Whilst the UK’s MPs take part in an emergency three-hour debate in the House of Commons regarding the UK’s steel industry, we’ve finally had some good news come out of the ongoing steel crisis. Specifically, the Indian steel company Tata have successfully found a buyer for its long products business in Scunthorpe.
The buyer is Greybull Capital and the cost is just £1, but with significant debts and a worrying global outlook, one suspects that the Scunthorpe steelworks branch was not the bargain its asking price implies it to be. Nevertheless, the deal will keep open the steelworks in Scunthorpe, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York and a mill in northern France. In total, it’ll save around 4,400 jobs in the UK.
Tata Steel have been in talks with Greybull since the end of last year, however, notably this deal doesn’t include the Port Talbot steelworks or the rest of Tata’s UK business ventures, which employ around 15,000 staff. As part of the deal, the firm will be renamed British Steel, a brand which disappeared in 199 after the rebranding of Corus, which was later purchased by Tata.
Officials at the trade union Unite have said that the takeover proposals also include a one-year pay cut of 3% for all staff and changes to the pension scheme, though the union have recommended their members accept the deal. In a statement, Greybull said that they believe these changes will “make British Steel competitive”, adding that “The trade union agreement is subject to a ballot of union members which will take place over the next few weeks.”
Martin Foster, a steelworker himself and a member of Unite said that though the pay cut was a tough pill to swallow for the workers, the closure of the plant would have had a devastating effect on the community.
“For a couple of years now, the Long Products business has been in limbo. We knew we were living on borrowed time. That air of uncertainty has been there for so long that today’s announcement is just such a relief. We’ve got a good chance now of a successful future. Scunthorpe is built around the steelworks. If you took that employer away, there would be 3,500 unemployed steelworkers. The knock-on effect means the local economy would be decimated and the community as a whole”, he said.
Back in London, MPs continue to debate how best to act in order to help those communities facing harsh job losses. At least one buyer has expressed an interest in the Welsh manufacturing plant, and on Monday the Business Secretary Sajid Javid told the Commons that the government was working hard to find a buyer for Port Talbot, even floating the possibility of a partial public takeover, suggesting "the possibility of co-investing with a buyer on commercial terms".