Business

Tata deal: UK steel has 'bright' future, minister says

Tata Steel's Scunthorpe plant Image copyright Reuters
Image caption Tata Steel's Scunthorpe plant is one of those up for sale

The UK steel industry has a "bright" future, business minister Matthew Hancock has told MPs in Parliament, despite Tata Steel's announcement on Wednesday that it plans to sell its Long Products division to Klesch Group.

But he refused to guarantee there would be no job losses among the division's 6,000 UK employees.

The government "would make sure we support those affected", he said.

The Community union said it was not "reassured by the minister's comments."

Mr Hancock maintained that "employment in steel manufacturing has gone up in the last few years" and said the government would do all it could to "support steel manufacturing in the UK."

He added that annual UK steel production had risen from 10m to 12m tonnes under this government.

'Missed opportunity'

But Community, which represents the most steelworkers potentially affected by the deal, said: "We were particularly concerned with the minister's apparent willingness to mitigate job losses rather than try to prevent them."

In a BBC interview on Wednesday, Gary Klesch, the billionaire chairman of the Klesch Group, said "no-one should presume that we're going to cut employment".

But he later admitted that the sector was looking "toppy", meaning overstaffed.

The unions - Community, Unite and the GMB - are angry that they were not consulted before Tata announced it had signed a memorandum of understanding with Klesch.

"This was a missed opportunity to foster good industrial relations," the Community spokesman said.

Heavy industry

Tata's Long Products division manufactures transport rails and steel sections for use in construction, heavy industry and excavation, and accounts for about a third of Tata Steel's UK employees.

The division includes operations in Scunthorpe and Teesside in England, and Dalzell and Clydebridge in Scotland.

It also includes sites in Workington and York, as well as other operations in France and Germany.

But the company's sheet and speciality steel operations in South Wales and South Yorkshire are unaffected.

Demand for steel has only partially recovered in the wake of the financial crisis and in July Tata announced the loss of 400 jobs at Port Talbot in Wales.

Prime Minister David Cameron has agreed to meet MPs representing communities affected by the potential sale.

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