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Version 5 Version 6
Steel crisis: business secretary admits he should have flown to Mumbai - live Steel crisis: business secretary admits he should have flown to Mumbai - live
(35 minutes later)
11.49am BST
11:49
Q: Unions have told us they would favour scrapping the lesser duty rule, in favour of a new solution just for the steel sector. Is this under consideration?
Javid says he still supports the lesser duty rule [this is the rule that prevents higher tariffs being imposed on Chinese steel]
The lesser duty rule works, Javid insists. Its intention is to stop dumping or provide compensation.
If we scrapped it, we would have spent an extra £500m on the solar industry for example [because the lesser duty rule covers a range of industries, not just steel]
Q: Do you believe Tata are a responsible seller, given they didn’t fully brief you about their plans for a quick sale?
Yes, Javid replies, based on the conversations I’d had with them. They have approached this issue responsibly.
Q: Is there timeline appropriate? They are talking about finding a buyer within weeks, but this will take months.
Tata are losing money every day, so they can’t have unlimited time. But it is important that they do everything possible to find a responsible buyer.
I have every reason to believe that when they promise to be responsible, that will be reflected in the timeline, Javid hints.
11.41am BST
11:41
MPs are questioning whether Sajid Javid is really doing enough to help the steel industry.
I will do everything in my power to help, but I cannot influence the price of steel, says Javid
Q: But what about tariffs? Should the EU move faster to identify problems?
Speed of action is an issue, Javid replies -- that’s why I called a meeting last year to look at the issue of dumping. Europe must move faster.
Reminder: Javid actually blocked a measure to impose higher tariffs on Chinese steel imports....
Javid wants speed of action in trade defence and tariffs?! Why was he blocking tariff increases at an EU council level then?
But the business secretary is adamant that tariffs can work. Take wire rod imports - they have gone from 67,000 tonnes to zero.
11.35am BST
11:35
Javid: Pension scheme isn't a major risk to taxpayers
Q: What is your working assumption about the pension liabilities, if there is a successful sale?
Javid says commercial sensitivities prevent him saying too much.
But several potential buyers have said they wouldn’t be interested if they had to take on Tata’s pension liabilities.
It’s a big scheme, with 130,000 members, and it’s relatively expensive.
Q: So might the public purse be left ‘holding the baby’?
No, Javid replies. Discussions are already underway to finding a solution.
Q: You really don’t think it’s a risk?
It’s not a major risk to the public purse, no, Javid insists.
Most positive comments by Javid, is his view re: BSPS and pensions issue not being insurmountable. That is positive.
11.31am BST
11:31
Q: What top three lessons can we learn from the Scottish government’s deal to save two Tata steel plants?
Javid says it’s hard to learn lessons - given the Scottish plans were steel mills (recycling steel) rather than a blast furnace (which makes new metal). And it only involved 300 jobs.
Q: But surely we can learn lessons from Scotland’s speed of response? (they brokered a deal which say Tata sell the site to Liberty House).
Javid doesn’t accept that Westminster have been acting too slowly. But we must help workers to keep their skills ‘fresh’, or reskill if needed.
11.26am BST
11:26
The committee aren’t impressed with Javid’s claims that Britain is getting better at using home-smelted steel for big government contracts.
They point out that the Minister for Defence Procurement has admitted he doesn’t have the full records of where it sourced its steel from (details).
Javid reiterates that the situation is improving. But we can’t always assume that a UK steelmaker will make the most competitive bid for a project....
Updated
at 11.26am BST
11.20am BST
11:20
Compared to his BIS predecessors Lord Mandelson and Vince Cable, Javid comes across as notably detached from industry and its views
11.19am BST
11:19
Q: Why hasn’t the government moved faster to change procurement rules to use more UK steel in infrastructure projects?
Javid says the government needed to ensure the changes were legally watertight. Changes are being made, and they will make a difference.
But he accepts that they have not made an impact yet.
11.18am BST
11:18
Javid has been accused of misleading the committee over SSI Redcar, by Labour MP Tom Blenkinsop, who represents Middlesbrough South and East Cleveland.
Javid saying there wasn't a single buyer for SSI last autumn, is just a flat out lie.
Javid has just come out with the £80m figure again which just another LIE!
