IAIN WRIGHT: Reassurances needed over future of British steel industry

This week's announcement that Liberty House is putting in a bid to buy Tata's steel operations in the UK is a welcome and positive step for the future viability of British steel manufacturing, including in Hartlepool.

Friday, 6th May 2016, 8:59 am
Tata Steel's site in Brenda Road, Hartlepool.

Last Thursday, the Business Select Committee, which I chair, held a session regarding the UK steel industry.

We had a wide variety of witnesses, including the boss of Tata Steel in the UK, as well as Sajid Javid, the Secretary of State for Business.

The Secretary of State admitted that he should have gone to Mumbai and the Tata board meeting in late March to press the case for ongoing commitment to the notion of a British steel industry.

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One of the things we on the committee wanted was assurance that Tata is a responsible seller and that any buyer is a responsible buyer, with the long-term interests of steel-making and manufacturing and steel jobs in Britain at heart.

The sale of the business will not be a quick one. Deals of this scale and complexity take months, if not years.

It is important that operations and jobs are maintained throughout this sale process, which will undoubtedly take some time.

I hope Tata will ensure that business continues throughout this time. If needed, the Government needs to step in to ensure the business operates throughout the sale.

This Tuesday, during questions in the House of Commons, I asked the Business Secretary a further point regarding ensuring that the Government plays a key role in helping to keep steel plants open.

When I have spoken with Tata management and workers in Hartlepool, they are understandably concerned that companies may no longer want to supply goods into Tata’s business, and that companies may look elsewhere for their steel products.

In business, confidence, perception and reputation are important considerations. If a business doesn’t think that it will get paid for an order, it won’t supply into that business.

Similarly, if a contractor doesn’t think that a business can fulfil a contract, largely because there’s a feeling the business won’t be around in a couple of months or years’ time, it will look elsewhere.

If that business is buying a product with a long time horizon of two or three years, consideration of business and product supply continuity becomes really important.

The news is positive, but it is the start of the process with still a long way to go.

The workers and management at the Hartlepool Tata steel facility are committed and professional and providing good products.

It is important that all concerned – Tata, a potential buyer and Government – provide the reassurance needed to ensure that this business and steel manufacturing remain in Britain and remain in Hartlepoool.