Commenting on the Business Department’s announcement today that it will provide financial support to the purchaser of the steel plants currently owned by Tata, Simon Walker, Director General of the Institute of Directors, said:
“Politicians have a chequered history of attempting to prop up industries which are in difficulty. A similar move with MG Rover in 2005 proved fruitless, leaving the taxpayer with millions of pounds in losses. There is no reason to think that the long-term issues affecting the steel industry will suddenly disappear, and the sums at stake here could be far greater.
“Taking an equity stake in the steel plants would be particularly risky, giving the government the lowest chance of getting its money back. We urge the Business Department to think long and hard about the precedent it would set if it part-nationalised the steel industry. The question is not whether the plants can be kept running for a little longer, but whether there can be any certainty that their long-term viability justifies such a rare and uncertain move.”