AT the end of this month, steel workers at Port Talbot are to vote on a deal struck between their unions and Tata Steel which was lauded as the saviour of the plant, but which the trade union leaders are unable to recommend, leaving the issue up to the membership.
Tata has committed to keeping the blast furnaces open for just five years, after which they could shut the plant down in its entirety. Details of the deal show that there are no assurances. All that the company says is that it will ‘seek to avoid any compulsory redundancies’ for five years, hardly a guarantee of permanent employment.
Even this precarious situation is conditional upon Tata’s ability to dump its pension scheme, washing its hands of any responsibility for the welfare of the retired workforce and the workforce yet to retire. The deal comes at an even greater cost to the steel workers than it first seemed. The £15bn British Steel Pension Fund has 130,000 members and a black hole of £650m.
Tata wishes to dump what it says has become a ‘significant financial drag’. Doing so would assign the steel workers to a lifetime of retirement poverty. Chairman of the fund’s trustees, Allan Johnston has said that Tata Steel wrote to the Pensions Regulator earlier this month to demonstrate that its UK subsidiary was ‘close to insolvency’.
This is a prerequisite for obtaining a ‘regulated apportionment arrangement,’ a rarely used mechanism aimed at helping ‘financially distressed companies’ by ‘freeing them of retirement obligations’. The Pensions Regulator has yet to decide, but the wheels are definitely in motion! Johnston said: ‘I have correspondence between the company and the regulator, and the regulator is saying, “We haven’t proved yet that insolvency is inevitable, and is inevitable within the next 12 months”.’
The Pensions Regulator states: ‘We continue to have discussions with the employer and the trustees about the future of the British Steel Pension Scheme. There are still significant issues to be resolved and we will consider any proposals carefully in light of their impact upon the 130,000 pension scheme members and PPF levy payers.’
This has to be the understatement of the year. Schemes which fall into the PPF or Pension Protection Fund get severely cut. PPF was set up to pay compensation to workers when the company they work for becomes insolvent and cannot pay their pension. The repayments are capped at 90%. As a result, workers lose at least 10% of their original pension.
Labour MP for Bolsover, Dennis Skinner, told parliament last May: ‘Is the minister aware that the last Tory government to deal with a major occupational pension fund was the Major government way back in 1994 when they privatised all the pits?
‘They then did a deal with the detested UDM in order to get the thing on the pension fund settled. The result was chaos. The net result was even worse after that because it meant that the government was able to get its hands on billions of pounds from the miners’ pension fund. Then at the end when me and my honourable friend were calling for a little bit of state aid to save the last remaining pits, this lousy rotten Tory government wouldn’t find a penny.’
From the outset, Tata has described its liabilities under the existing pension scheme as a ‘millstone around its neck’, preventing it from selling off its steel plants. Now it has got the leaders of the main steel unions, Unite, Community and the GMB, to agree to keep quiet over the deal.
The steel workers at Port Talbot however have voiced their serious concerns about the deal and when it is put to the vote many say it will be rejected with a resounding ‘NO’ vote. Steel worker David Edwards said: ‘People are worried for their future. The pensions have already been attacked, people have been pushed from working from 60 until 65 … now they’re coming for the pension again. It just seems to be one thing after the other.’
Steel workers must reject this treacherous deal when they vote on it in the next few weeks. Workers must vote ‘NO’ and then occupy the plant and demand that the TUC call a general strike to bring down the Tories and to bring in a workers government to secure the renationalisation of the steel industry under workers management.
This is the way forward and we are confident that the Port Talbot workers will take it!
