Saturday, 24 June, 2017

Steelworkers accept Tata Steel's pensions overhaul to save jobs

Workers at the Port Talbot plant waiting to speak to Sajid Javid in April Video Tata to invest in British steel industry
Sammy Stanley | 16 February, 2017, 00:41

Tata Steel's (TISC.NS) British workers voted on Wednesday to accept pension benefit cuts in return for safeguards on jobs and investment, although the Indian company's plan to spin off its entire United Kingdom pension scheme still faces regulatory hurdles.

Tata's offer includes a £1bn investment commitment at Port Talbot and no compulsory job losses.

With 130,000 members Tata Steel UK's pension scheme is one of the largest in Britain, although figures show only one in 13 members contributes to the scheme, which the company inherited a decade ago upon purchasing Corus.

As much as 72.1% of the members of Community and 75.6% of members of Unite - the two biggest unions - as well as 74% of the third union GMB, voted in favour of accepting the proposals.

"Steelworkers have taken a tough decision and have shown they are determined to safeguard jobs and secure the long-term future of steelmaking".

However, this investment depends on spinning off the pension fund behind Tata Steel UK into a separate entity and replacing the final salary pension scheme with a less generous contribution scheme. "Nobody wanted to be in this situation, but as we have always said, it is vital that we now work together to protect the benefits already accrued and prevent the BSPS from free-falling into the Pension Protection Fund (PPF)". Thousands of skilled jobs rely on steelmaking and the industry supports the whole United Kingdom manufacturing sector.

However, unions also pointed out the government and company should honour the vote from steelworkers by supporting the industry going forward. Approximately three quarters of votes supported the proposals, which involve saving the Port Talbot steelworks in south Wales. The union's national officer, Tony Brady, said that the past year for members had been "a hellish time ... as uncertainty has swirled around the steel industry", adding that "this is not a decision our members have taken lightly".

Tata would have to pay as much as £200m a year for 15 years to plug this funding gap, and trustees said they had been told by the business it could not afford these contributions and would likely collapse as a result.

"Instead of insulting steelworkers by classing their industry as a "low priority", the government set out as strategy for steel that recognises it as a high priority for investment and innovation". "We will continue to work with the trade unions and other stakeholders to deliver Tata Steel UK's transformation plan and develop a sustainable future for the business".

Tata Steel has unveiled its latest line for tailor welded blanks at the company's Automotive Service Centre in Wednesfield, West Midlands, marking 21 years of the site processing and distributing steel products.

700 people are employed at tata Shotton.

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