MORE than 100,000 former mineworkers will receive £1.5 billion of money kept from their pensions following the privatisation of British Coal in 1994.

Chancellor Rachel Reeves announced on Wednesday that the government will overturn a “historic injustice” by relinquishing any claim on the Mineworkers Pension Scheme (MPS) Investment Reserve Fund.

This means a 32 per cent increase to the annual pensions of 112,000 former mineworkers, an average increase of £29 per week for each member.

Energy Secretary Ed Miliband said: “For decades, it has been a scandal that the government has taken money that could have been passed to the miners and their families.”

An investment reserve fund was set up using profits from the MPS in 1992.

It was to provide a buffer in case it went into deficit and due to be returned to the government in 2029.

Industry Minister Sarah Jones said the fund, now valued at £1.5bn, will be handed over to the pension scheme instead as the monies had sat for years “unused at times when people needed it most.”

The Trustees of the Mineworkers’ Pension Scheme chairman Gary Saunders said: “As a trustee board we are delighted we will be able to put more money in our members’ pockets.”

Today National Mineworkers Union (NUM) general secretary Chris Kitchen welcomed the announcement.

He added that he was “hopeful” there would be further positive news for ex-miners ahead of a meeting last night with Mr Miliband and Ms Jones to discuss the government’s upcoming review into the “unfair” surplus sharing arrangement.

The arrangement was made between the government and the trustees of the two British Coal pension schemes when it was privatised.

Under the deal, government gets half of any surplus cash from the pension schemes while guaranteeing that no pension falls in cash terms and increases annually in line with the retail prices index.

The NUM has long lobbied for a review of this arrangement, saying the actuarial advice used to justify it had been “too cautious” and that the government’s 50 per cent share is too high.

In April 2021 a cross-party committee of MPs said the government should stop taking money from the scheme and pay back some of what it had already received.