Tata Steel is set to pull out of all its UK operations, including Port Talbot, in a move that could put thousands of jobs at risk.
The company announced late on Tuesday night that its board had rejected an “unaffordable” turnaround plan for Port Talbot and instead given the green light to a sale of its UK business.
The move will affect about 15,000 workers and comprises the sites that used to make up British Steel and then Corus, which was bought by Tata Steel in 2007.
Port Talbot is Britain’s biggest steelworks and employs 4,000 people. However, it is losing £1m a day, making the prospect of finding a buyer difficult.
Union leaders travelled to Mumbai to discuss the company’s UK business, hoping Tata would agree to a turnaround plan to keep steelmaking in Port Talbot and other UK plants.
The MP for Aberavon, Stephen Kinnock, who was in Mumbai to lobby the Tata board, was briefed after the board meeting by Tata’s chief financial officer.
Kinnock told the South Wales Evening Post on Tuesday night: “We will not allow the closure of Port Talbot steelworks. One way or another we will continue to make steel in Port Talbot but it looks like Tata do not back the plan. We will work with Tata and the UK government to help find a buyer for the plant.”
The news will affect other Tata plants including Rotherham, Corby and Shotton. It is already in the process of selling its business in Scunthorpe to Greybull Capital, an investment firm.
In a statement, Tata Steel confirmed its board had recommended exploring “all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in part”.
Tata blames cheap imports of Chinese steel, high energy costs and weak demand for threatening the future of its UK steelmaking.
It said it had been in deep engagement with the government about “seeking its support to achieve the best possible outcome for the UK business, within the restrictions of state aid rules and other statutory limits”. Tata said these talks would continue.
Union leaders said it was a “very dark day”, while a spokesman for Jeremy Corbyn said the Labour leader was “extremely concerned” about the reports from Mumbai. “The government must act now to protect the steel industry in Britain. Steel production must be maintained in Port Talbot,” the spokesman said.
Corbyn has previously called on the government to take a stake in the steel industry in order to protect jobs and prevent plants from closing.
A crisis has engulfed much of the British steel industry in the past 12 months, with the Redcar steel plant, owned by Thai company SSI, closing late last year with the loss of 1,700 jobs. Port Talbot has already had to bear the brunt of 1,000 job losses announced in January.
Earlier on Tuesday, Labour criticised Sajid Javid, the business secretary, for planning to fly to Australia on a trade visit while the fate of the Port Talbot plant hung in the balance.
A spokeswoman for David Cameron conceded that no British minister was in Mumbai to monitor the progress of Tuesday’s board meeting.
“We are working very closely with the industry to look at ways we can help to deliver a long-term, sustainable future,” the spokeswoman said. “There are already a number of steps that we have taken for the steel industry more broadly. We stand ready to work with Tata.”
Ahead of the news from Tata, the business minister, Anna Soubry, said the government was determined to ensure that Port Talbot continues to make steel.
Speaking on the BBC’s Today programme on Tuesday morning, Soubry said: “I don’t think you should underestimate the determination of this prime minister, and this government, to make sure that we continue not just to roll steel at Port Talbot, actually to make it there, and at Scunthorpe as well. That is our determination.”
Soubry sought to blame Vince Cable, who was business secretary under the Conservative-Liberal Democrat coalition government, for failing to do enough to protect the Port Talbot plant in the past.
“I think Vince could have done more: sorry, but that is my view,” she said. “When I was appointed, the prime minister specially said to me, ‘We have some very real problems in our steel industry, and I want you to devote a large amount of your time to solving those problems as much as you can’.”
Soubry suggested that the government was poised to take action if the plant looked set to be closed. “We are looking at all manner of options that may or may not be available to us as a government,” she said.
The Plaid Cymru leader, Leanne Wood, seized on the news to call for the Welsh assembly to be recalled to discuss the possible consequences of a sell-off.
Len McCluskey, the general secretary of Unite, said: “This is a very dark day for the proud communities and a proud industry, which is now on the verge of extinction in this country.
“My message to Sajid Javid and his government is that they cannot let another Redcar situation happen. Their dithering over intervention allowed the lights of that key industrial asset to be snuffed out.”
The shadow business secretary, Angela Eagle, said the government should consider part-nationalising the plants to “shelter the assets until the storm has passed”.
“I think the government should be pulling out all the stops to make certain we can preserve our steelmaking industry in this country”, she told the BBC’s Newsnight.
“We have got to get the government to deliver on the assertions, from the prime minister down, that they want to preserve the steelworks in this country.”
Otherwise, she added, the prime minister’s expressions of concern would be exposed as “tea and sympathy, and hypocrisy”.
Eagle later said: “Sajid Javid and his team seem to have gone missing in action at this crucial time.”
Roy Rickhuss, the general secretary of the Community steelworkers union said: “We travelled to Mumbai to secure a future for steelmaking in south Wales and we are disappointed that the future remains uncertain, not just for Welsh steelworkers, but for thousands more workers in Tata’s businesses elsewhere in the UK.
“However, our worst fear that Tata would announce plant closures today has not been realised. This is testament to the skills, experience and passion of UK steelworkers.
“They are a world-class asset and now it seems other investors will have the opportunity to continue generations of world-class steel production.
“We will of course wait to see the detail of Tata’s divestment plans but, as we said before, it is vitally important that Tata is a responsible seller of its businesses and provides sufficient time to find new ownership.
“There is also a crucial role for both the Welsh and UK governments to do all they can to ensure a future for Tata’s remaining UK steel businesses, and to provide every assistance to secure a buyer that will continue steelmaking.
“We don’t want just want more warm words, we want a detailed plan of action to find buyers and build confidence in potential investors in UK steel.
“We set out to Save our Steel in south Wales. We told Tata in no uncertain terms that there must not be an end to UK steelmaking. Our campaign has now broadened to saving Tata’s remaining UK assets and securing a future for UK steelmaking, and Community as the steelworkers’ union will not give up on that future.”
guardian.co.uk © Guardian News and Media Limited 2010