UK - The department of trade and industry has rejected claims it has raided the British Coal Pension Schemes to fund a health compensation plan for employees.
Plaid Cymru MP Adam Price claims the DTI will have stripped almost £3bn to fund the Coal Health Scheme, which compensates workers who contract work-related health problems such as lung diseases and vibration white finger.
Price – in a letter to Griffiths – sent extracts of correspondence between the then energy minister, Helen Liddell, and former Plaid Cymru president Dafydd Wigley from December 1999.
Liddell states that the Treasury agreed to let the DTI settle health claims by British Coal employees from its pension fund surplus.
In his letter to Griffiths, Price said: “This statement would appear to contradict directly your reply.”
But the DTI rejected any contradiction. It said the “accounting agreement” – between the trustees of the Mineworkers’ Pension Scheme and the British Staff Superannuation Scheme – was not solely designed to fund the health scheme.
It says the agreement, struck in 1994, entitles the DTI to 50% of any surpluses.
In return the scheme is underwritten by the government, which ensures any shortfall resulting from its triennial valuations.
This has amounted to £2.2bn being stripped from the two schemes set against, so far, one payout of £350m, which was made in autumn 2003 after the scheme’s last valuation.
British Coal Pension Schemes chief executive David Morgan said the trustees viewed the agreement as an insurance policy which had afforded them security to pursue a more aggressive investment policy than otherwise would have been contemplated after British Coal was privatised.
He said: “Government has done well on the insurance premiums so far, but that is the nature of the business.”
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