Labour MP Ian Lavery denies wrongdoing over NUM mortgage

Labour's trade union spokesman Ian Lavery has denied any wrongdoing after BBC Newsnight learned he received a heavily subsidised mortgage.

The mortgage was from the benevolent fund of the National Union of Mineworkers in Northumberland.

Mr Lavery was the general secretary of that union from 1992 to 2010, and also faces questions about redundancy money he received when he left.

He says the mortgage was a "private" matter and denies any impropriety.

In total Ian Lavery faces questions about £250,000 of payments the union's books suggest he received from the NUM, Northumberland Area during his period there.

Newsnight has established that Mr Lavery received a £72,500 mortgage in 1994 from the union's benevolent fund repayable at less than half the market interest rate.

On Tuesday, he refused to comment on whether the outstanding mortgage had subsequently been written off by the union. "The union and myself came to a financial agreement in 2007 with regards to the mortgage which will remain private between myself and the union."

Mr Lavery stepped down as general secretary of the Northumberland Area in 2010, taking over from Denis Murphy as MP for Wansbeck. Mr Murphy took over the running of the union which now has just six members.

During Mr Lavery's tenure as general secretary, more than half of the union's £2.5m income came from sick former miners who the Union helped with compensation claims and who donated a portion of their payments to the union.

Mr Lavery has already faced questions from the Sunday Times about what appear to be more than £140,000 of redundancy payments to him, as well as about why he received a mortgage from union funds.

He has been referred to the Parliamentary Standards Commissioner by a Tory MP for alleged impropriety over his redundancy.

Newsnight has established that the "sweetheart" interest rate on the mortgage provided by the union's Provident and Benevolent fund - just 3% compared to market rates of around 8% - would have saved Mr Lavery thousands of pounds in interest payments over the life of the mortgage.

However, Newsnight has also identified a sum of £109,911 written off in the union's books in 2007. This is almost exactly the figure Mr Lavery would have owed on the £72,500 mortgage if he had made no, or very low, payments over the 13-year period.

Ellington Colliery in Northumberland just before it closed in 2005

On Tuesday he refused to say whether any of the mortgage had been written off insisting he had absented himself from any discussions regarding the mortgage and behaved in a proper manner throughout.

He said: "The NUMNA accounts were professionally audited and accepted by the Certification Officer on an annual basis," adding, "I refute any allegations of financial irregularities."

A second puzzle relates to Mr Lavery's redundancy. He acknowledges he received £62,000 in redundancy payments but insists he doesn't recognise a second payment of £85,426, logged on the union's books in 2013.

He said: "The £85,000 which you keep referring to as a mystery payment, that is something that the accountants will have come up with. I'll tell you three times, four times, five times, I don't recognise that payment."

But the payment is recorded in 2013 as "past general secretary redundancy costs". Mr Lavery started at NUMNA in 1992. His successor, Denis Murphy, took over in 2010 so the phrase "past general secretary redundancy costs" appears, on the face of it, to apply to Mr Lavery.

Britain's wealth was, once, powered by coal - but miners paid a heavy price in ill-health. The government set up a compensation fund for miners suffering lung disease and other illnesses which has paid out more than £4 billion.

Mr Lavery, a former miner himself, is proud of his union's success at winning compensation for its members. On their compensation forms, miners could tick a box to gift a fraction of their money to the union.

The last pit in Northumberland closed in 2005 and it now boasts just six members but gifts to the compensation fund kept the union afloat. Donations from former miners amounted to more than £1.6m over the period of Mr Lavery's tenure.

In response to Newsnight's story, Mr Lavery issued the following written statement: "For the record, I am immensely proud of the fact that the National Union of Mineworkers (Northumberland Area) were able to gain rightful compensation for tens of thousands of miners, former miners and their families.

"The government and the industry were vehemently opposed to paying compensation for industrial diseases but the National Union of Mineworkers were ultimately successful. Thousands of miners received the compensation they deserved because of the time, effort and commitment of the NUM and its officials, who brought test cases that were opposed at every turn.

"It is estimated that more than £4 billion nationally - and tens of millions of pounds in Northumberland alone - was paid out in the form damages for those who had worked in the coal industry.

"I am incredibly proud of the role I played in achieving this on behalf of former miners who would have been left high and dry without the work the NUM carried out on their behalf. I simply refute out of hand any suggestion of financial impropriety."

More on this story on BBC Newsnight on Wednesday 14 April at 22:30 BST on BBC Two - or catch up afterwards on iPlayer