Business

Tata board meets to discuss UK steel

Port Talbot Image copyright Reuters

The board of Tata Steel is meeting in India to discuss the future of its UK steel operations.

It is expected to "pause" the sale of the main Port Talbot plant, but go ahead with the sale of its speciality business, which employs 2,000 people in Hartlepool, Rotherham and Stocksbridge.

Tata is thought to be in less of a hurry to sell because of rising steel prices and signs of government support.

Business Secretary Sajid Javid is in Mumbai for talks with the company.

During his trip, Mr Javid will also meet Indian government officials in Delhi to discuss how the trading relationship with India might work with the UK outside the European Union.

Government aid

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Media captionStephen Kinnock MP: 'Port Talbot steel staff put through hell'

Tata is expected to delay the sale of much of its UK business to consider the options and assess the impact of the UK's vote to leave the European Union.

One of the biggest obstacles to the sale of the UK business has been the legacy of the British Steel Pension fund, which Tata inherited when it bought the business in 2007. It has 130,000 members and a deficit of £700m.

The government has been trying to help here by consulting on drawing up special legislation to lower pension benefits for many of the 130,000 members of the old British Steel pension fund.

It has offered hundreds of millions of pounds worth of loans and the taking of a potential 25% stake in the business.

In the meantime, the price of steel has increased, reducing pressure on Tata to sell.

But a delay may only provide short-term relief for some of the workforce. One potential bidder fears the UK business will "wither on the vine" while Tata refocuses its investment on its plants within the EU.

German engineering conglomerate Thyssen Krupp and Tata have held talks on combining their continental European steel operations, as global overcapacity weighs on prices and profits.

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