‘Taxpayers to help fund steel rescue deal’

Tata Steel. Photo: PA
Tata Steel. Photo: PA
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THE GOVERNMENT is reportedly planning to use taxpayers’ money to save thousands of steel industry jobs.

The Department for Business, Innovation and Skills is set to provide a loan of £70m to £80m towards funding a takeover of Tata’s Scunthorpe steelworks by the turnaround fund Greybull, according to The Sunday Telegraph.

Nic Dakin, the Labour MP for Scunthorpe, said he would welcome any Government action to transfer the ownership of the site to Greybull, which is probably best known in the UK for buying a majority stake in Monarch, the low-cost airline, in 2014.

Greybull Capital is in talks with Tata Steel about a possible rescue package for Tata’s long products business, which is based in Scunthorpe and employs 4,700 people across Europe.

Mr Dakin said that a cross-party group of MPs representing constituencies with steel workers had consistently called on the Government to take action to level the playing field, so that the UK steel industry can compete with its competitors.

He added: “The Government has acted too slowly on energy costs, procurement rules and Chinese dumping.

“It needs to do more on all these things and this week’s Budget would be a good opportunity to tackle the inequality in business rates costs which are falling on UK steel and manufacturing.

“In addition, anything the Government can do to support a successful transfer of ownership of the Tata Long Products Business, that includes the Scunthorpe site, would be very welcome.

“I know that Tata, Greybull Capital, Community and the other trade unions as well as key suppliers, have been working really hard to establish a positive, sustainable future for this crucial UK business.

“It would be right and proper if the Government were able to signal its willingness to play its part in ensuring UK steel has a successful future to match its successful past.”

The Sunday Telegraph said that Government support will be crucial in ensuring the sale of the steel works goes through.

A Department for Business, Innovation and Skills spokesman said: “We are in regular discussions with the companies (involved), but we are not making any comment at this stage.”

A Greybull spokesman confirmed that the talks are continuing constructively.

The Yorkshire Post understands that the Government has been closely involved throughout the sales negotiation process.

It is understood that talks surrounding the potential sale could extend beyond the initial deadline of March 31, if necessary.

A Tata spokesman said: “ We do not comment on speculation and rumour.”

Tata signed a Letter of Intent with Greybull Capital for the potential sale of its Long Products business in December.

At the time, Tata said the move would lead to exclusive negotiations with the investment firm. The talks covers several UK-based assets including the Scunthorpe steelworks, mills in Teesside and northern France, an engineering workshop in Workington, and a design consultancy in York.

Unions welcomed the announcement, which followed a spate of job losses in the steel industry and fears for the future of Tata’s Long Products business.

Speaking in December, Karl Koehler, chief executive of Tata Steel’s European operations, said: “This is an extremely critical time for the whole industry, and we have been working hard to explore all options that could provide a future for the Long Products Europe business.

“We will now move into detailed negotiations with Greybull Capital.

“It is too early to give any certainty about the potential outcome of these discussions. We will continue to work closely with our trade unions and works councils.”

Tata Steel has been forced to slash costs and cut thousands of jobs since 2007 when it bought Anglo-Dutch producer Corus for $13bn (£8.7bn), making it Europe’s second largest steelmaker.

Andrew Percy, the Conservative MP for Brigg & Goole, said that the Prime Minister had made it “absolutely clear” that the Scunthorpe site was of strategic importance. Mr Percy said he welcomed any action that helped to get the deal to rescue the steelworks over the line.

Earlier this year, a spokesman said the Government had taken “clear action” to help the industry, through a series of measures, including cutting energy costs, and by taking action on imports, Government procurement and EU emissions regulations.