Industry minister Sarah Jones has promised to “shortly” make a recommendation to the Treasury on whether to hand over a £2.3bn investment reserve to the British Coal Staff Superannuation Scheme. Reform MP Lee Anderson, a member of the scheme, has called for the release of the reserve in parliament.

The BCSSS trustees, chaired by Cheryl Agius, met with the minister on 11 June following meetings this year and last, and are due to meet her again in July. They are asking the government to agree to transfer the entire £2.3bn investment reserve to the scheme with its 45,000 members “as soon as possible this year”, and to make a commitment to review how any future surplus is shared.

Last October, the government transferred a £1.5bn investment reserve to the Mineworkers’ Pension Scheme to fulfil a manifesto commitment, resulting in an average pension increase of £29 a week per member. It also promised to review the MPS’ 50/50 surplus sharing. It has not yet decided whether to give the BCSSS reserve to the 45,000 members, but in January, energy and climate change secretary Ed Miliband said the BCSSS issue needed to be remedied.
   

   
At the meeting this month, Jones told the BCSSS trustees that she expects to make a recommendation to the Treasury “shortly”, in consultation with the trustees. Government Actuary analysis found the £8.5bn scheme to be in a strong financial position, according to the trustees and Jones.  

A parliamentary debate was also held about the BCSSS on 11 June, secured by Lee Anderson MP, who as a scheme member has an interest in the reserve being paid out.  

The MP for Ashfield spoke at length in favour of releasing the money, saying: “There is a very simple solution to all this. Just give us our money back—it is our money—and let us discuss the future surplus sharing agreements. We ex-miners should not be a cash cow for the Treasury.”  

Jones said she wrote to the chief secretary to the Treasury in February and secured his agreement to undertake a review of the BCSSS, which is now underway.  

She did not commit to anything. With the coal industry having two DB schemes, instead she stressed that “the schemes are not identical. They are different, and the main difference is that there are currently no surplus sharing arrangements in the BCSSS. That is because they were removed in 2015 following two deficit valuations.” 

She said at the time, members were unlikely to realise any increases to their pensions for a decade or more, and the government risked having to find new money to fund pensions.  

“Changes were therefore made, and an agreement was reached with the then government that bonus pension increases would be paid for three years and that the scheme would invest so as to ensure that pensions could be paid, with the aim of returning the reserve to the government in 2033,” she explained. 

However, at the meeting with the trustees she committed to move at speed and her officials are due to meet the Treasury on 12 June, with a recommendation being made to the chief secretary to the Treasury. 

Jones said: “I would not want to give the impression that this decision is waiting on the chief secretary to the Treasury to say yes. That is not the case. We have to go through the correct processes to get it over the line, because it was not in the manifesto; it is a different scheme, and we must go through the proper processes.”  

Under the agreement made when British Coal was privatised in 1994, a Crown guarantee was given to the two pension schemes under which, as well as having to fill any potential deficit, the Treasury gets half of the surplus. This differed from agreements with others schemes such as the BT Pension Scheme, which was given a Crown guarantee without surplus sharing.  

The UK government has received £3.1bn from the British Coal scheme and £4.8bn from the MPS since it started backing the two schemes. Ending the surplus sharing with BCSSS in 2015, it is still due a payment of £1.9bn from the scheme in 2033. 

Previous governments have justified not sharing the reserve by saying it was only accumulated thanks to the Crown guarantee. The guarantee allows the schemes to take more risk in their investment strategy than most DB schemes, with BCSSS reporting exposure to assets such as special situations debt, high yield bonds and hedge funds. 

Commentator John Ralfe has been one of the fiercest critics of Labour’s MPS transfer to former miners. Writing in the Telegraph in November 2024, he stressed that MPS pensioners had received all benefits promised to them under the scheme rules. 

What is your view – should the Treasury transfer the investment reserve to the trustees?