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PM: No guarantees on steel crisis

BBC News BBC News 31/03/2016
Sajid Javid: Mr Javid cut short his visit to Australia following Tata's decision © Getty Images Mr Javid cut short his visit to Australia following Tata's decision

David Cameron says the government is "doing everything it can" to save thousands of steel jobs - but warned there were "no guarantees of success".

Chart showing Chinese steel production © BBC Chart showing Chinese steel production

The PM said nationalisation was "not the right answer" after Tata Steel's decision to sell its UK business.

Man on beach by Port Talbot steel plant © Getty Images Man on beach by Port Talbot steel plant

Unions and opposition parties say the government is in "chaos", and want action to save the threatened plants.

Tata jobs statistics © BBC Tata jobs statistics

Business secretary Sajid Javid has been under pressure as he returns from an official trip to Australia.

Tata Steel's UK business - which directly employs 15,000 workers and supports thousands of others - includes plants in Port Talbot, Rotherham, Corby and Shotton.

The Port Talbot plant - which employs 4,100 people - is said to be losing £1m a day.

Tata Steel UK: What are the options?

What's going wrong with Britain's steel industry?

What next for Tata Steel workers?

Speaking after chairing an emergency meeting at Downing Street, Mr Cameron said the situation at Port Talbot was of "deep concern" and said the steel jobs were "vital" to workers' families and the communities.

Foreign Secretary Philip Hammond said a "more nuanced" solution was needed in recognition of the global oversupply of steel.

"We can't simply ignore that - just continuing to produce steel for which there is not adequate demand isn't the answer," he added.

'All the options look difficult'

Norman Smith, BBC assistant political editor

For all the bold talk, privately ministers are deeply apprehensive about saving the steel industry.

Why? Well, all the options look difficult.

Finding a buyer would be the preferred solution. But with Port Talbot losing £1m a day who would want to take it over?

A worker-management buyout is possible but their turnaround plan would require £300m of investment.

Port Talbot could be "mothballed" to secure more time to find a buyer but that would still mean laying off all but a handful of employees.

And taxpayer support - short of nationalisation - would almost certainly fall foul of EU state aid rules.

But there is perhaps an even more pressing reason ministers are sounding increasingly cautious.

They simply don't know what Tata is up to.

Despite repeated requests ministers have been unable to secure a promise that the steel plants will not be closed within a few weeks.

Ministers insist they will need months to put a rescue plan in place.

Privately some in government fear the reason Tata won't say is because they are not interested in finding a buyer.

Why, they ask, would Tata want to sell their steel plants to a competitor?

In other words, Tata may already have determined the fate of the British steel industry and those who work in it - whatever option the government eventually decides to pursue.

The PM defended the government's handling of the crisis, saying ministers had been working "for months" to save the industry and said the government had taken action on energy costs.

Mr Javid, who cut short a business visit to Australia to return to the UK, has come in for particular criticism for his absence during the crisis - and for taking his daughter with him on the trip.

Labour MP Anna Turley said it gave the impression of the trip "being a jolly", while Stephen Kinnock, whose Aberavon constituency is home to the Port Talbot plant, said Mr Javid should have travelled to Mumbai for Tata's crunch board meeting on Tuesday "but instead he chose to jet off to Australia".

A source from the Department for Business, Innovation and Skills said Mr Javid's daughter "was there to spend time with her father" and "he paid for everything" - and dismissed Mr Kinnock's calls for him to consider his position as "ridiculous".

Unite general secretary Len McCluskey said the UK was in the grip of an "industrial crisis of enormous proportions".

He called for the creation of a steel taskforce and for the government to intervene to save the steel industry like it did the banks during the financial crisis, saying EU state aid rules had not prevented Italy or France from "protecting" their steel industries.

Port Talbot closure 'could hit 15,000'

Analysis: Warning over defence impact

Tata Steel workers in 'complete shock'

Shadow chancellor John McDonnell said the government "should nationalise to stabilise" saying this would involve covering the plant's costs in the short term to help a new buyer turn it around.

Mr McDonnell said the government should "bring forward the support that was expected in this budget and didn't happen" about reducing business rates, which he said were "five to seven times" higher in the UK than Europe.

The view from the ground, by BBC correspondent Tomos Morgan

After days of uncertainty, there are still very few answers for the workers of Port Talbot.

They want to know how long they've got. They want to know if they can pay the mortgage, plan for the future and depend on a pension. But at the moment, nobody can tell them.

There is anger here over how the UK government has handled the situation.

While a delegation of local union reps were able to find a way to Mumbai to lobby Tata, there were no government ministers to be seen there. Likewise, no UK minister has made their way to Port Talbot yet.

Even if, as David Cameron says, there has been work behind the scenes for months, many workers here would like evidence of something more solid.

One worker told me he thinks the government has walked into this "with its eyes wide shut". There have been clouds gathering over this plant for months - but yet when the storm hit there was no protection on offer.

There is still hope here that a buyer can be found - in Port Talbot more than anywhere, they believe fervently in the product and prospect of demand for steel rising in years ahead.

But as the deadline to find a buyer seems to be in weeks rather than years, there is a grudging acceptance that time is against them.

Steel production makes up 1% of Britain's manufacturing output and 0.1% of the country's economic output.

It is understood the government is looking at offering loan guarantees to potential buyers and much tighter rules on procurement to ensure major British projects are obliged to buy British steel.

But it has also been accused of opposing EU moves to impose higher tariffs on Chinese steel entering Europe.

China "dumping" cheap steel on overseas markets is being partly blamed for the problems facing the UK steel industry.

Mr Kinnock called for an immediate injection of government money to ensure the Port Talbot plant keeps going while its future lies in the balance.

A number of Eurosceptic Conservative MPs have said the government should not rule out subsidising the industry. This would be in contravention of EU rules restricting so-called state aid.

But venture capitalist Jon Moulton, who tried to rescue MG Cars when it was put up for sale by BMW, told Today saving the plants was "probably mission impossible" as a "very, very large amount of money would need to go in to come up with any chance of a way forward".

There are also warnings that the end of steel production in Port Talbot would severely undermine Britain's defence capability and its status as a leading military power.

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