Ex-Treasury boss on bailing out British steel: ‘Supporting lame ducks has never been successful’

Sir Nick Macpherson, until recently the top civil servant at the Treasury, says if he was still there he would not recommend nationalising the Port Talbot steel works and other under-threat British steel works.

In an interview with the Financial Times published on Thursday, Sir Nick implied that industries like British steel are “lame ducks.”

He said: “Someone has got to represent the consumer and I think far too much debate in Britain is seen through the lens of the producer. In the end, the point I would make to people who want to intervene is that supporting the lame ducks has never been a successful policy.”

Pressed on whether this applied to Tata Steel’s Port Talbot plant in Wales, which is facing possible closure and the loss of 4,000 jobs, Sir Nick said: “Look, either someone is willing to pay a price — or, indeed, be paid to take the steelworks on — or they are not.”

“If they are not, there is very little government can do about it. And nationalising steel is not a policy I would be recommending if I still worked at the Treasury.”

India’s Tata Steel announced last month that it was putting its entire UK steel business up for sale and would close it down if a buyer could not be found.

Tata sold off several UK assets to Greybull Capital earlier this week but the fate of the biggest plant, Port Talbot in Wales, remains uncertain. The plant reportedly loses £1 million a day, unable to compete with cheap Chinese-made steel.

Sanjeev Gupta, founder of commodities group Liberty House, said he is looking at buying the Port Talbot, but only if the government subsidizes the deal.

Sir Nick is the outgoing top civil servant at the Treasury and has run the government office for a decade. He has served for 31 years in total at the Whitehall institution, rising to the top job under Labour Prime Minister Gordon Brown.

As well as not recommending nationalisation for the British steel industry, Sir Nick believes the government should consider selling its stake in Royal Bank of Scotland at a loss. He told the FT: “My one experience of running banks is that the longer they stay in the public sector, the greater the likelihood that you will lose value.”

The government has a £19.2 billion stake in RBS after bailing the bank out during the 2008 financial crisis. You can read Sir Nick’s full interview with the FT here.

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