THE TORY government is on the brink of a savage attack on Tata Steel workers’ pensions, and after four weeks of consultation will be seeking to bring in legislation that will cut steel workers’ pensions and hand their pension fund over to the government’s Pensions Protection Fund (PPF). The government will be able to take a major part of its surplus out of the fund annually.
The government has already taken over £3 billion out of the Mineworkers Pensions Scheme since it took it over via the PPF in 1994. This proposed smash-and-grab raid is being made on the pretext that Tata Steel is unsaleable because of its £485m pensions deficit.
It has already been proposed that new government legislation would see pensions calculated on the CPR lower inflation rate, making for a massive 10% pensions cut for the steel workers.
However, the issue does not end there, since government ministers have observed that there are many companies with such pension fund deficits, and that legislation to cut their deficits and the pensions that they pay is what is required by the bosses.
So what began as the crisis of Tata Steel has developed into an attack on every company pension scheme in the country and a massive attack on the working class as a whole.
This critical situation has certainly stirred up ex-pensions minister Steve Webb, who was a part of the Tory LibDem coalition, to intervene with a warning. He has urged caution over the ‘rushed changes’, which the one month’s consultation period will usher in, warning that legislation will have consequences.
The consultation on Tata Steel includes a ‘full range of options that consider whether and how the scheme could be separated from the existing sponsoring employer and whether it will be necessary to reduce the benefits within the scheme,’ the Department for Work and Pensions said in a statement.
One option is to base the scheme’s annual increase on the Consumer Prices Index (CPI) inflation measure, which is usually below the Retail Prices Index (RPI) measure currently used.
The whole of the capitalist class will be licking their lips at the expectation of legislation to impose pensions benefit reductions in an ‘emergency’ situation. Webb insists that: ‘The government is going down a very dangerous path’ and that companies would create emergencies in order to close down or cut pensions.
The trustees of the British Steel Pension Scheme welcomed the move, and are now its official sponsors, saying it was better than the scheme falling into the Pension Protection Fund (PPF).
The major unions said yesterday in a joint statement: ‘A number of bidders have made it clear that the British Steel Pension Scheme (BSPS) presents a major challenge to any sale. We also fully understand the great importance of this pension scheme to both current and former steel workers and steel communities across the UK.
‘There has been a lot of speculation that any sale of Tata’s assets would involve the BSPS going into the Pension Protection Fund (PPF). The trade unions believe that such a move would be an unmitigated disaster. The PPF is a financial safety net but it would see every member of the scheme take an unnecessary cut in pension benefits. The financial health of the BSPS is such that going into the PPF can certainly be avoided.’
‘We welcome the announcement of a government consultation on the future of the BSPS and the trade unions will of course make a full submission in due course. It is important that all stakeholders continue to explore all available options that avoid the need for the scheme to go into the PPF, which would be the worst deal for scheme members.’
The union leaders are willing to accept big pension cuts to avoid the fund falling into the hands of the PPF. They have not got the slightest intention of defending the Tata Steel pensions or the Tata Steel jobs.
The steel union leaders and the TUC must be made to fight this massive attack on Tata Steel pensions and on all private sector pensions. Millions of workers whose pensions are under threat are now involved in this struggle and must be mobilised.
The only solution to this crisis is that the trade unions must occupy all Tata Steel plants and the TUC must call a general strike to bring down the Tories and bring in a workers government and socialism!