Government says nationalisation of Port Talbot "not the solution"

 
Jessica Morris
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The government would be prepared to prop up Port Talbot (Source: Getty)

The business secretary has said the government will "look at all viable options" to save Port Talbot's steel industry, but nationalisation is "not the solution".

Sajid Javid said that the sector is "absolutely vital" for the UK, however he isn't convinced that nationalisation is a "long-term viable solution", ITV news reported.

Downing street has said that the prime minister is due to chair a meeting of key ministers regarding the crisis first thing tomorrow morning.

Speaking on BBC's Today programme earlier, business minister Anna Soubry said: "We are, and have, and continue to look at, all options and I do mean all options" in response to whether the government would nationalise Tata's remaining plants.

However, she subsequently added: "We have to be very careful because we have these state aid rules."

Read more: Tata looking into sale of UK assets

EU state aid rules could stand in the way of heavy-handed government intervention by the government.

The government is worried Tata could seek to close the Port Talbot plant in south Wales within weeks if it fails to find a buyer. But this is expected to be difficult given the SSI-owned Redcar steel plant closed down last year following a fruitless search.

There are also mounting calls for the government to prop up the steel sector, which has been stung by a flood of cheap steel imports from China, as well as high energy costs, high business rates and a strong pound.

Read more: This chart shows the decline of the UK's steel industry

"I don’t think nationalisation is the right way forward, but what’s being hinted at is temporary nationalisation," Terry Scouler, the chief executive of the manufacturers’ organisation EEF, told the Today programme.

Similarly, Wales first minister, Carwyn Jones, told Sky News he thinks that the government should consider temporarily buying Tata's UK assets.

"We can’t do it - we haven’t got the resources, but the UK government has got those resources."

The company's Port Talbot site is estimated to be losing £1m a day alone.

And Tata added last night that it suffered a £2bn impairment on all of its UK sites in the last five years.

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