10 Jun 2016

Cuts in benefits and pensions in secret Tata plan to keep Port Talbot?

Channel 4 News understands that Tata are working on a secret plan that would see them keep Port Talbot but cut £100m a year through job cuts and benefits reductions.


This has led to a strain in relations with unions, who claim they are said to feel they’re already bending over backwards because of radical cuts to members’ pensions currently being proposed.

In what this programme was told were an extraordinary series of feisty meetings, staff and a number of Tata bosses have had serious disagreements.

Last week at a town hall meeting, Tata staff are said to have walked out when Bimlendra Jha, the Tata boss who is in charge of selling the UK business, is thought to have alleged to have told the workforce that they should be “grateful that Tata was considering staying”.

On Wednesday, at a UK Steel council meeting, which Business Secretary Sajid Javid attended, tensions rose further with Mr Jha and GMB boss Dave Hulse. Sources within Government said no one came to blows but that routine exchanges may sometimes be “robust”.

Another source said Mr Jha probably failed at being diplomatic – but he was not deliberately trying to be rude.

The purported plan by Tata is particularly controversial because proposed pensions changes will already slash retirement savings for thousands of workers – this was thought to be an incentive for a new buyer rather than a way for Tata to shed liabilities.

But it is thought the Indian company hopes to get a further £100m from policy changes, such as electricity costs and cuts in business rates. And then, they hope to extract another £100m through cost savings delivered through cuts to the workforce.

One senior union official said: “On the 29 March, trust in Tata was shaken when they told us they didn’t want us, and they didn’t want to invest in the UK. If they are determined to keep the business  it can’t be through ringing out more concessions from the workforce.

“We are not prepared to reduce members’ terms and conditions – and we have told them this to their face. They have to convince the workforce and make us believe in them again.”

Officially, Tata are still moving forward with the sales process but insiders claim some bidders have lost faith that Tata will hand the business over if they can get enough concessions from unions and government.

“Tata should not be allowed to get the concessions for their own failure just to fail again in a couple of years or to get a better price. The concessions are a rescue package for a new operator with a new sustainable plan,” said one source.

The political backdrop is further complicated by the possibility of the Secretary of State moving jobs after the referendum.

A spokesman for Tata said: “Tata Steel has consistently said it is committed to running a thorough and urgent sale process for its UK business. That remains the case today. The sales process, supported by specialist advisors and the Governments of the UK and Wales, has involved approaches to around 200 potential investors across the world. As a responsible seller we are engaged with a range of stakeholders to give the best chances of future sustainability for the UK business.”

GMB declined to comment.

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