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4-Traders Homepage  >  Equities  >  NATIONAL STOCK EXCHANGE OF INDIA  >  Tata Steel Limited    TATASTEEL   INE081A01012


End-of-day quote. End-of-day quote  - 05/26
327 INR   +0.82%
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Javid: Pensions Changes Will Only Apply To Tata

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05/26/2016 | 05:31pm CEST

Any changes to Tata Steel's pension scheme will only apply to the company and will not pave the way for others to follow, the Government has said.

The Business Secretary Sajid Javid said he was "wary of setting a precedent" as efforts continue to find a buyer for the firm's UK operations.

He added that no decision has been made, but he hopes the pensions issue can be resolved "as quickly as possible" because that would help the sale of Tata's assets.

Neil Gray, the SNP's employment spokesman, said the "incredibly sensitive pensions issue must be handled with extreme care".

He added: "It would be highly inappropriate for the UK Government to push this through without further careful consideration."

Mr Javid agreed that ministers "need to tread carefully" and said: "I think it is also right that we listen to the trustees and indeed the unions and Tata itself about this proposal and we consider it very carefully indeed."

In total the British Steel pension scheme has 130,000 members. The scheme has a deficit of £485m.

The Government has launched a consultation on changes to pensions law, including cutting the British Steel Pensions Fund long-term liability by benchmarking it to the consumer price index, in a move that could save £2.5bn.

The urgency of the timetable to secure the future of Tata Steel's UK operations, which directly employ more than 11,000 people, means that the consultation period will only run until 23 June.

Unions are warning of "unmitigated disaster", if the scheme has to go into the Government's Pensions Protection Fund, with workers and pensioners taking a cut in benefits.

A statement from Community, Unite and the GMB, said: "There has been a lot of speculation that any sale of Tata's assets would involve the BSPS going into the Pension Protection Fund (PPF).

"We will seek to work constructively with the UK Government and the scheme trustees to deliver the best possible deal for our members."

The unions are seeking "cast iron" safeguards to any changes to ensure they don't lead to employers "dodging" their responsibilities.

Steve Webb, director of policy at pensions firm Royal London, said: "A deal on Tata must not create a precedent or a loophole which could be exploited by firms keen to walk away from their pension liabilities. Ministers must tread with extreme caution in this area."

Secretary of State for Work and Pensions Stephen Crabb said: "Britain's steel industry is an important part of our economy which is why we are doing everything we can to support it and secure a long-term viable future.

"As part of this it's right that we do all we can for the British Steel Pension Scheme, to support a sale and deliver clarity for scheme members."

The Indian-owned Tata Steel announced a sharp rise in fourth-quarter losses on Wednesday, and said the process of finding a buyer for its UK operations was continuing.

Bidders include the management of the vast Port Talbot steelworks through a vehicle called Excalbur, and the American billionaire Wilbur Ross, whose interest was revealed last month by Sky News.

(c) Sky News 2016, source Sky News

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