Updated
at 11.22am BST
11.17am BST
11:17
Redcar steel closure was an 'absolute disgrace'
The committee asks why Javid allowed the steel works at Redcar to close last autumn.
Q: Why did you rejecting an offer from one company to keep the coke ovens open, and “shut the door rapidly” on negotiations?
Javid insists that the Redcar plant didn’t have a viable future, and no serious offers. So given the uncertainty facing workers, he wanted to quickly arrange a package to help them retrain and find new jobs.
Committee chairman Iain Wright isn’t impressed, telling the secretary of state that he should have allowed Redcar to be mothballed.
Instead, Javid allowed the “absolute tragedy” of a hard closure.
We’ve lost those skills from the steel industry for ever.....
And an absolute disgrace that it was allowed to happened on your watch.
11.08am BST11.08am BST
11:0811:08
Q: Anna Soubry says she heard about Tata’s plans via Twitter. You were on the other side of the world - how can you claim you were in control?Q: Anna Soubry says she heard about Tata’s plans via Twitter. You were on the other side of the world - how can you claim you were in control?
Javid reiterates that commercial sensitivity stopped the government from saying more.Javid reiterates that commercial sensitivity stopped the government from saying more.
MPs on BIS committee say Sajid Javid has given impression during steel crisis that he is not in control of situation, he is denying thisMPs on BIS committee say Sajid Javid has given impression during steel crisis that he is not in control of situation, he is denying this
11.06am BST11.06am BST
11:0611:06
Q: The government has given some very mixed messages - first saying that nationalisation was off the table, but now offering to do whatever it takes.Q: The government has given some very mixed messages - first saying that nationalisation was off the table, but now offering to do whatever it takes.
Do you accept you have been on the back foot throughout this crisis?Do you accept you have been on the back foot throughout this crisis?
Javid denies this, claiming the government’s message has been consistent despite the pressure not to release commercially sensitive decisions.Javid denies this, claiming the government’s message has been consistent despite the pressure not to release commercially sensitive decisions.
He points out that minister Anna Soubry didn’t rule out nationalisation, but then adds:He points out that minister Anna Soubry didn’t rule out nationalisation, but then adds:
Rarely is nationalisation a solution - the best companies are in private hands.Rarely is nationalisation a solution - the best companies are in private hands.
Q: You’re doing it again - ‘rarely’ is not a decisive word. It doesn’t suggest a clear-cut plan to what’s been unfolding.Q: You’re doing it again - ‘rarely’ is not a decisive word. It doesn’t suggest a clear-cut plan to what’s been unfolding.
Javid repeats that he is under control. It has taken time for Tata to release info about its own plans, and the government has been reacting and adding its own detail.Javid repeats that he is under control. It has taken time for Tata to release info about its own plans, and the government has been reacting and adding its own detail.
11.02am BST11.02am BST
11:0211:02
Javid’s decision to fly to Australia last month, not Mumbai, is particularly sensitive as he also took his teenage daughter along.Javid’s decision to fly to Australia last month, not Mumbai, is particularly sensitive as he also took his teenage daughter along.
Javid says ministers 'have to be ready to turn back' when they are on trade missions (even to Australia with daughter in tow)Javid says ministers 'have to be ready to turn back' when they are on trade missions (even to Australia with daughter in tow)
10.58am BST
10:58
Javid is asked about his dislike of "industrial strategy". He replies that manufacturing declined from 18% to 10% of GDP under Labour.
10.58am BST
10:58
Q: Businesses complain about the lack of a level playing field, so what can be done to help firms compete with German firms?
Javid says that more needs to be done on energy costs -- an issue which Tata UK raised earlier in this session.
10.55am BST
10:55
Some early reaction to Javid’s testimony:
Sajid Javid seems to be getting into a tangle. Admits he knew Tata was considering closing Port Talbot, but not clear why not in Mumbai
Javid admits that "with benefit of hindsight" he would have gone to Mumbai for Tata board meeting last month
10.54am BST
10:54
Javid: With hindsight, I should have gone to Mumbai
Q: If you could turn the clock back a month, would you have attended that meeting in Mumbai rather than going to Australia?
Of course, says Sajid Jabid. With the benefit of hindsight, knowing what they would say and how it would have been reported.
