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Pension benefits may be cut in bid to solve Tata Steel crisis | |
(35 minutes later) | |
The government is considering cuts to British Steel pension benefits in a bid to save Tata Steel's UK operations. | |
On Thursday, ministers are expected to announce a consultation on proposals that the annual pension increase be based on the Consumer Price inflation measure, which is usually below the Retail Price measure currently used. | |
Tata Steel is currently considering bids for its loss-making UK operations. | |
That sale process has been made more difficult by the £485m pension deficit. | |
In total the British Steel pension scheme has 130,000 members; it is not clear how many of those would be affected by the new proposals. | |
Business Secretary Sajid Javid and Welsh First Minister Carwyn Jones visited Mumbai on Wednesday to meet Tata executives. | |
It was thought the company might announce a shortlist of bidders, but Tata would only say that bids were still under "active consideration". | |
Last month Mr Javid told MPs that potential buyers of the UK steel business were being deterred by the deficit in the pension scheme. | |
Analysis: Simon Jack, BBC business editor | |
The pension fund and its deficit have been a source of unease for the current owners Tata and a deal-breaker for any would be buyers. | |
Reducing its burden will make a sale easier and may even convince Tata to hang on to its UK steel business. | |
Any such change would be very controversial as it would set what some would see as a dangerous precedent. | |
The move is evidence of the Business Secretary's sense of urgency to resolve an industrial crisis which has put 10,000 steel workers' jobs in imminent danger. |