Taxpayer could take stake in steel business to help save jobs

Tata's Rotherham operation
Tata's Rotherham operation
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A SOUTH Yorkshire MP has welcomed the Government’s offer to take a stake in Tata Steel’s UK business as part of a deal to save thousands of jobs.

Business Secretary Sajid Javid confirmed the taxpayer could take a 25 per cent stake in the business to help potential buyers.

India-based firm Tata has confirmed it wants to offload its UK operations which include sites in South Yorkshire and the Port Talbot steelworks in South Wales.

A failure to find a buyer would put thousands of jobs at risk and Ministers have been under pressure to demonstrate they are doing all they can to help potential suitors.

The willingness to use taxpayers’ money to take part ownership of a business is a major departure from the approach taken by Conservative governments over the last 3o years.

The Department for Business, Innovation and Skills stressed the Government would “not acquire a material element of control over the business” and Downing Street rejected the description of the offer as “part nationalisation”.

Wentworth and Dearne MP John Healey said: “I welcome this announcement by the Government as it shows that, after weeks of dragging its feet, it has finally recognised how vital this industry is to the UK economy.

“Anything that makes the chance of a deal more likely is good for workers and their families who are living through a period of intolerable uncertainty about their future.

“The offers on the table for Rotherham and Stocksbridge have come as no surprise to people in the region given the high quality of South Yorkshire specialty steel.

“What we need to see now from Government is swift action to ensure that UK steel gets the long-term investment needed to protect jobs and communities.”

The Government said it was willing to offer support worth “hundreds of millions of pounds” to help secure a deal to keep Tata’s UK sites running.

It is thought lending a potential buyer money on commercial terms is the most likely way the Government would play a role.

Mr Javid said: “This Government is committed to supporting the steel industry to secure a long-term viable future and we are working closely with Tata Steel UK on its process to find a credible buyer. The detail of our commercial funding offer is clear evidence of the extent of that commitment.

“Ministers have visited Tata Steel sites across the country and the pride and dedication of the highly-skilled men and women working there is obvious to see.

“We have already delivered on energy compensation, on tackling unfair trading practices and on procurement of British steel, and we will keep on going further to support this vital industry.”

Roy Rickhuss, general secretary of the Community union, said: “Today’s announcement is a positive step forward. This is a clear commitment to financially assist the UK steel industry as it seeks new ownership.

“We welcome the willingness of Government to support debt financing and that they remain open to taking a 25% share in the business.”

Tata Steel is negotiating a separate deal with Greybull Capital over the ownership of its Scunthorpe plant where workers this week agreed to take a pay cut if it goes through.