Union swings behind campaign for pension justice

Martin Shipton

The trade union Unite has thrown its weight behind a campaign to get justice for retired workers whose pensions were cut when the companies that employed them went bust.

Some of the most prominent campaigners are ex-steelworkers from Wales, who lost out when their employer Allied Steel and Wire crashed in 2002.

Plaid Cymru MP Ann Davies tabled amendments to the Pension Schemes Bill, which is currently going through the House of Commons, that would have provided full compensation to the retired workers.

But Pensions Minister Torsten Bell, the MP for Swansea West refused to accept the amendments, which were intended to make all the pensions inflation-proof .

Plaid intends to retable the amendments when the Bill is considered at its next Commons stage.

Fresh hope

Unite’s support for the has given campaigners fresh hope that the UK Government will back the amendments that will deliver what they have been seeking for more than 20 years.

Specifically, they want the law changed so that defined benefit pensioners will get inflation-linked rises from the Pension Protect Fund (PPF) to reflect pension contributions made before 1997, which up until now have been excluded.

The PPF was set up with contributions from employers, and new modelling by the body itself suggests the cost of inflation-linking has reduced.

In its submission to the Public Bills Committee, Unite highlights the £14.1bn reserve in the £32.2bn PPF, writing that “a small portion of this, £3.2bn to £3.9bn, could fix a gross unfairness in the compensation rules that penalises people who saved into their pensions before 1997, by making retrospective indexation plus arrears.”

The union, which is Labour’s biggest donor, says such a change would benefit up to 400,000 pensioners at no cost to the UK Government, arguing that “there would still be enough assets to ensure compensation levels were safe, and employers benefitted from elimination of the levy”.

Amended

Unite wants to see the Pension Schemes Bill amended so it provides for: retrospective indexation plus arrears for pre-1997 accrual, as well as increasing the indexation cap on post-1997 indexation, currently at 2.5%, to 5%.

In addition, the union will advocate for higher pensions for dependents than the current 50%, “towards a level more closely aligned with established occupational schemes such as the Local Government Pension Scheme”.

Unite added that members of the Financial Assistance Scheme (FAS) “deserve fair, inflation-protected pension compensation”.

FAS compensates members of underfunded schemes whose employers became insolvent before the PPF started operating in April 2005. Pensions paid to the 130,000 members of the FAS are funded through the Department for Work and Pensions, rather than an industry levy like the PPF.

‘Scandalous’

Unite general secretary Sharon Graham said: “It is scandalous that the total PPF surplus reserve has ballooned while pensioners continue to suffer.

“Inflation-proofing pensions would benefit hundreds of thousands of pensioners at no extra cost to the taxpayer. Pensioners who through no fault of their own have been left reliant on PPF or FAS pension funds in their retirement, deserve a fair pension.”

Meanwhile Plaid Cymru’s South Wales East MS Delyth Jewell highlighted the pension injustice faced by former mineworkers in the Senedd.

Her call followed a meeting last week with her constituents and those from further afield in Cascade Community Centre, in Penpedairheol, Hengoed, in Caerphilly county borough.

The campaigners are trying to get pension surplus funds released the same as the Mineworkers’ Pension Scheme members whose funds were released in the autumn of 2024.

‘Lost out’

Ms Jewell said: “Former mineworkers have lost out on billions of pounds in pension payments, and government after government in Westminster has refused to right this wrong. The last budget announced, finally, that members of the Mineworkers’ Pension Scheme would receive the extra cash they’re owed, but there was no mention of the British Coal Staff Superannuation Scheme, which also includes ex-miners.

“These workers earned this money. Many have lived with poisoned lungs and critical conditions as a result of their work. We cannot afford for more miners to die before this happens.

“In a public meeting last week where one former miner who was 90 years old, and who’d suffered a stroke, asked in tears what the best possible outcome could be. He needs this money. He deserves this money.

“The Welsh Government must put pressure on the UK Government to give all those workers enrolled in the scheme the money they’re owed.”