Britain’s stricken steel sector needs government action within “weeks not months” if it is to survive an onslaught that threatens its future, industry representatives have warned MPs.
Gareth Stace, director of the UK Steel lobby group, told a parliamentary select committee that the industry was like a “patient on the operating table”.
“We are bleeding very quickly and unless it’s stopped very soon we are likely to die,” he added.
The sobering comments come in the wake of several plant closures since the summer, triggered by a dramatic collapse in global steel prices, which have resulted in more than 4,000 redundancies, or about 15 per cent of the sector’s workforce.
The possibility of further shutdowns was left open by Tor Farquhar, a director at Tata Steel. Britain’s biggest steelmaker cut nearly 1,200 jobs last week as it scaled back its Scunthorpe plant and mothballed Scotland’s last two steelworks.
“We aren’t making announcements today [but] there’s no guarantees . . . Nothing can be ruled out. We are under massive pressures,” Mr Farquhar said.
Mr Stace called on ministers to follow through with pledges, made at an emergency summit this month, to address issues affecting the British industry. These include “green” taxes on electricity bills, high business rates and the “dumping” of cheap steel imports from countries such as China.
In a sign of the growing political momentum, Sajid Javid, the business secretary, will canvass his fellow ministers to hold Europe-level talks on the future of the continent’s steel industry on a visit to Brussels tomorrow.
Mr Stace urged him to obtain “immediate” EU approval for a compensation package for energy intensive industries, which the government has previously said it expects to be cleared by next April.
“For every month we don’t get this package the sector in the UK pays £4.5m its competitors don’t. The case now for government to deliver is extremely urgent in the next few weeks. If it’s months there are potentially further casualties in the sector,” Mr Stace said.
Luis Sanz, managing director of Celsa, said the company faced electricity bills of €68 per megawatt hour to run its steel plant in Cardiff, whereas a similar operation in Germany would cost about €24/mWh.
But he rejected the suggestion from Richard Fuller, Conservative MP for Bedford, that the financial burdens of UK environmental policies were not a “significant” additional cost to steel businesses.
As the hearing started, the Department for Business, Innovation and Skills issued a statement saying that the industry would be able to take advantage of “special flexibilities” allowing some plants greater time to meet EU emissions rules. Yet Mr Stace said that this was one of the “easiest” of the five areas the industry wanted action on.
Appearing later at the meeting, Anna Soubry, the business minister, said she believed that the steel industry was strategically important for Britain, and that the government had begun to vote in favour of EU anti-dumping measures.
Source: http://www.ft.com/