MP’s meagre response to the UK steel crisis

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.