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£10.5m package to support steelworkers slammed as 'woefully inadequate'

Published 23/10/2015

Tata Steel announced earlier this week it will cut 900 jobs from its plant in Scunthorpe, and 270 in Scotland
Tata Steel announced earlier this week it will cut 900 jobs from its plant in Scunthorpe, and 270 in Scotland

A package of up to £10.5 million announced to support steelworkers and the local economy hit by the latest wave of job cuts in the industry has been attacked as "woefully inadequate."

Tata Steel's regeneration arm has pledged £3 million to help create jobs in Scunthorpe, while up to £6 million will be given by the Government to train workers and help local businesses in the region.

The Indian-owned firm is also providing an additional £1.5 million to support job creation in steel communities around its Dalzell and Clydebridge sites in Scotland.

The UK Government said it was continuing discussions with the Scottish Government about further support.

Business secretary Sajid Javid said it was a "very difficult time" for the workforce, adding: "The Government has no intention of simply standing aside whilst the steel industry faces global challenges on a scale unprecedented in recent years. We will do everything we can to help workers and to ensure a level playing field for the industry.

"Tata Steel has a strong track record of creating jobs and supporting local communities right across the country, and its commitment to this package today is to be commended."

Tata Steel announced earlier this week it will cut 900 jobs from its plant in Scunthorpe, and 270 in Scotland, effectively ending steelmaking north of the border.

The firm said the cuts were in response to a shift in market conditions caused by a "flood" of cheap imports, particularly from China, a strong pound and high electricity prices.

Karl Koehler, chief executive of Tata Steel's European operations, said: "I recognise this is a challenging time for the employees affected by the restructuring we announced.

"We are committed to doing everything in our power to support those impacted and through UK Steel Enterprise we will help create new jobs in the affected local communities.

"The UK steel industry is facing extremely challenging circumstances and we welcome the Government's pledge to match our funding package for those affected."

Unite assistant general secretary Tony Burke said: "This is a woefully inadequate response from the Government to support a town and industry which is being rocked by job losses.

"Steelworkers will view this limp response from the Government as an insult which only deals with the symptoms, not the causes, of the steel crisis. Even then you have to ask just how much of an impact this new money will have in creating good-quality jobs and supporting the local economy.

"Scunthorpe and the surrounding area are reliant on skilled steel jobs. Once the jobs are gone the knock-on impact will be felt throughout the supply chain and the local economy. The Government funding is a drop in the ocean to what is needed."

Roy Rickhuss, general secretary of the Community union, said Tata Steel and the Government were "putting the cart before the horse".

He added: "There is still a consultation process to go through and no worker will be redundant until that is completed. Community is focused on looking at the rationale behind the proposals and all possible alternatives that will save jobs. It will be challenging but all parties should be focused on the consultation.

"Ministers should be looking to protect these quality jobs for future generations in these communities. The Government needs to get round the table with Tata Steel and the wider industry and implement the measures required to sustain steelmaking and retain skills and jobs in this vital foundation industry."

TUC general secretary Frances O'Grady said: "While this funding package will bring some extra support to the community in Scunthorpe, it doesn't save any jobs and it doesn't address the fundamental problems the UK steel industry is facing.

"If the Government doesn't get its act together soon on industrial policy, we will see more firms go to the wall, and instead of a Northern Powerhouse, we will have an industrial dead zone."

Shadow business secretary Angela Eagle said: "Labour welcomes the support for workers affected by the closure, however this is too little too late.

"The steel industry has been in crisis, and the Tory Government has sat on its hands and allowed thousands of high-skilled jobs to be lost."

The Business Select Committee is holding a session next Tuesday into the steel crisis.

Committee chairman Iain Wright said: "The UK's steel industry has been dealt a series of major blows in recent weeks and months. It is facing terminal decline, even though it is an essential foundation for other parts of our economy like aerospace, construction and automotives.

"As a committee we will be pressing the Government to explain what action it is taking now to help the steel industry through this crisis and its plans to support the industry as part of a competitive and dynamic manufacturing sector in the long term."

The Tata cuts followed 2,200 job losses at the Redcar steelworks on Teesside, and fears of redundancies at Caparo, which has gone into administration.

Scotland's Business Minister Fergus Ewing said: "In Scotland our priority for Dalzell and Clydebridge is to find a buyer, continue commercial production and keep as many jobs as possible. We will not give up on the steel industry and its workers.

"The funding from Tata and the UK Government for Scunthorpe is focused on regenerating the site and finding alternative employment once the steel plants have closed, not supporting the community to keep the steelworks open.

"During her visit, the First Minister and Tata Steel agreed that the firm would work with the Scottish Government's task force to seek the continuation of steel manufacturing on the sites by identifying a buyer that could ensure the highly skilled jobs are retained.

"The Scottish steel task force will meet next week and will look for new owners for some or all of the business, support affected workers to remain in place whilst alternative operators are sought and consider the regeneration needs of the wider area.

"We welcome the initial £1.5 million available from Tata for the area and we will have further discussions with Tata and the UK Government about financial support as the work of the task force progresses."

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