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Steel crisis: State ready to help on Port Talbot deal - Sajid Javid Steel crisis: State ready to help on Port Talbot deal - Sajid Javid
(about 1 hour later)
The government says it is ready to offer support to secure a buyer to save Port Talbot steelworks where thousands of jobs are at risk. The government says it is ready to offer support to secure a buyer to save Port Talbot steelworks, where thousands of jobs are at risk.
Business Secretary Sajid Javid said he did not think nationalisation was the solution but did not rule it out.Business Secretary Sajid Javid said he did not think nationalisation was the solution but did not rule it out.
He said any buyer would want to look at "plant, pensions and power supply" - which ministers were "working on".He said any buyer would want to look at "plant, pensions and power supply" - which ministers were "working on".
Labour said nationalisation should be considered until a buyer is found, and called for Mr Javid to be replaced.Labour said nationalisation should be considered until a buyer is found, and called for Mr Javid to be replaced.
It comes amid reports of several potential buyers for the Port Talbot plant, following Tata Steel's announcement last week that it was selling its loss-making UK businesses.It comes amid reports of several potential buyers for the Port Talbot plant, following Tata Steel's announcement last week that it was selling its loss-making UK businesses.
Tata's UK business - which directly employs 15,000 workers and supports thousands of others - includes plants in Port Talbot, Rotherham, Corby and Shotton. Tata Steel said it was "committed to running a meaningful process to explore strategic alternatives" for its UK business, which directly employs 15,000 workers and supports thousands of others across plants in Port Talbot, Rotherham, Corby and Shotton.
Australia tripAustralia trip
Mr Javid - who has faced criticism for being on a business trip to Australia at the time - said the government had known "a few weeks ago" that Tata was reviewing its UK operations, including the possible closure of the Port Talbot plant. Mr Javid - who has faced criticism for being on a business trip to Australia at the time of the announcement - said the government had known "a few weeks ago" that Tata was reviewing its UK operations, including the possible closure of the Port Talbot plant.
But he said: "The strength of the announcement and how far they went - particularly what they said about timing - was much further than we expected."But he said: "The strength of the announcement and how far they went - particularly what they said about timing - was much further than we expected."
Mr McDonnell said he was "shocked" that Mr Javid knew about a "critical" Tata meeting held in Mumbai on Tuesday but was in Australia.
"I think we need someone else doing the job. We need someone who's more dynamic," he told the Radio 4's World This Weekend programme.
UK steel crisisUK steel crisis
What's going wrong with Britain's steel industry?What's going wrong with Britain's steel industry?
Tata Steel UK: What are the options?Tata Steel UK: What are the options?
Is China to blame for steel woes?Is China to blame for steel woes?
Speaking on the BBC's Andrew Marr show, the business secretary said the government would do "everything we can" to support the UK steel industry, saying it was "vital" for economic and national security.Speaking on the BBC's Andrew Marr show, the business secretary said the government would do "everything we can" to support the UK steel industry, saying it was "vital" for economic and national security.
He said nationalisation was "rarely the answer" - but it "wouldn't be prudent to rule anything out".He said nationalisation was "rarely the answer" - but it "wouldn't be prudent to rule anything out".
Mr Javid said the government's plan to save the plant - and industry - was to find a commercial buyer for all of Tata's UK businesses.Mr Javid said the government's plan to save the plant - and industry - was to find a commercial buyer for all of Tata's UK businesses.
"We're going to also have to offer support to eventually clinch that buyer and to give this steel plant a long-term viable future," he said."We're going to also have to offer support to eventually clinch that buyer and to give this steel plant a long-term viable future," he said.
Mr Javid said any buyer would want to refer to "the 'three P's' - plant, pensions and... power supply".
He added: "What I hope is that you will have the offer document from Tata, overlay on top of that the help the British government can provide, then you have the makings of a successful deal."
He suggested "more can be done" on the cost of electricity at the plant and on pension schemes to attract potential investors - but he would not be drawn on the details.
He said did not guarantee the plant's future, but said: "I will do everything I can to keep this plant open."
AnalysisAnalysis
By Joe Lynam, BBC business correspondentBy Joe Lynam, BBC business correspondent
It's always helpful when we get clearly memorable acronyms to understand very complex issues.It's always helpful when we get clearly memorable acronyms to understand very complex issues.
In the case of the crisis facing Port Talbot steel workers, Business Secretary Sajid Javid gave us the '3 Ps': plant, pensions and power.In the case of the crisis facing Port Talbot steel workers, Business Secretary Sajid Javid gave us the '3 Ps': plant, pensions and power.
The plant is what type of steel Port Talbot will be making in future. The mass produced or commodity type can be easily undercut by much cheaper Chinese steel - so it needs to focus on more specialist types which can compete on world markets.The plant is what type of steel Port Talbot will be making in future. The mass produced or commodity type can be easily undercut by much cheaper Chinese steel - so it needs to focus on more specialist types which can compete on world markets.
