UK government willing to ‘co-invest’ for Talbot solution

Britain's Business Secretary Sajid Javid told the House of Commons on Monday that the government was working very hard to find a buyer for the South Wales plant being sold by Tata Steel.

Among options being considered was "the possibility of co-investing with a buyer on commercial terms", he said.

Earlier, Tata announced the sale of its Scunthorpe plant to Greybull Capital (See: Tata Steel UK sells long products business to Greybull).

The Long Products Europe business was sold to the investment firm for a token £1. The move will safeguard 4,400 UK jobs, but workers are being asked to accept a pay cut and less generous pension arrangements (Greybull to buy Tata's UK long steel arm for £1).

The future of the larger Port Talbot is still in doubt, however, although at least one potential buyer – the Sanjeev Gupta-led metals trader Liberty House - has expressed an interest.

The government has resisted calls from unions and opposition politicians to nationalise the Port Talbot plant, Britain's biggest steelworks, to safeguard thousands of jobs.

Javid said that the sale process for Port had only just started, but all options are still being explored.

This included "investment or funds from government", Javid said. "But it has to be on commercial terms," he added. "I've been in contact with potential buyers, making clear that the government stands ready to help."

Javid said, "Several weeks ago Tata told me in confidence that they were seriously considering an immediate closure of Port Talbot - not a sale, a closure.

"That would have meant thousands of hard-working men and women could already be out of a job. Thousands more would have been facing a very bleak future. I was not prepared to let that happen."

Tony Burke, assistant general secretary of Unite, said the union would be holding Javid to his commitment to co-invest if necessary. "The penny appears to have dropped that there should be an active government supporting steel and manufacturing as the best hope of securing the future of the industry.

"We look forward to sitting down with the secretary of state to hear more of his plans for co-investment," Burke said.

Emergency debate

MPs will hold an emergency debate on the steel industry on Tuesday, called for by Labour's shadow business secretary, Angela Eagle.

She complained that the government had refused to recall parliament from its Easter break to discuss the news that Tata was selling its UK steel operations.

Tata Steel is losing millions a week and Monday's deal with Greybull took six months to conclude. Group executive director Koushik Chatterjee told a BBC correspondent that the process would be given "due time" without specifying what that might be.

He also said workers should take comfort from the fact that the company had already waited two weeks before starting the process to sell Port Talbot and other assets and that he saw potential buyers in "the tens".

There has already been tentative interest from the steel company Liberty House but the vision outlined by its chairman, Sanjeev Gupta, would require a radical and time consuming restructuring of operations at Port Talbot along with significant government support (Liberty House boss Sanjiv Gupta in talks to buy Tata Steel).

That appeared to be on hand as Javid said the government would be prepared to co-invest with a buyer on commercial terms to secure a sale of Tata's remaining assets. This is a step further than the government has gone before, and, while giving extra hope, also shows just how difficult it may be to find a buyer.