Tata steelworkers vote to accept lesser pensions to safeguard jobs

  • Video report by ITV News West of England Correspondent Rupert Evelyn

Tata steelworkers have voted overwhelmingly to accept reforms towards a less generous pension to safeguard thousands of jobs and pave the way for a £1bn rescue deal.

Officials said members of three unions backed changes by around 3-1, giving a mandate to "move forward" following months of uncertainty in the company that owns the Port Talbot steel plant.

Workers had been urged by the unions to move from a final salary pension to a less generous scheme defined by contributions from the company and individual employees.

Leaders of the unions, Community, Unite and GMB, said the new terms were the best that could be achieved through negotiation.

Moving to the defined contribution (DC) pension scheme will see maximum employer contributions of 10%, based on employee contributions of 6%.

The company had originally proposed contributions of 3% from the employer and 3% from the employee.

Unions warned the British Steel Pension Scheme (BSPS) has to close to future accrual at the end of March because it is heading for the Pension Protection Fund - a lifeboat for failing schemes - and the company into insolvency.

Tata inherited the scheme when it bought Corus, formerly state-owned British Steel, in 2007.

The Indian conglomerate announced last year it would sell its UK business but has since decided to seek a partner.

The company has been in lengthy talks with German firm ThyssenKrupp.

What is the reaction to the steelworker vote?

Steelworkers have been widely praised for endorsing the reformed pension plan. Credit: PA

The leader of the Community union said steelworkers had taken a "tough decision" but given the unions a "mandate ... to move forward in our discussions with Tata".

Tata Steel said it recognised the ballot had been a "difficult decision for employees" and praised their commitment to protecting the firm and jobs.

The Government hailed the vote as an "important step forward for the future of Port Talbot and Tata Steel in the UK".

First Minister of Wales, Carwyn Jones, also hailed a "significant step forward in securing a sustainable future for Tata's UK business" and urged the government to tackle high energy costs in the industry.