Workers could see £6,000 boost to pension pots under Government plans
This could result in an investment of £50 billion in infrastructure projects, which the Treasury hopes will boost the economy and drive up higher returns for savers.
Chancellor Rachel Reeves said: 'We're making pensions work for Britain. These reforms mean better returns for workers and billions more invested in clean energy and high-growth businesses – the plan for change in action.'
The schemes are expected to save £1 billion a year through economies of scale and improved investment strategies, the Treasury said.
Under the reforms, the local government pension scheme will be consolidated, reducing the current 86 administering authorities into six pools.
Deputy Prime Minister Angela Rayner said: 'The untapped potential of the £392 billion local government pension scheme is enormous.
'Through these reforms we will make sure it drives growth and opportunities in communities across the country for years to come – delivering on our plan for change.'
Sir Steve Webb, a former Liberal Democrat pensions minister who is now a partner at consultants LCP (Lane Clark & Peacock), described it as a 'truly a red letter day for pension schemes, their members and the companies who stand behind them'.
He said: 'The Government has clearly been bold in this area and this opens up the potential for this surplus money to be used more productively to benefit scheme members, firms and the wider economy.'
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Telegraph
9 minutes ago
- Telegraph
If Labour gives £2.3bn of our cash to retired British Coal staff, it has truly lost the plot
How big is the black hole in Britain's public finances? The respected think tank National Institute of Economic and Social Research (Niesr) has just forecast a £50bn gap, which the Chancellor will be forced to plug by lower spending or higher taxes. Meanwhile, as Rachel Reeves tries to balance the books by saving every penny, her deputy, Darren Jones, Chief Secretary to the Treasury, casually told Parliament in July that he is 'considering proposals' to hand out £2.3bn of taxpayers' money to the 40,000 members of the British Coal Staff Superannuation Scheme (BCSSS). He added: 'I will be looking at those issues in more detail over the summer, and I hope to say more in the autumn.' What is this possible £2.3bn giveaway? The BCSSS, for above-ground managers, and its sister scheme, the Mineworkers' Pension Scheme (MPS), for those below ground digging out coal, were set up after the coal industry was nationalised in 1947, at a time when it employed 700,000 people. By privatisation in 1994, British Coal had shrunk drastically to just 13,000 staff. The BCSSS and MPS became stand-alone trusts, with the Government guaranteeing all pension entitlements, including annual inflation increases. In return, the Government receives half of any 'surplus' calculated at the three-yearly actuarial valuations, with the other half used to increase pensions. The average BCSSS pension of £15,000 a year is over twice the average MPS pension of £7,000, reflecting much higher pay for British Coal managers compared to the miners. The taxpayers' share of surpluses was also calculated at privatisation, which remained in both schemes as a reserve against poor investment performance. The £2.3bn the Government is now 'considering' giving to BCSSS members is the taxpayers' share of surpluses at privatisation, which under the BCSSS rules will be paid back to the Government in 2033 – in only eight years' time. The BCSSS trustees' argument for a £2.3bn giveaway is that last October, as revealed by Telegraph Money, the Government gave £1.5bn of taxpayers' money to the 112,000 MPS members, boosting their annual pensions by 32pc. This was all part of the rhetoric to end what Labour called an 'historic injustice' and fulfilled Labour's election manifesto pledge, repeated by Ed Miliband at the 2024 Labour Party conference. The BCSSS Trustees' argument simply rests on ' the similarities between MPS and BCSSS'. But the £1.5bn given away to MPS members didn't 'belong' to them in the first place. Just like the BCSSS' £2.3bn, it was the Government's share of surpluses at privatisation. Under the MPS rules it would have been paid back to the Government in 2029. Since privatisation in 1994, all BCSSS and MPS members have received every last penny of the pensions promised to them, including inflation increases. More than that, under the rules set up at privatisation, half of valuation surpluses have been given to members as 'bonus' pensions. To add insult to injury, after receiving the £1.5bn, the MPS trustees are now lobbying for all of any future surpluses to go to members, rather than half going to the Government. And handing over the £2.3bn of taxpayer money to the BCSSS members would not be in exchange for giving up the Government guarantee. If that money is to be handed over, it should at least be on the understanding that BCSSS pensions become a defined contribution plan, entirely dependent on the performance of scheme assets like other private sector schemes. But the trustees say they would 'not consider giving up the guarantee in exchange for the investment reserve… The guarantee does not form part of our discussions with the Government. It will remain in place, whatever decision the Government makes'. This would be an extraordinary case of: 'heads BCSSS members win, tails taxpayers lose'. As guarantor, the Government must step in to make payments if there is a future deficit. Once money is used to increase pensions the only way any future deficit to be plugged is for taxpayers to write a cheque. And because 85pc of BCSSS and MPS assets are in 'risky', that is, not index-linked bonds to match liabilities, any current surplus could easily become a deficit. The Government, and specifically Mr Miliband, still have some serious explaining to do about the £1.5bn already handed over to MPS. If Labour hands over another £2.3bn of taxpayers' money – £3.8bn in all – then surely this government will lose any shred of fiscal credibility left. Rachel Reeves should tell Darren Jones, in plain language, to stop 'considering' this proposal and say a polite 'no' to the BCSSS trustees, and the Labour MPs pushing it.
