Struggling steel industry sparks crisis in UK
The British government scrambled on Thursday to save the country's struggling steel industry after Tata Steel announced plans to sell its UK plants, which employ almost 20,000 people.
Prime Minister David Cameron held a crisis meeting at 10 Downing St, and said the government would do "everything it can" to keep steelmaking in Britain.
But, he said, "this is a difficult situation. There's no guarantee of success.
"This industry is in difficulty right across the world," Cameron said. "There's been a collapse in prices, there's massive overcapacity."
The steel industry in Britain, like many developed economies, has been hit hard by cheap Chinese imports, which have depressed prices, and manufacturers have asked the government and European Union to impose anti-dumping duties.
Tata Steel, which operates the country's biggest steel plant at Port Talbot in south Wales, is losing £1 million ($1.4 million) a day in Britain, the UK government has said. A sale or restructuring would likely involve heavy job losses in places like Port Talbot, a battered but proud steel town where Tata employs 5,500 people.
Tuesday's decision by the Indian company to shed its British steelworks appeared to catch UK authorities by surprise. Cameron was on vacation in the Canary Islands, while Business Secretary Sajid Javid was in Australia.
Javid, who quickly flew back to Britain, said the steel industry "is absolutely vital for the country and we will look at all viable options" to save it.
The opposition Labour Party has urged the government to nationalise the steel industry - as it did struggling banks, which received billions in public money to keep them afloat during the 2008 financial crisis.
Labour's economy spokesman, John McDonnell, said temporary nationalisation would be "cost-effective in the long term.
"It isn't just the cost of losing those jobs, as we've seen elsewhere. It's the cost of devastation of whole communities. And remember, we will be paying out in unemployment benefits and other benefits to those people who lose their jobs," he said.
But Cameron said: "I don't believe nationalisation is the right answer." He suggested the government could provide incentives to steelmakers, including a guarantee that British-made steel would be used in major defence and infrastructure projects.