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| Version 1 | Version 2 |
|---|---|
| Pension benefits may be cut in bid to solve Tata Steel crisis | 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. | 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. | 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. | 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. | 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. | 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. | 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". | It was thought the company might announce a shortlist of bidders, but Tata would only say that bids were still under "active consideration". |
| 'No stone unturned' | |
| Business Minister Anna Soubry told Channel 4 News: "We have always said we would do everything we can to look at pensions. | |
| "The Prime Minister said 'no stone to be unturned' and that is exactly what has been done." | |
| Mr Jones told the programme that there were better ways of dealing with the scheme than putting it in the Pensions Protection Fund, which would take on the deficit, but would also result in members losing some of their benefits. | |
| "The UK government has more levers it can pull than we can with its control of the tax system and pensions legislation," he said. | |
| Analysis: Simon Jack, BBC business editor | 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. | 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. | 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. | 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. | 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. |
| Who are the potential bidders? | |
| Jack: How Excalibur and Liberty could join forces | |
| The rise and fall of Britain's steel industry | |
| Last month Mr Javid told MPs that potential buyers of the UK steel business were being deterred by the deficit in the pension scheme. | |
| Earlier in May, it said there had been seven expressions of interest in its UK business. Among those reported to have put their hats in the ring are Greybull Capital, which has already bought Tata's long products business. | |
| The management buyout vehicle, Excalibur Steel, which is led by Stuart Wilkie, the head of Tata's UK strip steel unit based in south Wales, is another. | |
| Sanjeev Gupta's Liberty House, which has acquired two of Tata's smaller mills, has also expressed an interest. | |
| While they have submitted independent bids, it is thought there is potential for them to work together. | |
| Others said to be in the running include JSW Steel, which is India's second biggest steel producer, China's Hebei Iron and Steel Group, and Endless, one of the UK's largest turnaround specialists, based in Leeds. |