Port Talbot’s steelworks could be part nationalised

TAXPAYERS’ money could be used to rescue the steel works at port Talbot, it emerged last night.

Business Secretary Sajid Javid yesterday revealed the Government will consider the part-nationalisation of Tata Steel’s crisis-hit Welsh plant.

His surprise admission came as thousands of jobs were saved at the Indian group’s Scunthorpe operation after a £400million deal with investment firm Greybull Capital was confirmed.

The deal will also see a revival of the British Steel name, which was dropped nearly two decades ago when the industry was privatised.

Britain’s steel industry has been in crisis for months, blamed on cheap imports from China and huge energy costs. Mr Javid said the Government would consider jointly investing with a buyer to secure the sale of Tata’s other UK assets following confirmation of the Scunthorpe rescue.

He added: ‘I’ve been in contact with potential buyers, making clear that the Government stands ready to help. This includes looking at the possibility of co-investing with a buyer on commercial terms.’

Tata, which has operations across the UK, including Rotherham, Corby and Shotton, announced last month that it would sell all its British businesses, putting 15,000 jobs at risk.

Greybull, which previously turned failing airline Monarch into a profitable business, has not ruled out buying other parts of Tata steelworks but it is thought unlikely it will take on port Talbot, which employs about 4,000 people and is losing £1million a day. Tata said it would contact ‘many tens’ of potential buyers.

Gareth Stace, director of trade association UK Steel, said: ‘ A long-term investor is needed, in the very short term, for the remainder of the whole of the Tata Steel UK business, including port Talbot.’

Greybull has agreed to buy the Scunthorpe-based steelworks for £1, saving 4,400 jobs. However, workers have been asked to agree to a oneyear pay cut of 3 per cent and reductions in the contributions they and the company make to their pensions. It could mean a loss of about £1,800 for the average worker paid £30,000.

The firm has promised to invest £400million – a mixture of its own funds and bank borrowings – to turnaround the struggling steelworks.

The deal includes the Scunthorpe plant, two mills in Teesside, one in north- east France, an engineering workshop in Workington and a design business in york.

Despite the pay cuts, the rescue of Scunthorpe is a relief to an industry that has already shed more than 5,000 jobs in the past year.

Unions also welcomed the deal and have urged workers to vote for the package. A ballot will take place on April 19, ahead of the final sale.

Martin Foster, of trade union Unite, said: ‘It should not be forgotten that many workers have already lost their jobs at Scunthorpe and those that remain are making huge sacrifices with their pay and pensions to secure their jobs.’

Steel union Community said it had hired an independent expert, Syndex, which has assessed and backed Greybull’s deal, calling its plans ‘robust’.

It said the investment group has the ‘necessary capabilities to build a sustainable business’.

‘Government stands ready to help’