Rotherham Council faces tax losses over Tata

THE CLOSURE of Tata Steel's Rotherham operations would leave a multi-million pound black hole in the local council's finances, an MP has warned.

An MP has warned the closure of Tata's Rotherham plant could have dire consequences for council finances
An MP has warned the closure of Tata's Rotherham plant could have dire consequences for council finances

Tata is the biggest single payer of business rates in Rotherham and responsible for almost £1 in every £20 collected from local firms by the authority.

Councils currently keep half the business rates they collect meaning the closure of Tata’s operations in the town would see the local authority lose £1.6 million a year.

Sign up to our daily newsletter

But in the coming years Ministers want councils to keep all of their business rates to try and reduce their dependence on Government funding, a move which would extend Rotherham’s losses to £3.2m.

Figures calculated by Wentworth and Dearne MP John Healey suggest the knock-on effect on other firms in Rotherham would take the total hit on the council’s business rates income to £5.8m.

In a letter to Business Secretary Sajid Javid, Mr Healey writes: “Local council taxpayers cannot be expected to cover the shortfall, nor can a council be expected to cut an extra four per cent of their Budget when their area suffers such a big closure over which they have no influence, in this case business decisions taken in Mumbai.

“If you want to demonstrate your support for UK steel and UK steel communities, then I ask you to confirm that you will guarantee to fill the business rates gap in full.”

The hunt is on to find a buyer for Tata’s operations across the UK after the company decided last week to pull out of the UK.

On visit to Tata in Rotherham today, Business Minister Anna Soubry expressed confidance that it has a future, describing it as a “genuinely viable business”.

“I can’t imagine anyone not coming forward to buy this place,” she said.

“It could be said this place had been forgotten amid all the reporting on Tata, but it has a genuine future.

“It needs the right buyer to put in long term investment into this place. It’s a very important and successful part of the British steel industry.”

Mr Javid and Cabinet Office Minister Oliver Letwin met a senior Tata official today and the Prime Minister will hold talks with Welsh First Minister Carwyn Jones over the future of the Port Talbot steelworks tomorrow.

Mr Jones told the Welsh Assembly today all options should be considered to keep the steel industry alive.

He said: “If a buyer cannot be found within the sales period, the UK Government must take the plants into public ownership until a buyer can be found.

“We are driven not just by sentiment.

“We are not arguing to prop up a dying industry. Wales needs steel. Britain needs steel.”

Union leaders are hoping to present a plan to rescue Tata’s UK arm with Government help tomorrow.

It is likely to say that £1.5 billion needs to be invested over 10 years with the Government providing support over the first few years while the UK businesses return to profit.

Harish Patel, national officer of Unite, said: “Steelworkers are united in their view of what the Government must do. This business should have a future but it needs immediate action to reassure customers and protect the integrity of the business.

“We don’t want to hear more warm words from ministers. We want Government to work with us to deliver this plan, invest in the future of steelmaking and protect the jobs of thousands of steelworkers across the UK.”