Eggar urged to stop coal pension fund 'raid': 'Maxwell-style' plans attacked by Labour

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The Independent Online
LABOUR has urged the Government to instruct British Coal to abandon plans to use pounds 471m from its staff pension fund to pay for redundancies.

Martin O'Neill, the party's energy spokesman, has accused the Government of attempting a 'Maxwell-style' raid on the fund to finance its promised subsidy to the industry.

British Coal owes the staff superannuation scheme pounds 481m, to pay enhanced pensions for staff who were made redundant or took early retirement. The Government reimburses the corporation for most of the cost.

But last month British Coal informed the trustees it had been asked by the Government to use its pounds 471m share of the estimated pounds 1bn total surplus to pay for the redundancy package. This would save the Treasury much of the pounds 481m outstanding - close to the pounds 500m subsidy recommended by the Commons Trade and Industry Select Committee. The company and trustees are to seek a court ruling on whether the proposal is legal.

In a letter to Tim Eggar, the energy minister, today, Mr O'Neill says the Government is trying to claw back money 'through a Maxwell-style raid on British Coal pensions'.

Mr O'Neill has also written to Neil Clarke, chairman of British Coal, urging him to drop the idea. Mr Eggar and Mr Clarke have denied that the Government offered to indemnify British Coal for any legal costs. But a British Coal spokesman had previously told the Independent the Treasury had agreed to finance any legal costs.