Scottish Daily Mail

MP’s mea­gre re­sponse to the UK steel cri­sis

- By Rob Davies

PER­HAPS politi­cians have a dif­fer­ent def­i­ni­tion of ‘swift ac­tion’ to the rest of us. Busi­ness min­is­ter Sa­jid Javid called for a rapid re­sponse ahead of an emer­gency sum­mit of Eu­ro­crats to dis­cuss ways to save the steel in­dus­try.

Javid had pushed for the sum­mit af­ter Bri­tish steel­mak­ers an­nounced plans for 5,000 job losses in a mat­ter of weeks.

The chief cause is that Chi­nese firms, which are heav­ily sub­sidised, are dump­ing bar­gain base­ment steel on the Euro­pean mar­ket to off­set wan­ing de­mand at home.

As the meet­ing ended, it fell to Lux­em­bourg’s econ­omy min­is­ter Eti­enne Sch­nei­der – whose ex­pe­ri­ence of res­cu­ing a multi-bil­lion dol­lar in­dus­trial sec­tor must be lim­ited – to ex­plain what Europe was go­ing to do about it. So what did we get? A prom­ise to make in­ves­ti­ga­tions into un­fair trade faster, which sounds great un­til the caveat; the need for agree­ment among 28 mem­ber states means probes will never move as swiftly as they do in the US.

Big deal, as the Amer­i­cans might put it.

Euro­pean politi­cians will also ‘in­ten­sify’ dis­cus­sions with steel pro­duc­ers like China, Rus­sia and Be­larus.

Trade min­is­ters of those coun­tries must be quak­ing in their boots at the prospect of a dress­ing down from Europe’s sec­ond-tier politi­cians.

There will be a ded­i­cated Euro­pean steel con­fer­ence with in­dus­try fig­ures – or in other words, an­other sum­mit.

Mem­ber states will also get more lee­way to prop up their in­dus­tries un­der Euro­pean state rules, al­though the de­tails of this re­main sketchy.

Steel­work­ers will be for­given for not fling­ing their hel­mets in the air with sheer glee.

Javid, who had said the sum­mit must be more than a ‘talk­ing shop’, de­clared him­self sat­is­fied with th­ese ‘en­cour­ag­ing and im­por­tant com­mit­ments’.

Definitely not a talk­ing shop then.

In all fairness, Chi­nese steel dump­ing can only be dealt with via the Euro­pean Union, so the Bri­tish gov­ern­ment must con­cen­trate on what lies within its con­trol.

But with just 25,000 steel­work­ers left in Bri­tain, com­pared with 250,000 in the hey­day of Bri­tish Steel in 1967, the sound of the door clang­ing shut on an empty stable is deaf­en­ing.

The in­dus­try’s de­cline threat­ens to make ghost towns of places once renowned as cen­tres for tech­ni­cal prow­ess, such as Red­car, Scun­thorpe and Port Tal­bot.

And the sup­port on of­fer to help work­ers man­age the tran­si­tion is mea­gre.

Tata Steel, which is cut­ting 1,200 staff, put up £3m via its re­gen­er­a­tion arm UK Steel En­ter­prise to help cre­ate new jobs in Scun­thorpe.

The Gov­ern­ment promised to stump up £6m.

But this is small change in the con­text of an area about to kiss good­bye to what was once a gleam­ing com­po­nent of a multi-bil­lion pound in­dus­try.

The gen­eral pub­lic is not im­pressed, with one Sur­va­tion poll find­ing that only 14pc of peo­ple think the Gov­ern­ment has han­dled the cri­sis well.

Seven in ten peo­ple want direct in­ter­ven­tion to save the in­dus­try and – in an un­likely turn of events –more than half of Con­ser­va­tive vot­ers polled think na­tion­al­i­sa­tion should be on the ta­ble.

An al­ter­na­tive school of thought has gained ground, namely that if the UK in­dus­try can­not com­pete with China, it does not de­serve to sur­vive.

BUT that ig­nores the fact that cheap Chi­nese steel is un­fairly un­der­writ­ten by Beijing through ‘soft loans’ at low in­ter­est rates that would be com­mer­cially un­avail­able.

Politi­cians have it in their gift to level the play­ing field some­what via do­mes­tic leg­is­la­tion.

First, if they are se­ri­ous about re­bal­anc­ing the econ­omy to­wards man­u­fac­tur­ing, they can take ac­tion on busi­ness rates, which Tata Steel says can be up to ten times the equiv­a­lent taxes in Europe.

Sec­ond, they could do some­thing about the fact that Bri­tish steel firms pay about twice as much for their en­ergy as coun­ter­parts on the con­ti­nent.

It looks as if th­ese two mea­sures are on the cards, but pol­i­cy­mak­ers must move quickly if they want to stave off fur­ther job losses.

That would at least help our steel­mak­ers com­pete with Euro­pean ri­vals.

Then we can con­cen­trate on send­ing the Lux­em­bourg econ­omy min­is­ter to take a tough line with China.

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