The government should take over the pension scheme for Tata Steel, according to former business secretary Vince Cable.

It follows the news that Tata Group the Indian conglomerate has decided to sell its entire UK steel business, threatening jobs around the country. It currently employs around 15,000 people and has sites in Rotherham, Port Talbot, Corby and Shotton.

There had been speculation the government may nationalise the business, however, after a meeting with ministers yesterday, Prime Minister David Cameron said nationalisation was “not the right answer”.

Liberal Democrat Cable, who served as the business secretary during the coalition from 2010 until 2015 said the government “clearly weren’t prepared” for Tata’s decision.

Cable said if necessary the government should take a temporary role in ownership of the company. However he stressed that it would be “more sensible” for the government to take ownership of the pension fund.

“It’s a big liability, it’s a massive deterrent to anybody running the company, about £15bn. We have done this before when I came into office six years ago, Royal Mail was heading to the rocks and the Treasury took over the pension fund there and that enabled it to eventually be sold,” he said.

“That would be a way in which the government could play a real game changer and change the economics of it substantially. It’s got to be willing to do something drastic.”

Tata has previously tried to close the defined benefit pension fund to future accrual but were threatened with strike action by the unions, leading to “modified changes” to the scheme. The conclusion of the scheme’s triennial valuation last year revealed the scheme had a deficit of £90m at 31 March 2014.

Commenting on the situation at Tata, Unite general secretary Len McCluskey called for nationalisation of the business.

“This is the time for the government to say categorically, without hesitation, that these assets will be taken into safe-keeping by the nation because without them our economy will not flourish.”

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