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Welsh steelworkers in pension fight fear being let down by future UK Labour government

14 Apr 2023 4 minute read
ASW workers protesting in Brussels

Martin Shipton

Campaigners who have battled for pension justice for more than two decades say they have growing fears that a future UK Labour government will let them down.

In 2002 around 1,000 workers lost their jobs when the Cardiff steelmaking firm Allied Steel & Wire (ASW) went bust.

But they also stood to lose pensions they had paid into, in some cases for many years.

The last Labour government introduced a Financial Assistance Scheme that offered hope to workers like those from ASW whose company pension schemes were unable to meet their commitments.

Employees believed they would get the bulk of what they were entitled to.

But in practice there have been significant cash shortfalls, partly caused by the failure to take full account of inflation when calculating pension rates.

In some cases, pensioners are getting little more than half of what they expected.

The current Conservative government has made it clear that it won’t do more for those affected, so campaigners have recently turned their attention to Labour, believing the party is likely to come to power at Westminster after the next election.

Sir Keir Starmer

So far, however, they have been unsuccessful in their attempts to extract promises from Sir Keir Starmer and members of his shadow team.

Last month Rhys ab Owen, who was elected as a Plaid Cymru MS for South Wales Central in 2021, wrote to Sir Keir on behalf of the ASW pensioners.

He said in his letter: “This year it will be the 22nd year they are still being denied the pensions they were promised. These people believed their occupational pensions were safe and fully protected no matter what difficulties their employer faced.

“There were 140.000 pension victims in the Financial Assistance Scheme. Sadly 25.000 have already passed away, many not seeing a penny of the pensions they trustingly paid for, most of their working lives, including John (Johnny) Jones a former steelworker in Cardiff who sadly passed away earlier this month.

“The previous UK Labour government put a tax on occupational pensions, and with the help of [former Chancellor] George Osborne, the final figure stolen from these funds was £238bn. There were warnings by pension experts that workers could face an old age of financial pain and uncertainty.

“When the banks went bust, pensions were not safeguarded, but banks were bailed out 100% and inflation protected. My constituents wonder why workers were not treated with the same fairness.

“The pension campaigners feel their retirement dreams have been shattered for just putting their trust in UK Ministers.

“While I appreciate you are still formulating your policies for the next Westminster election, I wonder whether you could provide an indication of your thinking for my constituents.

“They need the pensions they were promised and paid 100% for. They would like to be treated with fairness by the next Labour UK government.

“I hope you agree that this is an injustice that has to be addressed. My constituents, rather than enjoying their retirement, have had to fight for the justice they rightfully deserve, not only for themselves but for thousands of others.

“The fight against this inhumane injustice has taken its toll on their health and has impacted their families.”

Cut and paste

John Benson, a former ASW worker who has been a leader of the pensions campaign, said: “Ever since the Conservatives attained power in 2010, we have asked them to support ASW steelworkers against the injustice, but all we have had from Conservative Ministers is cut and paste replies, saying they have no intention of helping us receive the pensions we paid for 100%.

“So I wrote to Shadow Work and Pensions Secretary Jonathan Ashworth, and Sir Keir Starmer, plus virtually every Welsh Labour MP.

“I have been asking what is Labour’s position on our injustice if they attain power at the next election, but their front bench and their MPs have shamefully totally blanked me.

“So I asked Plaid Cymru MPs and Senedd Members if they could write to Sir Keir Starmer on our behalf. Like his fantastic father Owen John Thomas, who was an Assembly Member, Rhys had no problem writing to him, and he has done so much to help since becoming a member of the Senedd.

“But like myself Rhys has heard nothing and we are left wondering whether a future Labour government would help us at all.

“We should never still be fighting for what is rightfully ours, 22 years after ASW went into receivership. We should have been receiving our guaranteed pensions from day one.”

We asked UK Labour for a statement but did not receive a response.

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Richard Nicholl
Richard Nicholl
1 year ago

Both Labour and Conservatives have a lot to answer for with regard to their destruction of some of the best pension schemes in Europe. After Maxwell raided his scheme we were assured that this could never happen again, but Gordon Brown and subsequent Chancellors themselves continued to raid the schemes, diluting any promises. They then ignored the EU Directive guaranteeing a pensions safety net, then introduced the FAS with its 90% headline and 50% reality! No wonder confidence in pensions savings is so low! It doesn’t bother them, they are all right Jack, with their taxpayer funded gold plated, full… Read more »

John B
John B
1 year ago

It shameless of Labour to call themselves the party of social justice, yet chose to ignore the biggest social injustice this Country has ever known the deliberate robbing of workers, obviously Labour and Conservatives sing from the same hymn sheet, on the way they stitch up and betray pensioners.

Terry Monk
1 year ago

In 2007 Labour took the lead and tried to Improve FAS .sadly since then minimal support . Since then the hard working members of the failed schemes has spent thousands of hours and pound to seek the justice they fully deserve from all parties . Current Government tried to avoid compliance with the ECJ at a cost to the tax payer of several millions of pounds , We are proud of the efforts of the former ASW workers as should every reader be proud

Philip Jones
Philip Jones
1 year ago
Reply to  Terry Monk

It is an absolute disgrace how the former ASW workers along with the 140,000 other recipients of the governments Financial Assistance Scheme have been treated after having their pensions cruelly stolen from them through no fault of their own. These pensioners saved for their retirement without having to rely on government handouts in later life, we played by the governments rules, our pensions were supposed to have been Safe and Protected, yet in reality we lost the majority of our hard earned pensions with many pensioners now facing a bleak retirement in poverty. The FAS is a scheme that is… Read more »

Christopher Dacey
Christopher Dacey
1 year ago
Reply to  Philip Jones

I joined ASW Allied steel and wire, formally G.K.N In 1971, my service at the time the company went into administration in 2002 was 31 years service, devastating news, after 31 years, but even more so the news that we had lost our pensions which we were told were guaranteed. Then the so called good news that we would be awarded 90% of our lost pensions with the government financial assistance scheme, the union Community formally I.S.T.C General Secretary Mick Leahy OBE celebrated the victory. What was the victory 90% of what. Pre 1997 would not be index linked, so… Read more »

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