Government support is critical to sale of Tata Steel says Hartlepool MP

Government support will be critical to securing the long-term future of Tata Steel's UK operations, Hartlepool MP Iain Wright has said.

Wednesday, 11th May 2016, 3:55 pm
Updated Wednesday, 11th May 2016, 5:06 pm
Tata Steel's site in Hartlepool

Addressing a Westminster Hall debate on the future of the UK steel industry called by Middlesbrough MP Tom Blenkinsop, Mr Wright said there were three factors he wanted to focus on - ‘time, confidence and government action.’

It was essential to allow time for the sale process to progress properly, he told MPs.

Hartlepool MP Iain Wright says there's nothing new in the Government's so-called Productivity Plan.

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“I don’t think anybody can be in any doubt that, given the scale and relative complexity of these operations, the sale of Tata’s steel business will not be a straightforward or quick process,” he said.

“Sales like this take years to plan and then execute.

“Although it is welcome that we have got seven bidders expressing an interest, due diligence and negotiations regarding things such as the pension scheme will need to take time.

“The role of government is critical.

Hartlepool MP Iain Wright says there's nothing new in the Government's so-called Productivity Plan.

“What can the Government do to safeguard the assets, capability and employment, during the potentially lengthy sales process?”

Action to increase confidence in the viability of the business was critical to keeping it going, with firms growing wary of doing business with a company they feared did not have a long-term future.

“Suppliers and customers have the perception that Tata’s steel business won’t be there in a couple of months’ time,” said Mr Wright.

“Suppliers in our part of the country have had their fingers burnt with the closure of SSI.

“They don’t want to be an unsecured creditor.

“Customers for Tata steel, particularly in sectors like energy infrastructure and oil and gas, have very long-term horizons in their requirements.

“They want to be certain that their orders will be there, otherwise they will look elsewhere.

“That is not in the long-term interest of the UK steel industry and the viability of Tata’s successors.”

There was action the government could take on issues such as business rates, energy costs and public sector procurement to support the business and help guarantee the long-term future of the industry.

“We should not be looking to the past - although we should celebrate our steel past,” said Mr Wright.

“We should be looking to the future as a massive, important part of a modern manufacturing industry.”