During the statement by the Business Secretary on the UK Steel industry, I asked him about the future of pensions for those who work and have worked for Tata Steel UK.
Tata Steel UK is responsible for £15 billion British Steel Pension Scheme, which is one of the top 20 liabilities in the United Kingdom. This has 130,000 current and former steelworkers within it. Many of whom live in north east Wales due to their years of work at the Shotton Steel plant.
Tata Steel had agreed in 2014 to fund the deficit in the pension scheme. But now questions have arisen over the ability of the British Steel Pension Scheme to continue to be supported. The deficit currently runs at £485 million (as of March 2016).
However, it would appear that the British Steel Pension Scheme will be transferred to the Pension Protection Fund (PPF), the UK lifeboat for capsized corporate pension funds. Under the PPF compensation scheme, the 130,000 British Steel Pension Scheme members will lose out. End to end, they will receive on average 20% less than their pension promised.
For the 45,000 members who have not yet retired, this means a 10% reduction in their promised pension, but no general reduction for the 85,000 pensioners. Some of those who took early retirement, however, will also see their pensions reduced by 10%.
The Pension Regulator has legal powers to make claims against companies in the Tata Steel Group that are considered to be “connected parties”, which could include Tata Steel Europe, all the way up to Tata Steel Limited in India.
The Shotton steel plant has provided stable, decent employment for hundreds of people. They not only deserve a decent job, but a decent retirement as well. I am deeply concerned that the UK Government have not paid enough attention towards the huge British Steel Pension Scheme.
I asked the Business Secretary what guarantees the Government will be providing to those with a pension in the British Steel Pension Scheme. If the Government fails to provide guarantees to those who have worked hard and done the right thing by signing up to a pension we will see large numbers of people in Flintshire being left out of pocket.
Times are tough for steelworkers in Flintshire and I will continue to work with my colleague, Mark Tami MP for Alyn and Deeside, to ensure that not only is our steel industry saved, but the pensions of those steelworkers is secure.