Following the announcement in the budget, Energy Secretary Ed Miliband confirmed that the move will mean a 32% boost to the annual pensions of 112,000 former mineworkers – an average increase of £29 per week for each member.

The investment reserve fund was set up using profits from the scheme in 1992, to provide a buffer in case the Mineworkers’ Pension Scheme went into deficit. This money was due to be returned to government in 2029.

Former mineworkers and their families have fought for justice for many years. In a landmark decision, the fund - now worth £1.5 billion – will be handed over to the pension scheme, ensuring former pit workers who powered the country for decades finally get the just rewards from their labour.

When British Coal was privatised in 1994, the government also agreed to take half of any profits generated by the pension scheme, in return for a guarantee that pensions would increase in line with inflation.

The scheme has continued to produce strong returns and the government has never paid any funds into it.

Therefore, the government is also delivering on its commitment to review this agreement to ensure former miners and their families get a fairer deal in the years ahead, with next steps set out in the coming months.

Energy Secretary Ed Miliband said: We owe the mining communities who powered this country a debt of gratitude.

"For decades, it has been a scandal that the government has taken money that could have been passed to the miners and their families.

"Today, that scandal ends, and the money is rightfully transferred to the miners. I pay tribute to the campaigners who have fought for justice- today is their victory."

The trustees are responsible for deciding how the £1.5 billion fund is distributed amongst their 112,000 members and are now working at speed to deliver the bonus into pension pay packets from November this year. ■