Prime Minister David Cameron said there was no guarantee a buyer could be found for Britain’s biggest steel producer after Tata Steel (TISC.NS) announced it was pulling out, and a state takeover was not the answer.
Cameron said he was doing all he could following the Indian company’s decision to sell its British operation, a move that has put 15,000 jobs at risk and exposed the government to accusations of failing to protect the industry from cheap Chinese imports.
Tata’s biggest plant in Port Talbot, south Wales, is losing around $1.4 million (£971,400) a day as a result of depressed steel prices and high costs.
“We’re going to work very hard with the company to do everything we can, but it is a difficult situation, there can be no guarantees of success because of the problems that the steel industry faces worldwide,” Cameron said after chairing an emergency meeting on the crisis on Thursday.
“We’re not ruling anything out, (but) I don’t believe nationalisation is the right answer.”
Cameron’s government has faced criticism over its response to Tata’s decision, with opposition MPs saying it was “asleep at the wheel” when the Indian group said it was pulling out after nearly a decade in Britain.
The prime minister and Sajid Javid, the Secretary of State for Business, were out of the country when Tata’s board met in Mumbai on Tuesday, leaving a junior colleague to respond.
The opposition Labour party and Britain’s media said the handling of the crisis had been “chaotic” after the government rowed back on an initial suggestion from a junior minister that it could nationalise the plants for a period.
“It’s absolutely extraordinary that they’ve been asleep at the wheel for this long,” Stephen Kinnock, the local MP in south Wales, told Sky News on Thursday.
“Why is it that the prime minister seems to be reacting to this as if he didn’t see it coming. They’re in total disarray.”
Steelmakers in Britain pay some of the highest energy costs and green taxes in the world, but the government maintains that the fundamental problem facing the industry is the collapse in the price of steel, caused by overcapacity in China.
Britain imported 826,000 tonnes of Chinese steel in 2015, up from 361,000 two years earlier, according to the International Steel Statistic bureau.
Cameron’s government, eager to cultivate closer ties with China, has opposed measures in Europe that could increase the tariffs paid on Chinese imports of steel, which are a fraction of the levels imposed by the United States.
Nonetheless, anti-EU campaigners said Brussels was part of the problem because rules on state aid limited the steps Britain could take to save the industry.
Cameron, who does not want to stoke anti-EU sentiment ahead of a referendum on Britain’s EU membership in June, said half of the country’s steel production went into European markets and the products could face European tariffs and taxes if Britain left.
He said ministers had been working on measures to help the industry, including encouraging major infrastructure projects to use British steel and cutting energy costs. The government’s intervention, he said, had helped avert an outright closure of the loss-making operations by Tata.
But steel workers in Port Talbot said politicians had hindered rather than helped the industry.
They pointed to the policies of Cameron’s right-leaning Conservative government as well as the European Union, which has been slow to penalise China for dumping steel.
“Do I blame the EU? To a certain extent, they’ve been very slow to act,” said Dave Bowyer, 59, a steelworker for 40 years at Port Talbot and a representative of the Unite union.
“But I think most of the blame has to lie with the UK government. Mr Cameron will long be remembered as the prime minister who sat on his hands as the steel industry rolled into decline.”
Business minister Javid said on Wednesday that there were buyers for the assets but government support might be needed, prompting speculation that the government could offer loans to any new buyer.