Tata’s UK steelworkers face a “make or break” vote on pensions as union leaders back reforms
UK steelworkers are set for a "make or break" vote on reforms that could determine the fate of Port Talbot.
Today unions united behind proposals that will see Tata Steel pump £1bn into the sprawling Port Talbot steelworks in exchange for workers accepting changes to their pension schemes.
The ballot on the changes will run from Monday to mid-February.
Members of GMB, Community and Unite unions will decide whether to accept a "mirror" pension scheme that would result in reduced retirement benefits, with future payments linked to the consumer price index of inflation.
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In a joint statement, the leaders of all three unions today said that "with heavy hearts" they recommended workers back the proposals. They said:
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.
Sources close to the sector further warn that if union members reject the offer, Tata is expected to return to the drawing board altogether, and revisit the fundamental question of whether to continue in the UK's steel industry.
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The Indian conglomerate spent much of last year trying to find a buyer for its UK steel operations, entering into joint-venture talks with ThyssenKrupp over the summer.
"This is real 'make or break' stuff," one Westminster source told City PM "If this vote doesn't go through, then that could be it."
There could be very little British steel industry left if this doesn't happen.
Another said the result is currently "on a knife edge".
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Tata has already made clear that future investment plans for sites like Port Talbot are contingent on finding a way to plug the yawning British Steel pension scheme deficit.
Asked if the ballot represented a "make or break" moment for Tata UK's steel operations, a spokesman for the firm said: "We don't recognise that".
It comes as the trustee for the Tata Steel UK pension fund is expected to report a deficit of up to £2bn at the next actuarial valuation at the end of March.
The trustee is expected to blame the rising deficit on the fact that Tata Steel UK might no longer be able to access extra capital from the wider Tata Steel group.