Tata decision sparks crisis

UK panic as 15 000 jobs threatened

BRITAIN’S once flourishing steel industry was in full crisis mode yesterday as Prime Minister David Cameron held talks to try to prevent up to 15 000 jobs being lost.

Emphasising the gravity of the situation, Business Secretary Sajid Javid cut short a visit to Australia to fly back to London, while Chancellor of the Exchequer (finance minister) George Osborne raised the issue with senior European ministers during talks in Paris.

The crisis was sparked by Indian giant Tata Steel saying it was putting its troubled British business up for sale.

Analysts say the sale throws into doubt the future of an industry that fuelled British industrialisation and helped build its empire.

Tata’s decision notably puts at risk Britain’s biggest steel plant at Port Talbot in the former industrial heartland of south Wales.

The facility is Wales’s biggest single employer.

While Cameron said he did not believe “nationalisation is the right answer” to protect the steel industry – hit by plunging prices triggered by cheap imports from China – he vowed to explore all options to help find a new buyer after Tata’s announcement on Wednesday.

“Those jobs are vital to workers’ families, vital to those communities and the government will do everything it can working with the company to try to secure the future of steel-making in Port Talbot and across our country,” Cameron said.

He was speaking after meeting cabinet ministers following his early return from holiday.

Port Talbot, a central part of the Welsh economy since 1901, is reportedly losing £1million (about R21-million) a day in the face of high energy costs and plunging prices caused by a chronic global oversupply of steel.

“Everyone either works in Tata or knows somebody who does,” Welsh opposition Labour MP Christina Rees said.

“For every job lost at Tata, four others will be affected in the local communities.”

Metal processing company Liberty House said it was looking at some of Tata’s British assets, but group president Sanjeev Gupta suggested it was more interested in processing plants rather than production facilities like Port Talbot. Analysts warned Tata would struggle to offload the production plants, of which there are three in total.

“They are not going to find a buyer, because they would ask for substantial help and if they [the government] were ready to give such help, then they would have rather helped Tata,” London’s City University specialist Mohan Sodhi said.

The government has been accused of turning a blind eye to Chinese dumping of steel on world markets to secure wider investment in Britain’s economy.

It rolled out the red carpet for China President Xi Jinping during a state visit last year while opposing EU plans to impose higher tariffs on Chinese steel.

“It is galling that the UK government . . . has continued to block these changes in the EU – leaving the steel industry on its knees,” UK Steel director Gareth Stace said.

“The government must support the lifting of the lesser duty rule – otherwise steel manufacturing will be lost in the UK.”

Compared with the US, EU import tariffs on Chinese steel imports are low, including a 16% duty on Chinese cold-rolled steel, against a 236% tariff in the US.