David Cameron is under mounting pressure to intervene in the crisis threatening the future of the steel industry amid warnings that 40,000 jobs could be lost if Tata pulls the plug on its British operations.
Amid signs of disarray in Whitehall, Downing Street rejected demands for the recall of Parliament, but Cameron will now chair an emergency meeting of ministers to discuss ways of keeping the embattled business afloat.
Sajid Javid, the Business Secretary, cut short a visit to Australia following criticism of his absence from the country when so many British jobs hang in the balance.
He has already been attacked for failing to join politicians and union leaders who flew to India to lobby Tata’s main board as it discussed the fate of its British operations.
The conglomerate opted to pull the plug on its Tata Steel plants in Britain, which are losing nearly £1m a day, as soon as possible. It employs 15,000, including 4,000 at Port Talbot in south Wales where steel has been produced for more than a century.
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The IPPR think-tank calculated that a further 25,000 jobs depend directly on the company, including iron producers, coke and petroleum suppliers and machinery manufacturers. It said its calculations did not take into account the impact on local businesses of steel workers losing their livelihoods. Ministers pressed Tata to delay its plans to mothball the plants in order to identify potential buyers for its British business, but sent out conflicting signals over how best to rescue the steel jobs.
Business minister Anna Soubry refused to rule out nationalising parts of the ailing industry, insisting that “all options” were being considered by the government. But Mr Javid, who described the industry as “absolutely vital for the country”, later said he did not believe that nationalisation was “the solution” to the crisis.
Cameron flew back from his family holiday in the Canary Islands to hold talks with ministers and officials on the situation.
Thursday’s Downing Street meeting is expected to focus on providing short-term state aid to Tata to keep its UK plants operating while one or more buyers are sought, although ministers would have to operate within European Union rules over state aid.
The rival camps in the EU referendum campaign clashed over where the blame lies for the crisis.
UK, US, Canada (these English speaking countries) will always try to suck all money from a black, brown, or yellow company owner.
They deliberately create conditions for company to suffer and close down.
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Vote Leave pointed to Britain’s inability to take unilateral action against cheap Chinese steel and to the bloc’s restrictions on state aid.
But a spokesman for Britain Stronger in Europe said: “Over half our steel exports go to the EU and leaving could actually make the situation worse.”