Call for councils and the NHS to buy British steel in bid to save industry

Public sector bodies will have to consider the economic and social impact on the UK before purchasing from abroad

Public sector bodies will be encouraged to buy British steel (GETTY)

Councils and hospitals are to be encouraged by the government to buy British steel as a way of trying to save the industy.

The Government said all public sector organisations looking to buy steel as part of infrastructure projects will be required to look at both the social and economic impact on the UK before buying from abroad.

Guidelines introduced last year requiring central government bodies to take into account the “true value” of British steel will be extended across the public sector - including the NHS and local councils.

Sajid Javid, the Business Secretary, said: “By changing the procurement rules on these major infrastructure projects, we are backing the future of UK steel - opening up significant opportunities for UK suppliers and allowing them to compete more effectively with international companies.”

The push comes as a potential saviour for the Port Talbot steelworks has reportedly emerged, tycoon Sanjeev Gupta.

Mr Gupta has said he is ready to open talks with the Government about a rescue plan to save the plant, potentially saving thousands of jobs.

The founder of commodities firm Liberty House told the Sunday Telegraph he was in the process of opening discussions with Tata Steel, but said any deal would require a "proper partnership" with the Government to succeed.

Mr Gupta told the paper: "I haven't made a proposition that I want to buy all of [Tata Steel UK] because that's too big an undertaking to even put on the table at this stage.

"If the company, its people, its workers and the Government would be willing to consider my suggestions then I'm willing to engage in a discussion about what role we will play in that."

Meanwhile, the German conglomerate ThyssenKrupp was in talks with Tata about buying Port Talbot and its other UK sites around three months ago, the Observer reports.

The paper cited a source saying Tata could potentially rescue the deal if the UK government provided substantial financial support.

Tata Steel put its entire UK business up for sale to stem heavy losses, blamed on high manufacturing costs and competition with China.

In January, the company announced more than 1,000 job cuts in the UK, including 750 at Port Talbot, where it employs 4,000 staff and a further 3,000 contractors and temporary workers.

Business minister Anna Soubry said "the dream" solution would be to find a successful buyer, but Tata says it is losing £1m a day in its UK operations.