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Steel tycoon keen on talks as government reveals new plan

Sajid Javid 2(Updated 5 April): Steel tycoon Sanjeev Gupta, whose firm has acquired two Scottish steel plants, has said he is ready to open talks with the government on a plan to save the Port Talbot works in Wales.

The founder of commodities firm Liberty House said he was in discussion with the plant’s owner, Tata Steel.

Mr Gupta said on Tuesday that a deal could be done to buy Tata Steel’s British operations without mass redundancies but that he had not yet opened talks with the sellers.

The government has said it is working on possible a deal with potential buyers and Mr Gupta is due to meet Business secretary Sajid Javid (pictured). Mr Gupta said Tata’s Port Talbot plant could be restructured to make it more profitable and said staff could be retrained rather than fired.

Liberty House last week struck a deal with the Scottish government to keep the works at Clydebridge and Dalzell open.

His latest intervention comes after the UK Government offered a lifeline to thousands of British steelworkers at the weekend by ensuring UK plants are considered for all major public sector contracts.

The move strengthens the decision last October to put British plants “on a level playing field” with overseas firms.

Guidance introduced in October 2015 already means that all central government departments must consider the social and economic impact of the steel they source across all major projects, including on HS2, where over two millions of tonnes of steel will be needed. This means that steel contracts for this £55 billion project will “not go abroad if the most competitive bid is British”.

In a joint statement on the ongoing crisis facing the steel industry, the Cabinet Office and the Department for Business Innovation and Skills said that, for all relevant contracts, the whole public sector will now be required to adopt these reforms.

Public procurements that involve the supply of steel, will need to consider responsible sourcing, the training suppliers give to their workforce, carbon footprint, protecting the health and safety of staff and the social integration of disadvantaged workers.

“This will allow buyers across all major projects to take into account the true value of British steel, including its social impact. Contractors working for the public sector will also be required to advertise their requirements for steel so that UK firms can compete,” said the statement.

The government said it has already taken a number of steps to alter procurement rules to create a level playing field for the sector. In February 2015 it was the first country to put new EU procurement rules into action that emphasise the taking account of wider social and economic considerations, including when buying and sourcing steel.

The announcement comes after Business Secretary Sajid Javid visited Tata at Port Talbot this Friday to hear their concerns and reassure them that the Government was doing all it could to secure a long-term future for the plant, and for British steel.

Prime Minister David Cameron will also meet Carwyn Jones, First Minister of Wales, on Tuesday to update him on the Government’s ongoing discussions with Tata and work to support a sales process.

Critics are likely to say that the measures do not offer enough guarantees to underpin what some regard as a “strategic” industry whose future is threatened following the decision of Tata Steel to put its remaining UK plants up for sale.

Mr Javid said:I am determined to make sure we do all we can to secure a sustainable future for UK steel and find a viable solution that supports the workers and wider community.

“By changing the procurement rules on these major infrastructure projects we are backing the future of UK steel – opening up significant opportunities for UK suppliers and allowing them to compete more effectively with international companies.”

Government measures include:

  • Moving to exempt energy intensive industries – including steel – from energy costs, which will save industry £400 million by the end of the Parliament
  • Securing flexibility over EU emissions regulations
  • Continuing to tackle unfair trading practices at an EU and an International level.
  • Measures imposed in January on reinforcing steel bar imports are already starting to have an effect – imports in January 2016 were 99 per cent down on January 2015.
  • A new steel Council met for the first time on 2 March and will look at the longer term future of the sector and how the government can strengthen its capability and competitiveness.

Matt Hancock, Minister for the Cabinet Office and Paymaster General, said: “We are going further than ever before to support British steel. Taxpayers spend billions of pounds buying steel for public projects. Last year we changed the rules across all central government procurement to ensure buyers take into account the true value of British steel – including local impact and jobs.

“The industry is responding positively to this so I want to go further. Now we will apply this guidance across the public sector so that, from operating theatres to new buildings, public sector buyers will need to consider social and economic benefits, alongside value for money. When public bodies buy steel they must taking account of the true value of buying British.”

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