But the reality is that he must travel for his business.
10.52am BST
10:52
Javid: I wasn't blindsided by Tata
Q: Isn’t the truth that you were blindsided by Tata, which is why you set off to Australia leaving no-one in London who could deal with this crisis?
No, Javid insists. Tata is a large global business, so people in every management layer don’t always have all the information about what’s happening.
He denies that a better early warning system would have helped.
Q: It looked like you were on the back foot after the Mumbai meeting, in panic mode and scrambling around to get the initiative.
Javid denied that he should have flown to Mumbai for the board meeting - that would have been far too late. It might have made a great photo opportunity, but it wouldn’t have helped.
Instead, our work in the weeks before the meeting were crucial. And the government couldn’t have shared some information because it was legally sensitive - announcing it could have made the situation worse.
10.46am BST
10:46
Q: So when the Tata board met in Mumbai in late March, were you convinced that they had dropped the idea of complete closure and were looking for a buyer?
Yes, says Javid.
Q: So did Tata mislead you?
No, says Javid. But he was surprised by the speed at which Tata was looking to sell up.
Q: Frankly, secretary of state, I don’t understand why you weren’t in Mumbai, says Iain Wright.
Javid repeats that he had been shocked to learn in February that Port Talbot could close, but he had then begun looking for a buyer. So he was startled by newspaper reports that the board decided to settle the issue ‘within weeks’
That is not what we agreed with Tata, and that’s not what they are not planning to do.
Javid says he went on his (infamous) trade mission to Australia knowing that he could return if needed - as he did.
10.42am BST
10:42
Javid: We learned in February
Sajid Javid has arrived, flanked by two senior officials.
Iain Wright, BIS committee chair, goes first:
Q: You told the House on 11 April that Tata were seriously considering closing Port Talbot.
The CEO of Tata UK has questioned that this morning [earlier] - so who actually told you, and when?
Javid says that Tata India (so not the UK branch) told him in mid-February that they were considering shutting Port Talbot and focusing on the rest of their UK operations.
We then worked intensively to try to persuade Tata to keep funding their operations, and embark on a turnaround plan.
But it became clear that the board might not accept that, so we began considering whether an alternative owner could be found instead - and considering what we could do to assist
Q: What did you do between mid-February and the Mumbai board meeting at the end of March when the decision to sell up was taken?
Javid says he asked the company if there was anything we could do that would prevent them from closing Port Talbot. And the short answer was no.
There were things they wanted us to do for the rest of the business - but I kept my focus on saving Port Talbot. So we began considering whether another buyer could be found.
Tata is a global producer, not just a UK one, so there may be another company who could take their operations on.
10.34am BST
10:34
Reminder, you can watch today’s hearing here.
10.32am BST
10:32
We should hear from the business secretary in a moment....
Sajid Javid up next at @CommonsBIS let's hope he's asked by @IainWrightMP et al whether his decision to fly to Australia was a mistake...
10.30am BST
10:30
What we learned from Tata boss
That’s the end of the session with Bimlendra Jha, so what did MPs learn from the Tata UK boss?
1) The pension issue is absolutely crucial.
No potential buyer is going to buy Port Talbot, and Tata’s other steel plants, without some solution
Tata’s pension fund has £15bn of liabilities, and an estimated deficit of under £500m.
The collapse of high street chain BHS showed that pension black holes get bigger when a firm goes under, as potential losses are “crystallised”.
Jha insisted that there are ways of fixing this problem, without using public money; hopefully Sajid Javid can give more details shortly.
2) Tata insists it kept the government in the loop.
The “writing was on the wall all the time”, Jha insists, when quizzed about exactly when it warned the government that the situation was unsustainable. That raises fresh questions about Javid’s decision to fly to Australia as the crisis escalated.
3) Can Port Talbot be saved, in current climate?
Jha says there are “serious question marks” over the South Wales plant. And he pinned the blame firmly on high costs, such as energy and business rates, that are making it unprofitable.
We would not be selling up if we could make money, he insists.
4) This crisis could still end very badly.
As he urged the government to address the pension issue, Jha warned that the stakes are terribly high.
It’s not just the four thousand or so workers at Port Talbot, but the “economic and social consequences of that kind of disaster” if steel fails.