Buyers for Tata invited to submit proposals

POTENTIAL buyers for Tata steel will be invited to come forward from Monday as the Business Secretary pledges Government support for power, plant and procurement needs.
British Business Secretary Sajid Javid, center, returns after a meeting with Tata chairman Cyrus Mistry at the Bombay House, the Tata group's headquarters, in Mumbai, India, Wednesday, April 6, 2016. India's Tata Steel had earlier announced plans to sell its loss-making U.K. plants, which employ almost 20,000 people. The steel industry in Britain, as in many developed economies, has been hit hard by cheap Chinese imports, which have depressed prices. (AP Photo/Rajanish Kakade)British Business Secretary Sajid Javid, center, returns after a meeting with Tata chairman Cyrus Mistry at the Bombay House, the Tata group's headquarters, in Mumbai, India, Wednesday, April 6, 2016. India's Tata Steel had earlier announced plans to sell its loss-making U.K. plants, which employ almost 20,000 people. The steel industry in Britain, as in many developed economies, has been hit hard by cheap Chinese imports, which have depressed prices. (AP Photo/Rajanish Kakade)
British Business Secretary Sajid Javid, center, returns after a meeting with Tata chairman Cyrus Mistry at the Bombay House, the Tata group's headquarters, in Mumbai, India, Wednesday, April 6, 2016. India's Tata Steel had earlier announced plans to sell its loss-making U.K. plants, which employ almost 20,000 people. The steel industry in Britain, as in many developed economies, has been hit hard by cheap Chinese imports, which have depressed prices. (AP Photo/Rajanish Kakade)

Sajid Javid made the commitment after he travelled to Mumbai for high-level talks with the Asian multi-national Tata following the firm’s announcement it was pulling out of its UK-based operations.

Britain’s biggest steel plant Port Talbot, and sites at Rotherham and Hartlepool and 10 other operations across the UK, all face closure and 15,000 job losses if a buyer is not found.

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Tata’s Scunthorpe plant is already in the middle of a £400m buy out deal with Greybull Capital.

Mr Javid said: “[Tata] will start the formal sales process by Monday.”

However despite calls from steel union Community and Labour MP for Middlesbrough South and East Cleveland Tom Blenkinsop that the sale period must be several months long, the lack of a definite time-table for the sale could lead to further anguish for steel workers.

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

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Mr Javid’s meeting in India comes after heavy criticism that he should have attended in person Tata’s board meeting in which the decision was made to sell off its UK operations, which is bought from Corus, previoulsy British Steel, in 2006.

Despite pleas to nationalise Port Talbot by Welsh First Minister Carwyn Jones, the Government has so far failed to commit to public ownership but instead reiterated its support for any buyer coming forward.

Mr Javid said: “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.

“We’ve already done much to help the industry, but there might be some issues specific to this business.

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“So we’re listening, we’ve worked on this for a while, and we want to work with any potential buyer to see how we can help.

Potential buyer Liberty House, which recently took on the running of steel mills in Scotland and a site in Newport has already thrown its hate into the ring, and Mr Javid hopes more offers will come forward.

He said: “I think more will do so once the formal process begins, but I can only talk about what’s public.

“But publicly, one company that’s come forward, for example, is Liberty International, which already has an interest in the UK steel industry.

“I met with them yesterday.

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“So that’s just one example of someone that’s come forward. But 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.”

The future of British steel rests on a knife-edge as up to 40,000 jobs could go without a buyer.

Alfie Stirling, IPPR Research Fellow, said: “The effects of plant closures on the UK could be very serious indeed.

“Our new analysis shows that there is significant fiscal and economic cost to inaction, which the government must take account of when considering its options for Tata Steel.

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“It is of the upmost importance that the government recognise that the UK economy is more resilient when we retain a more diverse industrial base. The steel crisis acts as a reminder that we need to work harder to embed our core material producers into supply chains around strategic sectors like car-manufacturing and aerospace engineering.”

IPPR estimate that if the UK loses 40,000 jobs this year from Tata Steel plants and their suppliers, the cost to government in 2016/17 could be £0.8bn, or £2.2 million per day.

This reflects lost revenue from income taxes and VAT, and additional benefit payments.

Over the course of 10 years this could come to a cumulative total of £4.6bn.

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In addition, the economy will also suffer from a drop in spending from affected households by £0.5bn in 2016/17, worth a cumulative total of £3bn over ten years.

On Monday following Parliamentary recess MPs part of the All Parliamentary Group on steel will meet with Mr Javid in Westminster and are likely to ask for a long time-table for the Tata sale to produce viable offers.