Tata Steel has a pensions deficit of £485m. But it is 97% funded which means few buyers will walk away from the table over relatively small sums.Tata Steel has a pensions deficit of £485m. But it is 97% funded which means few buyers will walk away from the table over relatively small sums.
The final 'P' is the cost of electricity. Making steel is probably the most energy hungry activity you can do. The government has already started refunding companies the additional electricity charges they had to pay as major CO2-emitting industries.The final 'P' is the cost of electricity. Making steel is probably the most energy hungry activity you can do. The government has already started refunding companies the additional electricity charges they had to pay as major CO2-emitting industries.
Subsidising power costs would breach EU state aid rules so finding a clever solution here could be the key to persuading any future owners.Subsidising power costs would breach EU state aid rules so finding a clever solution here could be the key to persuading any future owners.
Mr Javid said any buyer would want to refer to "the 'three P's' - plant, pensions and... power supply". Tata Steel said there was "no fixed timeline" for the sale process but it needed to be "implemented urgently to avoid a long period of uncertainty for employees and customers".
He added: "What I hope is that you will have the offer document from Tata, overlay on top of that the help the British government can provide, then you have the makings of a successful deal." "Tata Steel Europe is in the process of finalising the appointment of advisers and will soon launch a process globally of seeking an investor for the UK operations," it added.
He suggested "more can be done" on the cost of electricity at the plant and on a pension scheme to attract potential investors - but he would not be drawn on the details.
Mr Javid said Tata had accepted that finalising any deal would take time.
He did not guarantee the plant's future, but said: "I will do everything I can to keep this plant open."
'Shovel-ready projects''Shovel-ready projects'
Shadow chancellor John McDonnell suggested the government could maintain a stake in the plant after a sale.Shadow chancellor John McDonnell suggested the government could maintain a stake in the plant after a sale.
"You might want to say there is a public stake there for the long term future to give us that security. It depends on the levels of investment," he said."You might want to say there is a public stake there for the long term future to give us that security. It depends on the levels of investment," he said.
He also called on the government to bring forward infrastructure projects and speed up "shovel-ready projects", to give the steel industry a boost and encourage buyers.He also called on the government to bring forward infrastructure projects and speed up "shovel-ready projects", to give the steel industry a boost and encourage buyers.
He warned that the cost of closing the plant could be up to "£1.5bn a year" in welfare payments to support workers who had lost their jobs and the impact on the local community. He warned the cost of closing the plant could be up to "£1.5bn a year" in welfare payments to support workers who had lost their jobs and the impact on the local community.
Mr McDonnell said he was "shocked" that Mr Javid knew about a "critical" Tata meeting held in Mumbai on Tuesday but was in Australia.
"I think we need someone else doing the job. We need someone who's more dynamic," he said,
'Steel dumping''Steel dumping'
It comes as the government said all public sector bodies would be required to think about the impact of using foreign steel for construction projects, in a bid to encourage buying British steel.It comes as the government said all public sector bodies would be required to think about the impact of using foreign steel for construction projects, in a bid to encourage buying British steel.
Ministers have faced criticism for failing to take more action to prevent the "dumping" of cheap Chinese steel - selling it cheaply at a loss - seen as one of the key reasons for the problems in the UK steel industry.Ministers have faced criticism for failing to take more action to prevent the "dumping" of cheap Chinese steel - selling it cheaply at a loss - seen as one of the key reasons for the problems in the UK steel industry.
The unions said it was "a small step in the right direction" but the measure should have been in place already, while Labour said ministers needed to do more if they were to ensure the industry's survival. The unions said the move was "a small step in the right direction" but the measure should have been in place already, while Labour said ministers needed to go further to ensure the industry's survival.
The government has played down the impact of new Chinese import tariffs of up to 46.3%. The Welsh government said a task force was already looking at supporting the steel industry through public sector contracts in devolved areas.
Elsewhere, the government has played down the impact of new Chinese import tariffs of up to 46.3%.
On Marr, Mr Javid said the UK had been "the leader" in pushing for action on tariffs but he said protectionism "is in no-one's interests".On Marr, Mr Javid said the UK had been "the leader" in pushing for action on tariffs but he said protectionism "is in no-one's interests".
Potential buyerPotential buyer
Steel tycoon Sanjeev Gupta, founder of commodities firm Liberty House, has emerged as one possible buyer for the Port Talbot steelworks.Steel tycoon Sanjeev Gupta, founder of commodities firm Liberty House, has emerged as one possible buyer for the Port Talbot steelworks.
He told The Sunday Telegraph he had already opened discussions with Tata Steel and was ready to hold talks with the government.He told The Sunday Telegraph he had already opened discussions with Tata Steel and was ready to hold talks with the government.
German steelmaker ThyssenKrupp has also been touted as another potential buyer, according to the Observer.German steelmaker ThyssenKrupp has also been touted as another potential buyer, according to the Observer.