Fiscal Policy and the NUM Pension Fund


This week on Facebook: Last week’s post was about pensions  and the political fiscal chicanery that successive governments have adopted to steal pension funds and hide their connivance in keeping public sector pensions ‘off the books’. On Sunday I posted a short exert from the television series ‘Yes Minister’, which indicates that the public sector pensions deficit is not a new political issue. What is rarely written about is the financial burden of the funds required to service the pensions of politicians, but perhaps more importantly, how the pensions and contributions of politicians are not subject to the same vagaries as other pensions.

I have mentioned pensions in previous articles:

Millions of pensioners, workers and their employers have no idea that National Insurance Contributions are not being used to pay higher pensions and benefits, instead they are being used to balance the government’s books. The National Insurance Fund now has a surplus, which successive governments have borrowed in order to spend on other items of public expenditure. Employers and employees still largely believe that NICs co-fund a state social services revenue programme designed to serve its contributors. The National Insurance Fund — January 17, 2014

Political leaders able to run legal Ponzi Schemes, such as the Royal Mail privatisation. A privatisation preceded by the government ‘borrowing‘ the pension fund assets and adding the pension liabilities to the Ponzi Scheme called ‘public sector pensions‘. Cassandra’s Curse — October 2, 2013

A phrase that seems to be in vogue at the moment is that of a ‘money tree’, used by left wing politicians as if it existed and which, if properly harvested, could redistribute the nations wealth to the many and not just the few. On the other hand right wing politicians deny its existence, the only solution to the present disparity in wealth distribution being in a programme of austerity for the many while increasing the wealth of the few. It’s little wonder that left wing politics appeals to the indigent while right wing politics appeals to the affluent, or at least to those who categorise themselves as being one or the other (perhaps even both).

The notion of a ‘money tree’ is quite valid, it has always existed in the form of taxes imposed by politicians on those who pay them, but this metaphorical money tree  needs nurturing in the form of economic growth for it to bear fruit. However, any growth in the wealth of the nation has been squandered by both left wing and right wing administrations to fund budget deficits, including the plundered pension funds.

Successive political administrations go to the electorate expecting deus ex machina to be their salvation, and in a sense it always is. There must be some sort of divine providence in the voting electorate’s hopes continuing to triumph over their experiences. The miner’s strike, which began in 1984, and the Miner’s Pension Scheme (MPS) is just one example of how successive government fiscal policies are used by politicians to support their fiscal profligacy in their efforts to remain in power.

We shouldn’t be surprised when the great and powerful do the dirty on the poor and working class, but it still hits hard when you see blatant injustice done. Lord Truscott has been looking at the case presented by the Miners Pension trustees, the Coal Community Campaign, Mick Westwood and the Cannock Chase Miners and many others, for a renegotiation of the return the government take from the miners pensions. The ‘surplus’ share-out ,the profits accrued by the fund now stand at £8billion. It was never envisaged that either the NCB or its subsequent government guarantors would ever be allowed to cream off such profits from the miners pension investments. David Douglass — The Miners’ Pension Theft

 


Monday — £5bn raid on miners’ pensions (2003): In exchange for its share of the surpluses, the Government has guaranteed that miners’ core pension entitlements will always rise with inflation. But there is a danger that it will have to break this promise if the Government continues to take its agreed share.

Tuesday — Retired miners lose out as ministers dig in (2001): Ministers have rebuffed demands that they should relax the rules, which are designed to prevent anyone in a final salary scheme from having a pension of more than two-thirds of their final earnings, adjusted for inflation.

Wednesday — Taxpayers may have to dig deep for miners’ pensions (2008): The surplus that has helped to boost the Government’s coffers is based on calculations by the government actuary (the same actuary that continues to underestimate the real cost of MPs’ generous final salary pension scheme and that was heavily criticised by the Parliamentary Ombudsman in its recent report on Equitable Life).

Thatcher and the miners — click image

Thursday — A freedom of information request has uncovered a major government scandal (2016): In 2003, a miner’s pension was worth around £41.50 a week, though some older men got as little as £10 a week. In contrast, the assets of the two funds at the time were around £20bn. But the real scandal is in the nuts and bolts of the deal.

Friday — Why You Should Care About The Miners’ Pensions Scandal (2017): When we think of people who are disadvantaged, marginalised, discriminated against or persecuted, certain groups spring to mind; women, those from ethnic minority groups, or those with disabilities. We seldom, if ever, consider that such a group could exist based upon an industry. Issues predominantly affecting white, working class men and their families are often overlooked due to an emphasis on other causes, causes which, while worthy, just happen to be more en vogue or high profile than others. Sadly this is the case for our miners.


Mineworkers’ Pension Scheme (2017): A summary that covers the arrangements made for mineworkers’ pensions following privatisation of British Coal in 1994.  Jump to full report (pdf):

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This site was created for members and friends of My Telegraph blog site, but anyone is welcome to comment, and thereafter apply to become an author.

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The Real Economy

Hello, I’m Ed Conway, Economics Editor of Sky News, and this is my website. Blogposts, stuff about my books and a little bit of music

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Professor Mark Elliott

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Am I my Brothers keeper?

An Anthology of Short Stories

Selected by other writers

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