Tata Steel crisis: business secretary says a rescue deal can still be done

Sajid Javid

Sajid Javid has urged Tata Steel to push on with selling its UK business and insisted there is enough time to secure a rescue deal as he was confronted by hundreds of steelworkers in Port Talbot.

The business secretary, on his first visit to the crisis-hit site since its future was thrown into doubt three days ago, urged Tata to act as a responsible owner amid growing concerns no buyer would be found in time and the business would collapse into administration.

Javid left Port Talbot in a government Jaguar, after several hours of talks, to shouts of “save our steel, save our steel” from workers.

The former investment banker has been heavily criticised for his handling of the crisis after flying to Australia on an official trip with his daughter on the day the board of Tata met to decide the future of its UK business and Port Talbot, the biggest steelworks in the country. However, Javid said he had no regrets over taking his daughter on the trip and denied it was a jolly.

More than 40,000 jobs are at risk after Tata Steel announced it plans to pull out of the UK steel. The business employs around 15,000 people, with another 25,000 jobs in the supply chain reliant on its operations.

Tata sources have warned there are just “weeks” to find a buyer. The UK business is losing more than £1m a day, has pension liabilities of almost £15bn and needs significant investment. Tata has hired PwC as an adviser, which is a well-known insolvency practioner, suggesting that administration could eventually be a realistic prospect.

However, Javid insisted he had “no reason to think there’s any planning process for administration”.

He said: “I think the most immediate need is for Tata to set out its offer document with the details and to make sure that all potential buyers have all the relevant information they would need.

“You would naturally expect them to want that as early as possible so they can complete the due diligence as quickly as possible. It’s also then important that when Tata do that, we the UK government interact with any potential buyer that shows interest to see how we can help.

He added: “There have been all sorts of reports on the weeks and the time that it may or may not take. The reality is finding a buyer is not a straightforward process because any potential buyer wants to do due diligence and also from our perspective, the UK government perspective, we realise that a potential buyer may require the help of the UK government.

Workers wait to speak to business secretary Sajid Javid as he leaves Tata Steel in Port Talbot.
Workers wait to speak to business secretary Sajid Javid as he leaves Tata Steel in Port Talbot. Photograph: Ben Birchall/PA

“When I say we think we can secure a long term viable solution is that we will work with potential buyers and listen about how we can help.

“The confidence that I have from Tata, is that they have shown in the past as a group whenever they have been in similar situations where they want to divest themselves of a certain interest, they have acted responsibly and I would expect nothing different this time round.”

However, the business secretary refused to rule out the prospect of Tata’s UK steel empire being broken up.

“I don’t want to speculate on what a potential new buyer would and would not want but it is important that the process starts now right away and I expect Tata to be very responsible,” he said.

Javid reiterated his opposition to nationalising Port Talbot. He said: “I think almost everyone agrees that nationalisation is not a long term viable solution. What everyone wants to see is something that’s viable for the long term.”

The government has been criticised for the pace of its response to the steel crisis, with Javid not only accused of being “asleep at the wheel” by visiting Australia this week, but also blocking European Union attempts to increase tariffs against imports of Chinese steel, which Tata claims is one of the main challenges facing its business because it is dragging down prices.

Asked whether he regretted taking his daughter on a trip to Australia, he said: “Oh not at all ... Call me old-fashioned but I’m a father who likes to spend as much time as possible with my children and if that means spending time with them, squeezing it in at work or on a business trip then that’s what I would do.”

Responding to criticism that it made the trip look like a “jolly”, he said: “Well I certainly wouldn’t call going to Australia a couple of days and packing it with meetings a jolly.”

Javid also claimed that the UK had led calls in Europe for higher tariffs against Chinese steel, rather than opposed them.

“We haven’t stopped the EU raising any tariff, in fact I would like to see the EU making sure that their tariffs are high enough to stop dumping or to remedy any challenges faced by the industry,” he said.

“That’s their current rule book and I think that within their current rule book they can do more both in terms of speed, how quickly they look at these issues, but also in terms of the height of these tariffs themselves.

“I think it’s important as well that we the UK have led the process. Contrary to stopping things we have actually been asking for things and leading the process and that started months ago.”

Speaking to hundreds of Port Talbot workers outside, including one who handed him a Save Our Steel badge, Javid said he expected there to be formal expressions of interest once the sale process officially launched and described steel as “absolutely vital to the future of the UK industrial sector”.

He told anxious staff: “It would be wrong of me for commercial reasons to name people that are expressing interest. There will most certainly be people. I can’t tell you today who they are and what that is, the process is just beginning.”

He also insisted there is time to reach a deal, saying: “Yes, I think the time is there. The meetings today have been constructive. But also, with Tata management in India as well. They have been very responsible, they have shown in the past that as a group they are responsible company. They have had to sell things in the past and I take confidence from that and so should you.”

However, workers were not convinced. Lyndon Jones, who has worked at the steelworks for 30 years, said: “We feel abandoned by the government.

“I don’t think the government wants an industry. In this country we are happy for other people to come into our country and sell commodities.”

Adrian Morgan, a 27-year veteran at Port Talbot, said: “It would be devastating for South Wales as a whole if it closed. The next biggest employer in the area is Amazon. We have family and friends on zero-hour contracts who turn up at the gate and say they are not needed.”

Powered by Guardian.co.ukThis article was written by Graham Ruddick, for theguardian.com on Friday 1st April 2016 19.30 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010