Friday 30 October 2026The Budget Economy

Are coalfield MPs right to demand the miners' pension surplus now?

In 30 seconds

The row

Coalfield Labour MPs say the 28 October Budget should have released the Mineworkers' Pension Scheme Guarantor's Fund, put at £1bn to £1.2bn. Ministers promised a full transfer but set no date, and no bonus pension will be paid this year.

The numbers

The scheme holds £10.4bn. The 2024 transfer of £1.5bn raised pensions by about £29 a week on average. The staff scheme got its full £2.3bn reserve at once last November, with its new bonus backdated to November 2024.

My verdictMostly right

Set a transfer date and backdate the bonus, as the staff scheme got. But the MPs should face the cost; the staff scheme's transfer was scored as almost £2bn of spending in one year.

Why

What happened

On 28 October Chancellor John Healey told the Commons that "every penny of the pension fund surplus now goes to miners". He promised to "ensure the full transfer of the Guarantors Fund".

The Budget document ends the 50/50 surplus sharing in place since 1994 and says the government will "work with the trustees toward full transfer" of the remaining fund. Budget-day reporting put that fund at some £1.2bn.

Trustees of the Mineworkers' Pension Scheme say officials told them before the speech that the £1bn of undistributed surplus could not fund a bonus pension this year. No bonus will be paid in 2026. Chairman Gary Saunders said he was "very disappointed" that a draft deal ready to sign was withdrawn.

Coalfield Labour MPs had learned on 27 October that ministers no longer planned to transfer what remains. They lobbied No 10, the Treasury and the whips. A week before the Budget, Mansfield MP Steve Yemm had set out the trustees' three asks in an adjournment debate. The MPs have since written to the Chancellor, and ministers are holding talks with them.

What's really going on

At coal privatisation in 1994 the government replaced British Coal as guarantor, promising that pensions would not fall in value. In return it took half of every surplus. That share sits in the Guarantor's Fund, one of four notional sub-funds inside a £10.4bn scheme.

Rachel Reeves moved £1.5bn to trustees at Autumn Budget 2024, which the Commons Library records as a 32% boost worth about £29 a week each. Last November she handed the smaller staff scheme, BCSSS, its full £2.3bn reserve in one go, for about 40,000 members.

The MPs' argument is about time. Members of the two schemes average 76, and their 30,000 widows 84, the minister told MPs. The NUM warns that "time is not on the side of MPS pensioners".

The government's only stated reason, according to the trustees, is its accounting rules. Neither the Treasury nor the , the official forecaster, has published a costing of an immediate transfer. The OBR said the 2024 MPS transfer raised the government's net financial liabilities by £1.8bn, with only a small effect on borrowing. The 2025 staff-scheme transfer was scored as £1,975m of spending in one year.

The scheme's 2025 accounts value the Guarantor's Fund at £1,071m. At the 2023 valuation £613m was surplus; the rest covered payments already scheduled to the government.

The strongest case on each side

The case for releasing the fund now

The NUM's view is that the fund is the proceeds of an unfair 1994 split that has penalised members for 31 years.
BCSSS members received their full £2.3bn reserve at once last November, with the bonus backdated to November 2024. MPS members have the same guarantor.
Members average 76 and widows 84. With no bonus this year, every delay means more of them die before the money arrives.

The case for the Treasury taking its time

The last comparable transfer, to the staff scheme, was scored as almost £2bn of spending in one year. Paying at once could repeat that hit.
Members lose no guaranteed income by waiting. Future surpluses now go wholly to members, and bonus pensions paid since 2024 are protected.
The taxpayer still guarantees every MPS pension, and the fund's size awaits the valuation as at 30 September 2026, not yet published.

My verdict: mostly right

The MPs have the better argument. The government accepts the money should go to members, and released a larger sum to the smaller staff scheme in one go last November. It has published no costing for an immediate transfer, and that silence is a cost I count against the Chancellor.

The MPs' case has two soft spots. Their letter says they understand the fiscal pressure on the Treasury, yet scored like the staff scheme's reserve, paying now adds about £1bn to borrowing in one year. The NUM line that this is not taxpayers' money ignores a guarantee that is real, still standing and worth something to members.

What I'd do instead

I would set the transfer date, copy the staff scheme's backdating, and publish the costing that is missing.

Set a date for the Guarantor's Fund transfer

Fix the full transfer to a date, so the outcome stops depending on talks.

How it would work: Ministers, as guarantor, agree a rule change with the trustees moving the Guarantor's Fund to members by a fixed date in 2027. They agreed the investment reserve transfer the same way in 2024.
What it costs: No Treasury or OBR costing has been published. The fund was worth £1,071m in the 2025 accounts, and reporting now puts it at £1.2bn. The borrowing effect depends on how the OBR scores it.
Who it affects: Over 100,000 MPS members and families gain. The Treasury gives up money it has counted on since 1994, and borrowing or other spending covers the gap.
Tried before?: For the other scheme, yes. The full £2.3bn BCSSS reserve went to trustees in November 2025. For MPS the Budget commits only to working toward transfer, with no date.
The risk: If the OBR scores it like the staff scheme's reserve, about £1bn lands on borrowing in one year, and other Budget plans have to make room.

Backdate the MPS bonus to the Budget promise

Give MPS members the same backdating that BCSSS members received in November 2025.

Background: The BCSSS deal backdated its new bonus to 1 November 2024. MPS trustees say their members are receiving a second-class deal.
How it would work: When the fund transfers, trustees pay the new bonus backdated to 28 October 2026. That is the day the Chancellor promised the full transfer.
What it costs: Backdating adds the months of delay to the eventual bill. No costing has been published, and the amount depends on the bonus the trustees set.
Who it affects: Members in their seventies and their widows gain most. The Treasury pays more the longer it waits, and borrowing carries that extra cost.
The risk: Backdating removes the Treasury's reason to delay, so officials may dig in harder on the overall size of the fund instead.

Publish the costing and the accounting rule

Require ministers to publish the borrowing effect of an immediate transfer, and the rule that blocks it, before any deal is signed.

The problem: The OBR scored the 2024 MPS transfer mainly as a rise in net financial liabilities, and the 2025 staff-scheme transfer as up-front spending. Nobody has said which treatment the Guarantor's Fund would get.
How it would work: Ministers publish a written statement within a month. It would set out the fund's current value, the accounting rule trustees say drove the decision, and the borrowing effect of paying now.
What it costs: Officials' time. If the numbers undercut the government's case, it loses the argument, which is a political cost rather than a fiscal one.
Who it affects: Trustees and MPs get a number to negotiate against. Ministers lose the option of citing rules nobody outside the Treasury can read.
The risk: If the costing shows a large one-year hit, the MPs' case for paying at once gets harder, and the Treasury's case for waiting gets a number behind it.

The trade-off

Paying now and backdating could put about £1bn through borrowing in one year, if the OBR scores it as it did the staff scheme. I would accept that, because the money already sits in the scheme and its members are in their mid-seventies.

How we'd know it worked

By the end of 2027 the trustees' accounts should show a bonus paid from the Guarantor's Fund and the sub-fund close to zero. If hundreds of millions remain, delay won.

What to watch

The outcome of ministers' talks with coalfield MPs and the MPS trustees.
Whether MPS members receive any bonus pension funded from the Guarantor's Fund in the current scheme year.
Whether the transfer is complete within a year of the Budget.

Each of these is logged as an open call on my track record.