By Roy Rickhuss
The cruel irony of the prime minister welcoming the president of China just as steel jobs are cut – partly due to Chinese steel dumping – will not be lost on the UK’s steelworkers and their families.
Tata Steel’s announcement yesterday that 1,170 jobs are now at risk at its sites in Scunthorpe and Lanarkshire is yet another blow to the UK’s steel communities. It came just a day after Caparo went into administration putting 1,700 steel jobs on the line and only weeks after SSI closed making 2,200 people redundant.
These figures are only the direct jobs that are affected. There will be knock-on effects to thousands of other people who are contractors in the industry or whose businesses rely on the steelworkers’ pound being spent in their communities. The UK steel industry crisis will have far-reaching consequences beyond those whose jobs are in the headlines.
Faced with this stark crisis it would be reasonable to expect the UK government to step-up and take action. There have been plenty of warm words and even some policy announcements. But what is lacking is the political will to deliver on those promises and policies.
The visit of Xi Jinping sharpens the focus on the government’s attitude to the UK steel industry. With any relationship it should be two-way. But steelworkers looking on will feel their jobs are being sacrificed for the sake of Chinese investment as the government continues to turn a blind eye to Chinese dumping.
The issue of dumping – where a country exports a product for either less than the price of it in the domestic country or less than the cost of making it – is having an impact on the UK steel industry and the global steel price.
A succession of ministers, and even the prime minister, have said they will ‘raise’ this issue with China but they need to do more than just raise it.
David Cameron needs to tell the Chinese what action he will take to stop them destroying the future of a vital foundation industry in the UK. He needs to tell them that infrastructure projects will not be at the expense of UK industry and communities. And he needs to demonstrate that he’s prepared to stand up for UK steel in a difficult global market.
Xi Jingping’s visit comes only weeks after the chancellor was in China, touting for investment and dangling opportunities for the Chinese to be involved in major infrastructure projects such as HS2. It is little wonder the UK steel industry is nervous about the implications of such dialogue.
Tata Steel in Scunthorpe has the capability and capacity to make the steel for HS2 but members of our union, Community, are understandably sceptical about reassurances from George Osborne that Chinese investment will create opportunities to use British-made steel for such projects.
But the blame for the current crisis cannot all be placed on China. The UK doesn’t even operate on a level-playing field within Europe because of the lack of government strategy in industrial and energy policy. For example, the UK’s industrial electricity costs can be as much as 82% higher than competitors in France or Germany.
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In the 2014 Budget, the chancellor made great play of a compensation package for energy intensive industries, which is intended to offset some of the increased costs steel producers face due to his government’s energy and environmental policies. However, the industry is still waiting for the full compensation package to be brought forward.
The government argues that it is waiting for state aid approval from the European Commission. Competitor countries like Germany provided support and compensation to their steel industries and received retrospective approval for their action. German steel companies have benefited from this since 2012 while the UK has just been waiting for action.
UK steel producers need a sign from the government that it is serious about the industry's future. Implementing the compensation package in full would send the right signal and steady the nerves of an industry on its knees.
The job losses of recent weeks are unsustainable. As a trade union, the human and social cost to our members whose jobs have gone or are at risk, is at the forefront of our minds.
However, the economic cost of losing steel capacity has wider implications. Steel is a vital foundation industry on which our manufacturing and construction industries are built. You can’t have a strong manufacturing base without a strong steel industry.
This Conservative government constantly talks about security. But it’s failed to help the job security of steelworkers. The prime minister must find the political will to save our steel for the sake of steelworkers, their families and communities.
Roy Rickhuss is Community's general secretary.
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