Cameron Says Nationalization Not the Answer for Tata Steel Plant

  • Ministers held crisis meeting on Thursday about Welsh plant
  • About 6,500 jobs threatened in Wales with votes looming

Tata's Plant Sale Reflects U.K.’s Fading Steel Industry

Prime Minister David Cameron said he’s opposed to taking Tata Steel Ltd.’s Port Talbot steel plant into state ownership after the company announced a plan to sell its U.K. business, casting the future of the industry in Britain into doubt.

“I don’t believe nationalization is the right answer,” Cameron said in televised comments from his Downing Street office in London after presiding over a meeting of ministers on Thursday to discuss the crisis. “What we want to do is secure a long-term future for Port Talbot and for other steelmaking plants in the United Kingdom.”

The government is trying to address a crisis that’s endangering 6,500 jobs at the plant in South Wales at a politically sensitive time, with Welsh Assembly elections only a month away and an in-out referendum on the U.K.’s European Union membership on June 23. Campaigners for a “Leave” vote, or “Brexit,” said the bloc’s control of trade policy has left Britain unable to protect its steel industry.

Tata’s decision late Tuesday to sell the plant followed several quarters of losses and 2 billion pounds ($2.8 billion) of writedowns that left the division with an asset value of almost zero. With steel prices at their lowest in a decade, higher U.K. wages and energy costs left the business exposed in the face of cheap Chinese imports.

“The U.K. can’t take robust action against steel dumping on its own initiative, like the Americans, because the EU controls trade policy,” Jack Montgomery, a spokesman for Leave.EU, one of the main groups campaigning for a “Brexit,” said in a statement.

The EU imposed tariffs as high as 26.2 percent last month on some steel products from China and Russia for allegedly selling the products at below cost price in the EU, a practice known as dumping. By comparison, the U.S. announced tariffs of 266 percent on some Chinese steel imports this month.

The EU is not to blame for the crisis, according to Len McCluskey, leader of Unite, Britain’s biggest labor union, which represents some steelworkers and backs a vote to remain in the bloc.

German Reality

“The reality is it’s not a problem for Germany or France; let’s not make it a problem for ourselves,” he told the BBC, when asked about the bloc’s role. “In the rest of Europe they protect their steel industry.”

Business Secretary Sajid Javid cut short a trip to Australia to address the crisis sparked by Tata’s decision.

“The government will do everything it can, working with the company, to try and secure the future of steelmaking in Port Talbot and across our country,” Cameron said. “I’ve had teams of ministers working for months to help this industry.”

Opposition Labour Party leader Jeremy Corbyn said on Wednesday that the government should consider renationalizing the Tata plant, a view backed by former Business Secretary Vince Cable, who served in Cameron’s coalition administration before last year’s general election.

“It is possible that a temporary period of public ownership may be necessary as part of the transition, and ideological dogma must not get in the way,” Cable wrote in the Financial Times on Thursday. “Whether or not a buyer can be found, the crisis is going to prove expensive for the Treasury.”

Cameron said ministers had feared an outright closure of the plant, and will now do “everything we can” to encourage buyers to come forward. “There’s no guarantee of success,” he said.

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