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Issue #1733      June 1, 2016

Stealing workers’ pensions

Britain’s 130,000 steelworkers could face poverty in retirement after Tory ministers unveiled plans to illegally downgrade their pensions. The government announced that it could abolish some Pensions Act statutes that ensure pension increases match RPI inflation.

Tory Business Secretary Sajid Javid said that linking British Steel Pension Fund (BSPS) to lower CPI rates instead would help entice a buyer for Tata Steel UK by shaving £2.5 billion off pension liabilities.

But shadow business secretary Angela Eagle warned the plan was “illegal” and could set “a potentially dangerous precedent” for millions of retirees.

And Community, GMB and Unite unions said that it would be “an unmitigated disaster” to reduce rates – adding a warning against dropping BSPS into Pension Protection Fund (PPF) measures.

In a joint statement they said: “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.

“We will seek to work constructively with the government and the scheme trustees to deliver the best possible deal for our members.

“We need to ensure that there are cast-iron safeguards in place so this unique situation does not result in employers dodging their pensions responsibilities.”

In parliamentary remarks Mr Javid claimed the BSPS trustees themselves had asked him to consider removing the protective legislation.

Among several former and current Tata bigwigs who populate the trustee board are chairman Allan Johnston, who chairs Tata subsidiary UK Steel Enterprise and Martin Driscoll who sits on the board of Excalibur – a steel firm hoping to buy Tata assets.

Ex-Liberal Democrat pensions minister Steve Webb hit out at Mr Javid’s suggestions, saying a BSPS pensions cut could create a “loophole which could be exploited by firms keen to walk away from their pension liabilities.”

Mr Javid also announced that ministers have launched a four week consultation over the future of steelworkers’ pensions.

The debate came after hundreds of steelworkers marched to Parliament – alongside Labour MPs and party leader Jeremy Corbyn – yesterday to remind the government that 11,000 jobs would be lost if a suitable buyer for Tata Steel UK is not found.

Ms Eagle said: “No one who saw the steelworkers march through London yesterday can fail to be moved by a dedicated and skilled workforce.”

“Any resolution must protect the pensions of the scheme’s 130,000 beneficiaries.”

Mr Javid told the Commons said that the board of India-based Tata Steel is considering seven offers but that he could not reveal any more.

He said that it is “not the government’s job to pick a winner or to back a specific bid” but it is the Tories’ job to “remove potential barriers to sale.”

Morning Star

Next article – France: Strikes against labour laws

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