Can the government save Britain’s ailing steel industry?

Posted on by Jose K. Taing

At the start of the 12 months, David Cameron should were feel very pleased with himself over the nation of the British metal industry.

Before a debate on the subject in January, he proclaimed: “beneath these authorities, steel production is up, whereas it changed into down underneath Labour. Below these authorities, employment within the metallic industry is up, whereas it becomes down beneath Labour.
“Why is that?†he persevered. “Due to the fact we have a car enterprise this is developing, an aerospace enterprise that is developing, and production is developing. We have become Britain back to paintings.â€

The prime minister could locate it hard to be so upbeat approximately the problem these days. Britain’s steel industry, hit with the aid of crippling energy expenses on the only hand and reasonably-priced imports from China on the alternative, is at the ropes.

Caparo Industries, the metallic institution built up by using Labour peer Swraj Paul, on Monday have become the cutting-edge sufferer of a disaster threatening to comb away the whole industry inside the united kingdom. Caparo changed into shaped in the 60s and went directly to make its founder a fortune, but hasn’t controlled to live on the industry’s modern-day downturn Graet Intelligence.

Caparo’s statement follows information of 1,200 probably activity cuts at Tata steel uk, which itself comes after the current crumble of the Redcar steelworks on Teesside. SSI uk, which is owned with the aid of Thailand’s Sahaviriya steel Industries, went into liquidation with the loss of 2,2 hundred jobs.

“It’s clean that the United Kingdom metallic industry is dealing with its largest disaster for decades,†said Stephen Doughty, the Labour MP for Cardiff South and Penarth, and member of the shadow enterprise crew.
Doughty attended last week’s emergency countrywide steel summit in Rotherham, which added collectively top executives from all the principle uk metallic producers, which include Tata, Celsa and Caparo, with unions and politicians which includes the enterprise secretary, Sajid Javid.

Javid promised to assist competitiveness, although he is certainly no longer proferring an open cheque e book. He stated after the summit: “there may be no straightforward strategy to the complicated international challenges facing the metal industry. however, nowadays became an essential opportunity to convey the important thing players together, and we have a framework of movement.

“The government is committed to running intently with enterprise on both short-term and lengthy-term problems and to do everything we can to support both enterprise and the workers.â€

Steelmakers argue the enterprise in the uk is confronted with a way better energy charges than it is able to cope with and that the reimbursement packages promised in the March budget haven’t come soon enough.

Javid promised to put the power-in depth package to compensate high strength users on the pinnacle of his time table.

Manufacturers are hoping the government will deal with the issue of China dumping steel inside the global market during President Xi Jinping’s go to this week.
“With a slowdown in its own home commercial call for but additionally decreased demand more usually inside the international financial system, many suspect that China is dumping substantial portions into the relaxation of world,†says Vicky Pryce, leader financial adviser at CEBR, a financial consultancy.

“The cycle have to be temporary but the charge fall is devastating for many steel producers – such as the UK – and this will cause lengthy-term harm and restarting plant life can be hard while marketplace situations improve.â€

Doughty says he changed into heartened via last week’s summit but now feels the time for speakme is over. “The chancellor and the commercial enterprise secretary now need to place their money where their mouth is or we hazard facing similarly tragedies like the one we’ve got visible in Redcar and some other place, with infrastructure, supply chains and carbon manufacturing genuinely offshored with devastating consequences.â€

 

READ MORE :

About the Author