New pressure on Government to intervene in steel crisis

Workers at Tata Steel in Port Talbot. Picture: PA wire

Workers at Tata Steel in Port Talbot. Picture: PA wire

1
Have your say

The Government is under new pressure to intervene in the steel crisis following the disclosure that China has imposed hefty new tariffs on some steel products from the European Union.

Amid growing anger among MPs, opposition parties are demanding ministers "stand up" to Beijing warning that it has potential to "destroy" what remains of the steel industry in the UK.

The "dumping" by China of huge quantities of cheap steel on world markets is widely seen to have been one of the key factors behind Tata's decision to sell off its loss-making UK assets - leaving its plants such as those in Rotherham, Stocksbridge and Redcar as well as the Port Talbot in South Wales facing the threat of closure with the loss of tens of thousands of jobs.

The announcement on Friday that Beijing is to impose anti-dumping duties on "under-priced" steel from the EU, Japan and South Korea further inflamed feelings and intensified the calls for the Government to act.

The Chinese ministry of commerce said imports of grain-oriented flat-rolled steel will be charged duties ranging from 14.5% to 46.3%.

Tata's Cogent subsidiary in Newport is reported to be one of just 16 producers worldwide to make the hi-tech steel product hit by the levy.

Downing Street said David Cameron had raised the problems of global over production of steel with China's president Xi Jinping during the course of an international nuclear security summit in Washington.

"The Prime Minister raised concerns about the global steel industry, said we needed to work together to tackle the challenges with over-capacity and that G20 could be a good forum to address it later in the year," a Government source said.

But with the Government already facing accusations that it blocked moves by the EU to raise tariffs on Chinese steel, it did not go far enough for opposition parties, with Labour calling on Business Secretary Sajid Javid to change his position.

In a letter to Mr Javid, shadow business secretary Angela Eagle said: "If the Government and other EU members states now accept that steel making in the Europe is in 'emergency measures', then it would be possible to apply 'safeguards' to effectively halt the flood of imports into the EU."

She said Chinese dumping now had "the potential to destroy the UK steel industry", adding: "Will you commit to picking up the phone to Beijing as a matter of urgency to discuss these proposals?"

Liberal Democrat leader Tim Farron said the UK steel industry was now paying the price for Chancellor George Osborne's determination to woo Beijing at any price.

"This news is further pain added onto a community that has been kicked in the gut by Government inaction," he said.

"The Chancellor has made a 'better relationship' with China, a cornerstone of his economic policy. Now the consequences of that decision are being felt by steel workers.

"Rather than standing up for China in the EU, by blocking higher tariffs on their steel, he should be standing up to China on behalf of the UK steel industry."

Mr Javid, who visited Port Talbot on Friday after breaking off a trade mission to Australia, insisted the UK had been leading efforts in the EU to impose tariffs on cheap Chinese steel.

"I agree the EU needs to act more quickly," he said.

Meanwhile, in a separate development, public sector bodies will be required to consider the social and economic impact on the UK before buying steel from abroad, the Government has announced.
After a week in which the Government has struggled to formulate a response to the decision by Tata Steel to sell off its loss-making UK assets, ministers said they were taking steps to create a "level playing field" for British manufacturers.
Guidelines introduced last year requiring central government bodies to take into account the "true value" of British steel are to be extended across the public sector - including the NHS and local councils.
Under the guidelines, public procurements which involve the supply of steel will need to consider "responsible sourcing, the training suppliers give to their workforce, carbon footprint, protecting the health and safety of staff and the social integration of disadvantaged workers".
Contractors working for the public sector will also be required to advertise their requirements for steel so that UK firms can compete for the business.
Cabinet Office Minister Matt Hancock said: "Last year we changed the rules across all central government procurement to ensure buyers take into account the true value of British steel - including local impact and jobs.
"The industry is responding positively to this so I want to go further. Now we will apply this guidance across the public sector so that, from operating theatres to new buildings, public sector buyers will need to consider social and economic benefits, alongside value for money.
"When public bodies buy steel they must taking account of the true value of buying British."
Business Secretary Sajid Javid added: "I am determined to make sure we do all we can to secure a sustainable future for UK steel and find a viable solution that supports the workers and wider community.
"By changing the procurement rules on these major infrastructure projects, we are backing the future of UK steel - opening up significant opportunities for UK suppliers and allowing them to compete more effectively with international companies."
For Labour, shadow business secretary Angela Eagle said that while the announcement was welcome, ministers had to do more if they were to ensure the survival of the steel industry in the UK.
"The Government has been dragged kicking and screaming to take action to support the steel industry, which is a vital foundation industry and has descended further into crisis on their watch," she said.
"It is welcome that action is finally being taken by the Government on procurement and Labour has argued that shovel-ready infrastructure projects should be prioritised and British steel used whenever possible.
"As is so typical of this Tory Government, there is a yawning gap between rhetoric and reality, and they've presided over a failure when it comes to using British steel in public projects."

Back to the top of the page