Business Minister Matthew Hancock was called to answer an urgent question in Parliament over the proposed Tata Steel sell-off

Steel has 'sustainable future' despite proposed Tata sale

Steel has a "sustainable long term future" in the UK Business Minister Matthew Hancock said at a Commons hearing over the sale of Tata Steel’s Long Products division.

The company announced yesterday it wanted to sell off the division, which employs thousands of people at several sites in the UK – including at the Scunthorpe steelworks, mills in Teesside, Dalzell and Clydebridge in Scotland, an engineering workshop in Workington and a rail consultancy in York.

The steel giant said it had signed a Memorandum of Understanding with the Klesch Group, an industrial company which operates across Europe.

Answering an urgent question in the Commons, Hancock said: "I can understand announcement of this sort brings uncertainty and we will do all we reasonably can to support the companies to ensure a competitive future for the business.

"MPs will know that over the last four years, we have seen a restart of production in Redcar, we have introduced support for energy intensive industries and steel production in the UK is higher now than it was in 2010.

"The steel industry has an important role to play in generating future economic growth, it underpins a number of key advanced manufacturing sectors and sustains the livelihoods of many local communities.

"Decisions on company ownership are of course commercial matters for the companies involved - nevertheless, we are working with the metals sector to develop further our metals industrial strategy and from this side of the House, we believe there is a sustainable long term future for the steel industry in the UK."

Hancock added: "After decades of decline, steel production in the UK is rising and we will not rest in our determination to ensure manufacturing including steel has a strong future in our country."

Shadow minister Iain Wright secured the urgent question from Speaker John Bercow and said he had a series of concerns about the situation.

Addressing the minister, he said: "Steel is a vital foundation for much of the UK's manufacturing supply chain. The UK is the leading global player in industrial sectors such as aerospace, automotives, construction and energy.

"And the production of steel in the UK underpins ... much of that competitiveness. Britain's largest steel manufacturer is preparing to sell half of its capacity so what contingencies have been put in place to maintain and enhance the skills and manufacturing capability in this industry and ensure they are not lost to the UK?

"Linked with that first point, what commitments has the Government maintained from the prospective new owner in respect of the maintenance of existing sites, industrial capability, the safeguarding of jobs and any additional investment? How binding are any of those commitments?"

Wright highlighted union concerns about a lack of consultation or communications with workers.
He urged co-ordination with the Scottish Government to ensure a good response for sites on both sides of the border.

Wright added: "It's not good enough for the Government to say 'Let's wait and see, this is a purely commercial consideration' - it needs to show it is prepared to act for the long-term good of the steel industry and UK manufacturing."

Mr Hancock replied: "Of course steel underpins, quite literally, a huge amount of UK activity – both manufacturing and construction. We have taken strides to strengthen the skills provision for manufacturing, not least through strengthening and expanding the apprenticeship programme but also more broadly.

"We will ensure, as we do everywhere in the country, that, should there be changes to employment, we will be there to make sure people have the opportunity to re-skill; however, we don't have that at the moment. That situation has not arisen because this is a sale.

"We are consulting on strengthening the takeover code, as you know, in order to ensure assurances given are binding. You talk about consultation with the workforce and the unions but of course this was announced yesterday and hence consultations and communications start then."

The minister added that the proposed purchaser restarted a long products plant in Italy last year. He pledged the Government would be in "constant communication" with both sides of the proposed deal. 

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