Tata Steel set to sell all its UK plants

Tata Steel set to sell all its UK plants

THE giant Indian conglomerate Tata Steel is set to pull out of all its UK operations, including Port Talbot, in a move that could put thousands of jobs at risk.

The company announced late on Tuesday night (29 March) that its board had rejected an “unaffordable” turnaround plan for Port Talbot and instead given the green light to a sale of its UK business.

Globalisation, cheap Chinese imports, EU legislation and a government reluctant to help have all contributed to the plight of the industry, it said.

The move will affect about 15,000 workers and comprises the sites that used to make up British Steel and then Corus, which was bought by Tata Steel in 2007.

Port Talbot is Britain’s biggest steelworks and employs 4,000 people. However, it is losing £1m a day, making the prospect of finding a buyer difficult.

Union leaders travelled to Mumbai to discuss the company’s UK business, hoping Tata would agree to a turnaround plan to keep steelmaking in Port Talbot and other UK plants.

The MP for Aberavon, Stephen Kinnock, who was in Mumbai to lobby the Tata board, was briefed after the board meeting by Tata’s chief financial officer.

Mr Kinnock told the South Wales Evening Post on Tuesday night: “We will not allow the closure of Port Talbot steelworks. One way or another we will continue to make steel in Port Talbot, but it looks like Tata do not back the plan. We will work with Tata and the UK government to help find a buyer for the plant.”

The news will affect other Tata plants including Rotherham, Corby and Shotton. It is already in the process of selling its business in Scunthorpe to Greybull Capital, an investment firm.

In a statement, Tata Steel confirmed its board had recommended exploring “all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in part”.

Tata blames cheap imports of Chinese steel, high energy costs and weak demand for threatening the future of its UK steelmaking.

It said it had been in deep engagement with the government about “seeking its support to achieve the best possible outcome for the UK business, within the restrictions of state aid rules and other statutory limits”. Tata said these talks would continue.

Union leaders said it was a “very dark day”, while a spokesman for Jeremy Corbyn said the Labour leader was “extremely concerned” about the reports from Mumbai. “The government must act now to protect the steel industry in Britain. Steel production must be maintained in Port Talbot,” the spokesman said.

Corbyn has previously called on the government to take a stake in the steel industry in order to protect jobs and prevent plants from closure.

A crisis has engulfed much of the British steel industry in the past 12 months, with the Redcar steel plant, owned by Thai company SSI, closing late last year with the loss of 1,700 jobs. Port Talbot has already had to bear the brunt of 1,000 job losses announced in January.

Earlier on Tuesday, Labour criticised Sajid Javid, the business secretary, for planning to fly to Australia on a trade visit while the fate of the Port Talbot plant hung in the balance.

A spokeswoman for David Cameron conceded that no British minister was in Mumbai to monitor the progress of Tuesday’s board meeting.

Ahead of the news from Tata, the business minister, Anna Soubry, said the government was determined to ensure that Port Talbot continues to make steel.

 

Team member taking iron samples

Ms Soubry suggested that the government was poised to take action if the plant looked set to be closed, speaking on BBC Radio 4’s Today programme, she said: “We are looking at all manner of options that may or may not be available to us as a government.”

The Plaid Cymru leader, Leanne Wood, seized on the news to call for the Welsh assembly to be recalled to discuss the possible consequences of a sell-off.

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