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PPF slammed for UK Coal deal

PPF slammed for UK Coal deal
Published:  15 Jul at 9 AM
The Pension Protection Fund has come in for criticism for effectively renationalizing the coal industry in Britain. Pension issues critic, John Ralfe, has accused the government of exposing itself to significant financial risk by rescuing UK Coal, which has a deficit of around £540 million. Last week a deal was struck that will see 2,000 staff retain their jobs.

Ralfe believes that the loss-making mines could leave the PPF even further in the red and that the Coalition should have waited for bankruptcy in order to raise cash by selling off assets. The insolvency claim was abandoned by the PPF in return for economic interests in UK Coal Production, as the group is now known.

Any profits created by the firm’s equity will be pumped into the PPF as a way of reducing the pensions bill. Ralfe wants the government to explain why it appears unprepared to see an end of the beleaguered coal industry in the UK.

He has written to Alan Rubenstein, chief executive of the PPF, asking him to explain in detail how the deal is going to work and whether any political pressure was involved.

Ralfe added that an explanation was owed to UK businesses as it is they that pay for the PPF through the pension-scheme levy.