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Glasgow Times
12 hours ago
- Glasgow Times
Locks need urgent repair amid threat to future of Cambridge punting
The flat-bottomed boats, propelled along the river by someone pushing a long pole against the river bed, have been enjoyed by visitors to the prestigious university city for more than a century. But the possible collapse of a lock island could take out a sluice, lowering the river water level to a 'muddy trickle' and putting an end to punting, it is feared. David Goode, chair of the Conservators of the River Cam – which manages a stretch of the river, said a structural engineer surveyed two locks as 'in imminent danger of collapse' in May last year. Liberal Democrat leader Sir Ed Davey punts along the river Cam during his visit to Cambridge. (Chris Radburn/ PA) Both Jesus Green Lock near central Cambridge and Bait's Bite Lock, further north on the river, remain closed to navigation as they are 'unsafe'. He said work to replace the two locks could cost around £25 million, and the conservators do not have the money to do it. Sir Ed, speaking after he tried his hand at punting on Friday, said: 'I think these locks urgently need to be repaired and potentially rebuilt. 'It's essential for people using the river but the river itself. 'Without that water control, the river would go to a trickle. 'Punting might just go away. Jesus Lock on the River Cam in Cambridge. (Chris Radburn/ PA) 'All the jobs, all the revenue, all the tourism that brings to this great city. 'So this is actually quite an urgent investment and I hope Cambridge City Council can work with the Government or with other agencies to get that investment.' Rod Ingersent, managing director of Scudamores – a Cambridge punting company, said: 'It's almost certainly been a problem building over many decades and it's to do with very old structures which are expensive to maintain.' He said that 'something of this scale gets beyond' what the conservators 'can be reasonably expected to do as it requires so much investment and so much expertise in the maintenance of old structures'. 'But the effect would be catastrophic for punting, certainly for the colleges above the lock, the old buildings would be in trouble, and there's some amazing listed buildings along the college backs, they'd be under risk from the foundations being affected,' he said. 'Then below the lock the rowing with the city and the college clubs, that would be disrupted.' Liberal Democrat leader Sir Ed Davey punts along the river Cam during his visit to Cambridge. (Chris Radburn/ PA) He said the problem was of 'such a scale, the level of funding, it needs to go up some stages'. 'It might… need to go up to Defra, up to central government possibly,' Mr Ingersent said. 'I think it's not reasonable to expect the Cam conservancy to do it from their own resources, they're quite a small body and their main task is looking after navigation rather than I suppose being maintainers of old structures which they've inherited.' He said water has been 'scouring away at the foundations' of the lock island, and if there were another high water event it 'could be very challenging and something could start to give way with maybe quite catastrophic results'. Mr Goode said the river level is 'artificially held high' to allow navigation, and if the lock island collapsed it could take out a sluice causing the water level to drop. 'The lock irons are directly connected to the sluices so if the lock island collapses it's going to take out the Environment Agency sluice with it, I imagine, and that would be the issue with water level,' said Mr Goode. Jesus Lock on the River Cam in Cambridge. (Chris Radburn/ PA) 'Because then the water level would not be maintained at its current depth which it is on the Backs, which is the section of the river where the punting takes place.' He said that 'every 20 years or so' the conservators ask the Environment Agency to drop the river level so 'we can clear the crap out of the river'. 'Bikes, shopping trolleys, all the things students and townspeople throw in on a drunken night out,' said Mr Goode. 'When we do that we let the water out so we simulate what would happen if the sluice or the weir failed. 'All that's left is a muddy trickle. 'You would not be able to support punting at all. 'You could walk across it (the river) from one side to the other. 'So that would be the end of punting if that were to happen.' He said that £1.6 million 'stabilisation work', described as a 'temporary fix that will enable us to re-open the lock safely', would start at Bait's Bite lock from August 25. Mr Goode said that fix could last five to 10 years. He said they have 'sold the family silver', including some cottages and the former conservator's house which they owned, to afford the work to Bait's Bite Lock – but do not have funds for more work.
