The government could step in to save some of the 17,000 steelworker jobs at Tata Steel’s UK plants after the Indian conglomerate put the business up for sale last night.
Business minister Anna Soubry said the government would not rule out temporarily stepping in to take ownership until a buyer can be found.
“That is an option,” she told Radio 4’s Today programme. “We want enough time to be able to secure a buyer and that is a matter that will take months.”
Shadow chancellor John McDonnell today told Construction News he believed the government must intervene and should consider taking ownership of the part of the company that is up for sale.
“I have asked the government to intervene, to look at a full range of options that includes state intervention and public ownership, if only for a limited period of time,” he said.
He added that he had been arguing for the last year that the government should introduce tariffs to prevent the dumping of Chinese steel on the UK market.
Mr McDonnell also praised the bail-out by the Italian government of a struggling steel plant in Taranto last year, saying it had “put it back on its feet again”.
However, the European Commission has since opened an investigation into whether government support for the steel producer Ilva was in line with EU state aid rules.
When pressed on whether the government might buy Tata’s UK operations, including the Port Talbot steelworks, which employs 4,000 people, Ms Soubry said: “That is an option and we have looked at all options. I don’t know whether ‘own’ would be the right word but we will look at all options.
“We’d want to establish a good period [in which we can] sell it on. That is our priority. But we are being realistic about the situation the steelworks is in at Port Talbot.”
Also speaking to Today, Welsh first minister Carwyn Jones ruled out the possibility of the Welsh Government buying Tata’s operations in the country.
“We don’t have the resource to do it ourselves,” Mr Jones said. “We’re talking about hundreds of millions of pounds that don’t exist in our budget. It would have to be the UK government that considers this.”
Tata has been cutting staff numbers at its UK plants over the past year in response to the influx of cheap imported steel, particularly from China, into the domestic market.
In January, it revealed more than 1,000 job cuts, primarily at Port Talbot, while last October saw 1,200 jobs axed at its Scunthorpe and Lanarkshire mills.
In announcing the decision to sell the UK business, Tata said: “Given the severity of the funding requirement in the foreseeable future, the Tata Steel Europe Board will be advised to evaluate and implement the most feasible option in a time-bound manner.”
In a joint statement, the UK and Welsh governments said: “Both the Welsh and UK governments are working tirelessly to look at all viable options to keep a strong British steel industry at the heart of our manufacturing base.”