Tata board will grant Port Talbot time to find buyer, says Sajid Javid

Sajid Javid

Sajid Javid has said that he has received assurances from Tata that it will allow time to find a saviour for its British steelmaking business, including the Port Talbot plant.

The business secretary said Tata will impose “no set time-frame” on the sales process and sought to assuage fears that the company could shut the loss-making Port Talbot steelworks within weeks after meeting its senior figures in Mumbai, including the chairman, Cyrus Mistry.

Javid said the official sales process for Tata’s steel business will start by Monday, with the company sending out a sales document and appointing advisers.

“What they have said is that they will allow a reasonable amount of time for this process to be completed,” Javid said.

His comments were supported by the tycoon behind Liberty House, which is interested in buying Tata’s UK business. Sanjeev Gupta told the Guardian that it is not in Tata’s interests to close the sites and it would cost the company “billions and billions”.

The government is keen to demonstrate it has a grip on the steel crisis after Javid was forced to return early from a trip to Australia last week when Tata announced it was putting its UK assets up for sale.

No minister was in Mumbai last week when the board meeting was held at which the decision was made to reject a costly investment plan and put the British steel business up for sale, and Labour accused the government of being “missing in action”.

The Labour leader, Jeremy Corbyn, called on Javid to allow union representatives to be involved in the process to select any potential buyer of the business.

“The workforce’s union representatives have to be part of any negotiation or assessment of bids,” he said, adding that if the government provides taxpayer-backed help to any potential buyer, it must also take a stake.

Angela Eagle, the shadow business secretary, pointed out that the government had had ample warning of the looming crisis in the steel sector, with Labour MPs raising the issue more than 200 times since the general election.

But speaking in Mumbai after meeting Tata, Javid said the government was now determined to do everything it could to enable a sale.

Business secretary Sajid Javid, speaking from Mumbai, says Tata Group is planning to begin a sales process for its UK plants

“The UK government has made it clear to any potential buyer that we understand that there’s going to be some issues – whether they’re to do with power, with a plant, with procurement – whatever those issues are, that we might be able to help with and help further,” said Javid.

He added that a number of potential buyers, including Liberty House, had already come forward and said: “What I’d like to see is many more come forward, and I hope that’s what happens when the formal process begins, and I’m sure it will.”

Gupta, who held talks with Javid on Tuesday, said the UK and Welsh governments were “very motivated” to find a solution for the steel industry. He also played down fears that Tata could close Port Talbot and the rest of its UK sites before a buyer can be found.

“It is certainly not in their interest in any shape or form to shut it down,” he said. “The cost would be far, far, far greater [than finding a buyer]. If you talk about the pension liabilities, if you talk about the environmental liabilities, the redundancies – the costs would be enormous, it would be billions and billions. So I don’t see them wanting to shut it down.”

Gupta said the government has stated it will not provide cash towards a rescue deal.

“I don’t know about money because they said they can’t do anything which constitutes state aid,” he said. “So they won’t be able to give anybody money per se, but they can solve problems like power or they can provide commercial loans and things. But they can’t actually give money, that’s against EU regulations.”

Gupta admitted that it would be a “big step forward” for Liberty to buy Tata’s business, which employs 15,000 people, but said that he expects to make a proposal to the Indian company when the sales process start.

Trade unions also welcomed Javid’s comments. Roy Rickhuss, general secretary of Community, said: “I am encouraged to learn that Tata has committed to be a responsible seller and to allow the time we need to secure a new commercial operator.”

Javid’s meeting in India came as the archbishop of Wales, Barry Morgan, warned about the social and economic costs if the Port Talbot plant closes and criticised the government’s inaction.

“It raises the question of an industrial strategy for the UK, since steel is the foundation of the manufacturing base of this country and affects many other industries,” he said.

Dr Morgan, who is also bishop of the Diocese of Llandaff, which includes Port Talbot, said: “I am not an economist but it is a fact that business rates in the steel industry in the UK are much higher than in other parts of the EU and energy costs per ton of steel made in the UK are more than double those of Germany.”

“The danger is that if all steelmaking plants are closed, once they are gone, the price of steel will increase and that will have far reaching repercussions on our economy and industry.”

Powered by Guardian.co.ukThis article was written by Heather Stewart and Graham Ruddick, for The Guardian on Wednesday 6th April 2016 20.29 Europe/London

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