UK Steel workers’ unions have given their backing to Indian conglomerate Tata Steel UK’s pension plan in a bid to rescue thousands of jobs and allow a merger with German major ThyssenKrupp to go ahead.
Union representatives held a meeting on Thursday (27) to discuss the changes announced, which would see the British Steel Pension Scheme (BSPS) close to future accrual and replaced with a defined contribution scheme.
“We do not make this recommendation lightly. Nobody is saying that the proposal on the table is without issues. We fully understand the concerns of members, particularly around the British Steel Pension Scheme (BSPS),” said a joint- statement from the three workers’ unions – Unite, GMB and
Community – which have come together as the National Trade
Union Steel Coordinating Committee (NTUSCC).
“But as we have said before what you are voting on is the best outcome that could be achieved through negotiation. It is our collective view, supported by our independent experts, that this is the only credible and viable way to secure the future,” the statement added.
An agreement on Tata Steel’s proposed changes to pensions are essential to future investment, including £1 billion at the Port Talbot plant in Wales over 10 years.
A ballot on the offer was expected to go ahead on Monday (30).
The move came as ThyssenKrupp CEO Heinrich Hiesinger warned on Friday (27) that a deal with the Indian giant was possible only if the pensions liability is separated from its UK units.
“Tata needs to separate its pension liabilities from the plants in Ijmuiden and Port Talbot, then we can talk,” Hiesinger told German newspaper ‘Handelsbatt’ in an interview.
“We too would like a speedy solution, but it has to be a good solution. A solution that secures the future of steel production in Germany and Europe – and that takes time,” he added.
His comments came as trustees of the £15 billion BSPS warned its 130,000 members that the funding gap can rise from £300 million to as much as £2 billion unless more funds are injected.
In a letter to BSPS members, Allan Johnston, chair of the scheme’s trustees, said that closing the scheme was a “necessary step” for it to be separated from the company.
The letter reads: “Tata Steel has told the trustee that despite recent improvements in the performance of the Tata Steel UK business, [it] remains dependent on financial support form the wider Tata Steel group and that continuing support will be conditional on a separation of the BSPS from Tata Steel.”