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Government warned over cutting Tata pension payouts

May 26, 2016 5:51 AM
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The former Pensions Minister has warned that a government plan to reduce pension benefits for steelworkers risks going down a "dangerous path".

The Tata Steel scheme's £485m deficit is one factor deterring potential buyers of its UK operations and ministers are looking at options to reduce the liability.

One proposal is to link increases in payouts to the Consumer Price Index (CPI) rather than the Retail Price Index (RPI), which is normally higher.

But former minister Steve Webb warned against "rushed changes", which could have an impact on other industries.

"Everyone has huge sympathy for steel workers and for efforts to protect jobs, but rushed changes to pension rules risk driving a coach and horses through the pension security of hundreds of thousands of workers well beyond the steel industry."

The Government will announce details of its plans, which are likely to be backed by trade unions, in a written statement later today.

Shadow Work and Pensions Secretary Owen Smith called for a clear explanation of the plans.

"If these reports are accurate, the secretary of state for work and pensions should come to the House to explain precisely what is being proposed, including how current and future steel pensioners will be affected and what precedents might be set by any changes to hard-won pension protection legislation," he added.


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