The UK government has confirmed that it is willing to take a 25 per cent stake in the troubled Tata Steel plant in Port Talbot, Wales, as part of a rescue package.
The global collapse in steel prices caused by Chinese dumping lead Tata Steel to sell its UK business, threatening thousands of jobs.
The rescue deal was announced by Sajid Javid, business secretary in the UK's Conservative government. The government stake is intended as a sweetener to make it easier to find a buyer for the business.
Javid – who had previously ruled out nationalization - is an economic libertarian who has been criticized for allowing blind faith in the free market to obstruct attempts to rescue the industry. The Conservative government has been slow to respond to the crisis, and also vetoed an EU plan to increase tariffs on Chinese steel.
The move was welcomed by IndustriALL-affiliated unions with members in the sector, who have successfully mobilized support for the industry by reminding people of the size of the bank bailouts, and of the importance of steel to the supply chain.
Unions are arguing for a long term, sustainable industrial policy that ties steel production to procurement and infrastructure development, and tackles dumping.
Commenting on the deal, Unite assistant general secretary Tony Burke said:
“Today’s announcement is only part of the solution. The task now is to secure a buyer who is committed to purchasing the whole of Tata Steel UK and securing the long term future of steelmaking in the UK. Our members will also need strong commitments during the sales process about their pensions and assurances that none of them will suffer an adverse impact.
“The UK government still has a lot to do in ensuring that steelmaking can thrive.“
Roy Rickhuss, general secretary of Community union, said:
“We welcome the willingness of government to support debt financing and that they remain open to taking a 25% share in the business. Governments must continue to work closely with Community as we do everything we can to secure a future for our steel industry.”
IndustriALL assistant general secretary Fernando Lopes said:
“It’s ironic that a Conservative government with a free market fundamentalist business secretary has part-nationalized the British steel industry. This is what happens when ideology hits the wall of reality.
“This is an important first step, and it shows that our arguments are winning. However, there is a lot more that needs to be done to ensure that this vital industry has a sustainable future.”