Government would co-invest to save Port Talbot

Let us pause for a moment to enjoy a ray of sunshine in an otherwise bleak time for the UK steel industry. The confirmation that Greybull capital will take on the plant at Scunthorpe and other smaller sites was welcomed by unions, workers and residents.

Union members still have to agree to a 3% pay cut and reduced pension benefits but the offer of £400 million in investment and 4,800 saved jobs in Scunthorpe, York and Teesside will surely secure that support.

The brand name British Steel will be revived. For some that will smack of confidence in the industry's future. For others it will conjure up memories of a sickly state-owned mess, haemorrhaging millions of pounds a week.

Unfortunately that leads rather neatly to the day's other announcement.

A formal process to find a buyer for the rest of the business was also launched today and the success of that will determine the future of 10,000 Tata UK workers including 4,000 at Port Talbot.

The key questions are: how long is the list of buyers and how long will that process take?

Tata Steel is losing millions a week and today's deal with Greybull took six months to conclude. Group Executive Director Koushik Chatterjee told me that the process would be given "due time" without specifying what that might be.

He also said workers should take comfort from the fact that the company had already waited two weeks before starting the process and that he saw potential buyers in "the tens".

There has already been tentative interest from the steel company Liberty House but the vision outlined by its chairman, Sanjeev Gupta, would require a radical and time-consuming restructuring of operations at Port Talbot along with significant government support.

That appeared to be on hand as the Business Secretary Sajid Javid said the government would be prepared to co-invest with a buyer on commercial terms to secure a sale of Tata's remaining assets. This would take the form of loans rather than a share in the company and civil servants described it as a last resort.

The government provided similar assistance to secure the Scunthorpe deal so doing this, more difficult, transaction may make state help a necessity rather than a luxury.