State could take 25% stake in huge bailout to save our steel jobs
TAXPAYERS could take a 25 per cent stake in Tata Steel’s UK operations as part of a package worth hundreds of millions of pounds to help secure a sale, it was announced yesterday.
Taxpayers could take a 25 per cent stake in Tata Steel’s UK operations
The Government, which has insisted nationalisation is not the answer to the industry’s problems, denied it would be “part nationalisation” because the state would not be involved in running the company.
Unions and Labour welcomed the “long overdue” recognition that support was needed to save the plants and thousands of jobs.
The offer follows Indian-owned Tata’s shock decision to ditch its loss-making British operations, threatening about 15,000 jobs plus 25,000 in the supply chain.
A fall in demand, together with global over-production in which China is accused of mass “dumping” of cut-price steel on Europe, has seen prices plunge.
The Indian-owned comapny decided to ditch it's British operations threatening huge job losses
We will be investing on a commercial basis. We would not see this as nationalisation
Tata Steel is said to be losing about £1million a day on its operations at Port Talbot, Rotherham, Corby, Shotton and Teesside.
Its Scunthorpe plant has already been sold to investment firm Greybull Capital for a nominal £1.
Current employees are uncertain about their future and have protested to 'Save Our Steel'
Asked if the Government was sure that propping up an ailing industry would not break European Union state aid rules, David Cameron’s official spokeswoman stressed: “We will be investing on a commercial basis. We would not see this as nationalisation.”
At least two potential buyers have expressed interest in buying Tata’s assets, including a management-worker buyout backed by the chief of Tata’s Port Talbot factory in Wales.
Tata's closure threatens losses of about 15,000 jobs plus 25,000 in the supply chain
The Government says it could take a stake of up to 25 per cent if necessary to aid a sale, although debt financing is the main focus.
However, Simon Walker, director general of the Institute of Directors, warned the investment was “risky”, adding: “There is no reason to think that the long-term issues affecting the steel industry will suddenly disappear.”