Sajid Javid blasted by the Business, Innovation and Skills Select Committee for “scrambling around” in the wake of the steel crisis
Business secretary Sajid Javid has been blasted for "scrambling around" in the wake of Tata's announcement that it would sell its UK plants at the end of March.
Speaking in front of the Business, Innovation and Skills (BIS) Select Committee this morning, the business secretary admitted he was told around mid-February that the company was seriously considering closing its Port Talbot steelmaking plant and said he had spent the next several weeks starting to look for potential buyers.
He previously told parliament he had been warned several weeks before the announcement that Tata was considering an immediate closure.
Javid added that, "in hindsight", he should have attended Tata Steel's crucial board meeting in Mumbai on 29 March, where the company decided to sell its UK-based assets.
Javid was widely criticised for flying to Australia when Tata's board met late last month. "Of course I would have", Javid replied when asked if, retrospectively, he would attend the meeting if he had known then how pivotal it would be.
The BIS committee also blasted him for seeming to "scramble around" in the wake of Tata's announcement, with the committee saying it was the "definition of a government on the backfoot".
Javid denied he had been blindsided by the announcement, saying that he was only surprised by the speed of Tata's expected sale.
Read more: Steel crisis: Global glut sees sun set on UK industry
25 per cent stake
Javid also reiterated previous comments that the government is committed to taking a 25 per cent stake in Tata UK if it would assist securing a buyer.
"I'm not going to rule anything out. Clearly the focus is to find a commercial buyer as quickly as possible," Javid said, in reply to a question asking if the government would consider stumping up a bridging loan.
Pensions liability
Tata UK's chief executive, Bimlendra Jha, and Marc Meyohas of Greybull Capital, were also quizzed by the BIS panel this morning.
Speaking to the committee on the issue of pensions, which have been back in the headlines this week with BHS, Jha said that Tata Steel UK would not be willing to take on the company's pensions liabilities.
The pensions fund is a crucial hurdle to the sale of Tata's assets, with around 130,000 members and a current deficit of £485m.
Several potential buyers have already said they wouldn't take them on, however Javid said he did not think the scheme would pose a "major risk" to taxpayers.
Electricity prices
Although much of the discussion around saving the UK steel sector has focused on external obstacles to maintaining a national industry, namely the global steel glut in large part driven by China, Tata's representative also said that UK energy prices were driving the sector out of profitability.
Jha claimed Tata's UK operations would not be loss-making if the UK had lower energy costs, in line with other European countries such as Germany, and insisted Tata would not be selling the business if it wasn't loss-making. Javid later agreed that more needed to be done to tackle high energy costs for UK businesses.