Green Britain May Re-Nationalise Uncompetitive Steel Industry

  • Date: 11/04/16
  • Jim Pickard and Michael Pooler, Financial Times

Sajid Javid, the business secretary, opened up the possibility of a part-nationalisation of Port Talbot steelworks after offering to co-invest with a buyer “on commercial terms”.

Mr Javid has previously ruled out full nationalisation of the business but his comments signal the potential for the government to take a stake in the industry, which has been plunged into crisis due to a slump in price driven by a global supply glut.

Such a move would be a historic step for a Tory government; there is almost no precedent since the 1970s.

Pressed on what he meant by “co-invest”, Mr Javid told MPs that “there is no option that is off the table”. Later, a government aide said that this represented a “last resort” for ministers.

Mr Javid is aware that if the government took an equity stake in the business, it would almost certainly fall foul of European state aid rules.

It came on the same day that a separate £400m rescue deal was announced for Tata’s Scunthorpe steelworks. Investment firm Greybull Capital is talking with the government about contributing towards £200m of commercial loans, with a deal expected to be completed within two months.

Yet in a measure of the mammoth task that any buyer will face to turn round the rump of Tata Steel’s UK activities, its group executive director, Koushik Chatterjee, confirmed the remaining business was losing about £1m a day.

After facing censure for his initial response to the steel crisis, Mr Javid told the House of Commons on Monday that Port Talbot was only open because he had persuaded the senior management of Tata Steel not to close it down immediately several weeks ago.

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