Cometh the hour, cometh the (wo)man. As a rule, politicians like a good crisis more than chief executives. It gives them a stage upon which to play the hero. It’s unsurprising therefore to see David Cameron tweeting about how he’s (heroically) chairing an emergency meeting of ministers and Sajid Javid cutting short his trip from Australia to help save the UK steel industry, after Tata announced it had had enough of it earlier this week.
Except this crisis isn’t exactly something that just happened out of the blue. It’s not an act of God, no matter how much that might suit the PM. The British steel industry has been in decline for decades, but in recent years has been under intolerable pressure from the Chinese. The dramatic slowdown in heavy industry there has led the People’s Republic to flood the market with cheap steel, which has inflicted heavy losses on Indian giant Tata’s UK operations. The Port Talbot plant has apparently been costing it £1m a day.
All this was perfectly well understood. Indeed, the government has until recently actively resisted attempts to protect the industry on a European level - doing so would conflict with its goal of making the UK ‘China’s best partner in the West’ and besides, the government isn’t exactly trigger happy when it comes to spending public cash propping up declining industries. Without such help or an uptick in prices, an outcome like this was inevitable.
Both Cameron and Javid have informally (though not exactly heroically) ruled out nationalisation, while promising the government will do ‘everything it can’ to protect the thousands of jobs at stake. It seems unlikely a private bidder would take on a business under such distress without some form of state aid, however. The outcome remains to be seen.