworkers’ pension scheme, supporting the position of the National Union of Mineworkers in calling for a review of the funding arrangements.

It has been said in this debate, following the privatisation of the British Coal Corporation in 1994, that the UK Government provided a solvency guarantee to the mineworkers’ pension scheme that guarantees that basic pension entitlements will always rise in line with inflation and should not fall in cash terms regardless of the performance of the funds.

This motion seeks today to address the apparent unfairness of the current arrangements. The UK Government case is that the current division of surpluses between the membership and Government represents fair and reasonable recompense for taxpayers’ past investment in the schemes during the industry’s period of public ownership and for the risks they continue to bear through the Government guarantee, which will continue until closure of the scheme, expected to be in the 2070s. The guarantee arrangements that were negotiated at the time by the trustees, with the support of all the mining trade unions, gives scheme members the opportunity to share with UK Government in benefits of any periodic surplus in the scheme’s funds. In practice, I understand that this has meant that members enjoy bonus pensions worth almost 30 per cent of their index-linked benefits. It should be pointed out that the UK Government doesn’t make investment decisions; that is for the scheme trustees. But, in response to the First Minister’s letter earlier this year, the UK Government has indicated that, whilst they would consider any proposals, they appear not to have any plans to make changes to the current arrangements at this present time. So, this debate today and this call for a review are very important and timely and we have a strong message to send to the UK Government.

The heart of the matter in this motion is the question of the large surpluses that are generated, and there is a recognition from that that these need to be reviewed, as Members have so clearly identified. The mineworkers’ pension scheme has been a hugely successful scheme, generating substantial surpluses. It’s clear that the amount of money being taken out of the fund by the UK Government is in desperate need of a review. The funds in the scheme were earned by the miners themselves and should be used for the benefit of those miners and former employees of the mining industry, and indeed, of course, their families—those miners who, for over a century, were the backbone of British industry, many of whom sacrificed their health and, in too many cases, their lives for the benefit of Britain’s industrial prosperity. It’s only right, as Hefin David and Jeremy Miles have said, that we want to see the best for them for the debt we and the whole country owe them.

Dawn Bowden drew attention to the longstanding and ongoing campaign by the National Union of Mineworkers for a full review of the current arrangements, which we fully support. Of course, they’re not calling for an end to the Government guarantee—we must make that clear; they want to ensure that the way in which any surpluses are divided is fair and proportionate. The NUM has a just cause and made a strong case for review. The Welsh Government gives them our full support and supports this motion to ensure that this review is undertaken in full in terms of what the motion calls for, working with all those in devolved administrations who can make this happen. For the same reason, we oppose the amendment proposed by Paul Davies on behalf of the Welsh Conservatives.

Thank you. I call Steffan Lewis to reply to the debate.

Diolch, Ddirprwy Lywydd. I’d like to express my thanks to Members for their contributions today and to the leader of the house for her response. I thank Paul Davies for indicating that his group will be supporting Plaid Cymru’s motion today and congratulate him on taking a different view to his party’s Government in London.

Hefin David spoke eloquently of his memories of the 1984-85 strike and shared with us how life could’ve been very different and difficult for him and his family had his father made a different career choice. And he’s absolutely right, of course, to say that 30-plus years on from that strike, it is now time to address all injustices against the miners and their families, including the issue of the miners’ pension surplus. Neil Hamilton was right to point out that miners paid into this scheme, and it is not an act of charity for them to benefit from that scheme: the money belongs to miners and their families. Jeremy Miles put the key question, which is at the heart of this whole debate: what is it that is a fair price for the UK Government’s backing as guarantor of this scheme? And surely all of us agree that a 50/50 split is not a fair price, at least not for the miners and their families. Dawn Bowden was right to point out that this isn’t a legal matter; this isn’t a matter that is being contested legally, but it is most certainly a moral one.

I was thankful to the leader of the house for sharing with us the correspondence between the First Minister and the UK Government, and bitterly disappointed to hear the response of the UK Government to the First Minister’s representations. I hope that the very united voice of this Assembly today will aid the Welsh Government and the First Minister in future endeavours in relation to this matter.

In concluding, Dirprwy Lywydd, I want to thank and pay tribute to campaigning miners who’ve kept this campaign in the public spotlight, particularly those who’ve launched petitions that have received over 8,000 signatures. I want to thank and join other Members who’ve already thanked the National Union of Mineworkers, who’ve campaigned on behalf of mineworkers and their families, not just on this issue, but on many others, and who continue to support miners and their families on the range of challenges that they still face today.

Dirprwy Lywydd, former miners and their families and communities have endured deindustrialisation, disputes, pneumoconiosis, chronic bronchitis, osteoarthritis, vibration white finger and more as a result of their employment. When they were robbed of their jobs, an attempt was made to take away their dignity too, and, as they now enter their autumn and winter years, let us work together for them, in order to ensure them dignity in retirement, with justice in their pensions. Diolch yn fawr iawn.

The proposal is to agree the motion without amendment. Does any Member object? No. Therefore, the motion without amendment is therefore agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.