THE announcement that Tata Steel has reached an agreement with the steel trade union leaders that will ‘save’ the industry has been greeted as a huge victory by the Labour Party and the trade union bureaucrats.
Closer examination of the deal reveals that in reality Tata have given virtually nothing in return for the unions agreeing to big cuts in pensions. Since the Indian-owned multinational first announced last March that it was shutting down steel production in the UK, throwing thousands out of work, they have placed much of their ‘losses’ on pension liabilities.
The Tories, fearful of the demands of workers for action to save the industry, tried to defuse this explosive situation by pledging hundreds of millions of pounds of subsidy to Tata. With the guarantee of taxpayers’ money, Tata then embarked on a programme of cuts and closures.
In June, it completed the sale of the Scunthorpe plant and last month it sold its plant in Yorkshire for £100 million. All this time Tata used the threat of the complete closure of its main Welsh steel plant in Port Talbot, which employs more than 11,000 people in South Wales, to get more and more concessions.
The latest talks have been of merging the plant with the German conglomerate Thyssen-Krupp but this, Tata insisted, was contingent on them being able to off-load or reduce their liabilities to the £15 billion British Steel pension scheme. All along Tata has manoeuvred to get rid of the workers’ pension scheme by off-loading it onto the government’s Pension Protection Fund, or sought to reduce its liabilities by drastically cutting the benefits to its workforce by doing away with the ‘defined’ salary pension and replacing it with the inferior ‘defined contribution’ fund.
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 these changes, saying that they, along with other changes to employment terms, are necessary to ‘de-risk the company and help to achieve long-term stability’.
As one pensions expert has pointed out, this change to the pension contributions of current workers in the future, while saving the company a large amount, does not really address the issue of the existing pension liabilities that have built up over the years.
To achieve their goal of ‘long-term sustainability’, Tata is going to have to find a way to get rid of these liabilities that are costing it £136 million a year. The cuts in pensions being proposed are just the beginning. Tata will manoeuvre to off-load the entire pension scheme onto the state, so as to either close down Tata Steel completely or flog it off cheap to an investment consortium.
Having secured the agreement of the union leaders to the principle of making the workforce pay for Tata to stay a bit longer – at first they said three years, now they are saying five years – and promising to avoid compulsory redundancy if possible, the company is expecting the unions to secure a ‘yes’ vote from the workforce to accept the deal.
Tata, as usual, is giving no cast-iron guarantees, just worthless promises that will disappear as soon as its profits stop rolling in. Until then its tactic is to screw as much profit out of the public purse and from smashing the pensions, wages and conditions of its workers.
The union leaders have grasped hold of this deal as the way out of leading any real fight to keep the steel industry and prevent the loss of thousands of jobs. Steel workers must decisively reject this treacherous deal when they vote on it in the New Year.
Workers must demand that their leaders launch a real fight. The unions must demand that the government renationalise the steel industry, and if they refuse, then the steel unions and the TUC must organise a general strike to bring down the Tories and advance to a workers’ government that will renationalise steel and every other major industry under the control of the working class as part of a planned socialist economy. This is the only way pensions, wages and jobs can be secured.