MPs grill Javid over future of Tata Steel

Business Secretary Sajid Javid talks to workers as he leaves Tata Steel in Port Talbot, South Wales.
Business Secretary Sajid Javid talks to workers as he leaves Tata Steel in Port Talbot, South Wales.
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Business Secretary Sajid Javid will be hauled in front of MPs and urged to prepare to temporarily nationalise Tata Steel to save tens of thousands of jobs in the UK.

Sheffield MP Clive Betts will be among up to 25 members of the All Party Parliamentary Group on Steel set to quiz the minister on plans to ensure the business has a future.

Sheffield MP Clive Betts is a member of the All Party Parliamentary Group on Steel

Sheffield MP Clive Betts is a member of the All Party Parliamentary Group on Steel

Tata has put its loss-making UK operations up for sale, affecting 15,000 employees including more than 2,000 in South Yorkshire.

It is understood to want a quick sale, but Mr Betts said that was “unrealistic” and the government had to be ready to step in.

Up to 40,000 jobs - including those in the supply chain - could be lost if Tata shuts down.

Mr Betts said: “I think the Government is extremely worried about letting Tata go. It would be seen as a massive failure, one where they have not acted on behalf of British industry.

“I’m optimistic we can push government kicking and screaming into a place they don’t want to go.

“They first said anything is possible. Then anything was possible short of nationalisation. But we’re keeping the pressure on.

“Negotiations over a takeover may take some time, if Tata decides to close in the meantime the government has to be prepared to step in. There may be a case for temporary nationalisation.

“I think there are possibilities for saving most of the steel industry. Any industry like this goes through cycles. It’s in a bad place at present and some capacity somewhere in the world will go. We just need to hold our nerve.”

The all party group is also set to discuss with Mr Javid ways of making the business more attractive to potential buyers, Mr Betts said.

They include subsidising energy prices, reducing business rates, blocking Chinese steel dumping and tackling the pension fund, which is billions in deficit.

Mr Betts said Germany had pumped £90bn in subsidies into cutting energy prices for its steel industry - compared to £30m in the UK.

They would also press Mr Javid to agree to a scheme exempting investment in plant and equipment - which add to the value of a factory - from business rates.

The move, which avoids breaking state aid rules, was first requested at a steel summit attended by Mr Javid in Rotherham in November. But the Budget last month contained no relief, Mr Betts added.

The government has also been accused of failing to support European countries including Italy and France in trying to block Chinese steel dumping - subsidised sale below cost price.

Mr Betts added: “They have a different view about what can and can’t be done.

“Everyone could see this problem coming down the road. I think they thought things would muddle through.

“Ministers have offered only warm words so far. Time is running out. It’s time for action.”