Tata makes commitment to jobs and steel production at Port Talbot, union says
Steel unions say they have a commitment from Tata to secure the future of jobs and production at Port Talbot and other steelworks across the UK.
A number of "significant" measures include keeping two blast furnaces at the South Wales plant for five years, a commitment to seek to avoid compulsory redundancies for a similar period, a 10-year investment plan of £1 billion and consultation on replacing the pension with a defined benefit scheme.
Unions said after a meeting in Port Talbot that the commitments on jobs, production and investment were welcome, although the pension proposal was "worrying".
The future of Tata plants has been in doubt since its UK business was put up for sale in March.
The Indian conglomerate put the sale on hold in the summer as it considered a tie-up with German steelmaker ThyssenKrupp.
Tata employs thousands of workers, including more than 4,000 at Port Talbot, and others at Trostre and Shotton in Wales, Corby, Hartlepool and at sites in the West Midlands.
Roy Rickhuss, general secretary of the Community union, said: "The past year has been incredibly difficult for steelworkers and their families. When Tata announced in March that they planned to sell the steelworks, no-one knew if they would have a job by Christmas.
"This proposal would secure jobs for years to come and bring serious investment not just to Port Talbot but to steelworks across the UK.
"Reaching this stage of the process is a credit to the hard work of our members, who never gave up the fight to 'Save Our Steel' - it was their jobs on the line and it has been their campaign that has brought Tata to this position.
"This is not the end of the process and it will be for all our members to now vote on this proposal. We will continue to work closely with Tata and all levels of government as we seek to build a sustainable future for Britain's steel industry.
"We recognise that today's announcement does not cover the Speciality Steels business in South Yorkshire or the SAW mills in Hartlepool. We will continue to work hard with the companies involved to secure the investment necessary to ensure those businesses grow and that our members are protected."
Unite's national officer, Tony Brady said: "Today's news it a step in the right direction for our industry but there is still a lot more that government can and must do. The Tories say they are committed to an industrial strategy, but steelworkers need more than warm words.
"The commitments made today by our reps must now be followed by a commitment from the Government that they will hold Tata to their word and ensure jobs are protected. The UK steel industry supports our whole manufacturing sector and it is vitally important that the future of that industry is secured for generations to come."
GMB's national officer, Dave Hulse said: "This agreement would mean the blast furnaces at Port Talbot keep making steel and that steelworks across the UK get the investment they need to compete in the future. We've fought hard to save jobs and today's agreement is a credit to our members.
"Today's news is a step forward, but there is still much to be done. We will continue to fight for a level playing field for our industry; for action on energy costs, on business rates, and on the dumping of foreign steel."
Senior union reps from every affected Tata steelworks in the UK met with company executives to discuss the latest proposal, which will now be sent to workers.
The main elements are:
:: Production - A guaranteed minimum five-year commitment to two blast furnace steel-making.
:: Jobs - A jobs pact equivalent to Tata's agreement with steelworkers in the Netherlands, which includes a commitment to seek to avoid any compulsory redundancies for five years.
:: Investment - A comprehensive 10 year, £1 billion investment plan to support steel-making at Port Talbot and secure the future of the downstream sites.
:: Pension - Tata Steel will begin a consultation on the closure of the British Steel Pension Scheme (BSPS) to future accrual, replacing it with a defined contribution scheme with maximum contributions of 10% from the company and 6% from employees.
Unions said the proposal represents a "significant shift" in Tata's opening offer, which included no detailed investment plan, no jobs guarantee, no commitment to two blast furnaces and the closure of the BSPS, with a new scheme of contributions of 3% from the company and 3% from employees.
Unions said the proposal affects 8,000 Tata employees in the strip steel business.
Gareth Stace, director of trade group UK Steel, said: "This news will bring great relief to the workers involved, their communities and the wider industry, and is a testament to the dedication of the workforce and company to find a solution.
"The drive to save our steel sector must not end here, though. This good news must now be backed up by Government through a long-term strategic plan, firmly embedded within a wider industrial strategy, that secures the future of the thousands of livelihoods and businesses relying on this critical industry.
"Action is still required in a number of areas such as the disparity in electricity costs and business rates. As we have seen today though, much can be achieved when we pull together and we look forward to continuing to work with Government to ensure a positive long-term future for the wider steel sector in the UK."
Koushik Chatterjee, group executive director of Tata Steel and executive director for its European business, said: "The agreement between Tata Steel UK and the unions today marks an important step forward in the journey to develop a sustainable future for our UK steel business.
"These are unprecedented times for the steel industry globally, with multiple risks including global economic uncertainty, slow manufacturing growth and currency volatility which continues to present significant challenges to the business.
"The delivery of Tata Steel UK's transformation plan and generation of free cash flows will be the key enabler for the future sustainability of the business and we are very encouraged by the early signs of the delivery of the plan.
"There is much more work to be done to make Tata Steel UK more financially sustainable, but I am confident that all stakeholders will do all they can to try to ensure that the company will be able to achieve its plan in the coming months and years.
"The proposed changes to future pension provision and other employment terms are necessary to de-risk the company and help achieve long-term sustainability. We are also working separately on a necessary structural solution for the British Steel Pension Scheme fund."
Welsh First Minister Carwyn Jones said: "This agreement is great news for the future of steel-making in Wales and a massive shot in the arm for the industry.
"The Welsh Government has worked tirelessly to find a sustainable way forward and ensure the plants did not close, and this announcement is a big step forward.
"I am pleased to announce today over £4 million to develop skills and training for Tata employees, while we have also made significant progress towards defining a wider package of support for Tata to secure the future of steel-making in Wales."
Shadow Welsh secretary Jo Stevens said: "The proposed deal is very welcome but there are still serious questions to answer to protect the longer term future of steel in Wales and the thousands of dependant jobs.
"The Government should have done much more, much earlier to support Tata to ensure steel production in Wales remains viable."
Business and Energy Secretary Greg Clark said: "We welcome today's agreement between Tata and the trade unions to present a proposal to the workforce. This is an important step forward in achieving a sustainable long-term future for steel-making at Port Talbot.
"The Government will continue to work with all parties in achieving this shared goal."
Shadow business secretary Clive Lewis said: "The Government has dragged its feet at every step. It is disappointing that this looks like a significant deterioration of the pension prospects of the workers at the steel plant, whose security in retirement has been weakened by the Tory Government's refusal to offer support.
"We will be keeping a close eye on the consultation as it develops, to ensure that steel workers and pensioners get the best deal possible."