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Tata steelworkers in the UK have voted to accept the closure of their £15bn pension fund, in a historic sacrifice that brings closer into sight an end to the steel crisis.

Thousands of trade union members were asked to have their say on a rescue package that Tata Steel had put on the table for its troubled British operation, whose future was under threat, at the end of last year.

The proposals contained commitments on jobs, £1bn of investment and a promise to keep running the twin blast furnaces at the Port Talbot steelworks in South Wales until at least 2021.

In exchange, Tata wanted to shut the British Steel Pension Scheme, which it said had become a financial drag on the lossmaking business, to further contributions.

Although the affirmative ballot result is a step towards safeguarding Britain’s largest steel producer, further action is still required.

Another condition of the package was the removal of the frozen pension scheme, for which Tata remains responsible, from the shoulders of the business.

The Indian group is in talks with the scheme’s trustees and regulators over a proposal that would make the fund a standalone entity that is financially self-sufficient and without recourse to the company.

Roy Rickhuss, general secretary of the Community union, said:

Steelworkers have taken a tough decision and have shown they are determined to safeguard jobs and secure the long-term future of steelmaking. Nobody wanted to be in this situation, but as we have always said, it is vital that we now work together to protect the benefits already accrued and prevent the BSPS from free-falling into the PPF.

This ballot involved an extremely personal decision for everyone that voted. Whichever way our members cast their votes, we know they will not have taken that decision lightly and everyone’s opinions must be respected.

We now expect Tata to make good on their promises and deliver the investment plan for the whole of their steel business. The UK Government still has an important role to play and we fully expect them to deliver tangible support for steelmaking in the UK.

Members of three trade unions voted as follows:

Community
Turnout: 70.5%
Yes: 72.1%
No: 27.9%

Unite
Turnout: 69.2%
Yes: 75.6%
No: 24.3%

GMB
Turnout: 51.5%
Yes: 74.0%
No: 26.0%

Copyright The Financial Times Limited 2017. All rights reserved.
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