A GOVERNMENT rip-off which has siphoned £4.4 billion from the pensions of retired mineworkers receiving as little as £10 must end, a cross-party Commons committee urged today.

The House of Commons business, energy and industrial strategy (BEIS) select committee is calling for the “immediate transfer” of £1.2 billion to the mineworkers’ pension fund, and for the cancellation of a 26-year deal allowing the government to grab 50 per cent of surpluses earned by mineworkers’ pension fund investments.

In the run-up to privatisation of the coalmining industry in 1994, the government said that it would guarantee mineworkers’ future pensions payments if the mineworkers’ pension scheme (MPS) suffered losses on its investments. In return it would take 50 per cent of any surpluses.

Since then, successive governments have not paid out a penny to offset losses but have claimed £4.4 billion from investment surpluses, with £1.2bn more to come.

Meanwhile 150,000 retired mineworkers receive an average pension of £84 a week while some — the oldest pensioners — are paid less than £10 a week.

The select committee launched an inquiry into the rip-off in March.

In its report, published today, it says that the government “failed to conduct due diligence” when it negotiated the 50-50 split in pension fund surpluses in 1994, and that the split was “arbitrary.”

The government should continue to underwrite the scheme and should be reimbursed only for any money it pays out in the unlikely event of future losses, the report adds.

National Union of Mineworkers (NUM) national secretary Chris Kitchen told the Morning Star that the 50-50 share-out of pension fund surpluses in 1994 was “imposed” by the Tory government after the miners’ strike against pit closures in 1984-85.

“There were no negotiations,” he said.

“If the government fails to act on the select committee’s recommendations there can be no other rationale behind the decision other than that the original agreement was an act of vindictiveness against the mineworkers which the government is going to continue.

“If the government ignores the recommendations — which they can do — then they are just seeking vengeance for the strikes of 1974 and 1984-5.”

In 1995, there were 250,000 retired mineworkers. Since then, 100,000 have died, many from industry-related diseases such as pneumoconiosis.