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PM pledges to raise steel 'dumping' with Chinese leader

Published 19/10/2015

Stockton South MP James Wharton said he was optimistic for the future of Teesside
Stockton South MP James Wharton said he was optimistic for the future of Teesside

The Prime Minister has pledged to raise the issue of the "dumping" of cheap steel with the Chinese president amid fears of fresh job losses in the crisis-hit industry as another firm went into administration.

Speaking in the Commons, David Cameron said no subjects were off the table during the four-day visit by President Xi Jinping.

The TUC warned that one in six steelworkers now faced the prospect of losing their jobs following a series of announcements which have hit steelmaking areas across the UK.

Around 5,200 UK steelworkers face redundancy, the TUC warned.

The jobs cull started with news that the Thai owners of the Redcar steelworks on Teesside had gone into liquidation with the loss of 2,200 jobs.

Tata is expected to announce up to 1,200 job cuts in Scunthorpe and Scotland tomorrow, while Caparo went into administration today.

Unite said 1,700 jobs were threatened at the firm, owned by Labour Peer Lord Paul, which has plants across the UK, but mainly in the West Midlands.

Matt Hammond, lead administrator at PwC, said: "This is a significant business with a wide range of interests across steel, engineering, vehicles products and technologies.

"Its scale and reach into significant customers and its importance to suppliers cannot be understated. We will be rapidly assessing all options for the businesses through this week and beyond.

"The impact of steel prices and exchange rates has had an impact on some parts of the Caparo Industries group. However there are businesses in the group that are not directly affected by steel prices, and likewise many where there is both strong customer demand and critical supplier support.

"Our focus for the next 36 hours is on briefing staff across the group and working closely with their management teams to ensure that every opportunity for these businesses is considered. We will be working with all parties to ensure the best outcome for all creditors of each business."

The Prime Minister told Labour leader Jeremy Corbyn: "Of course, we're doing everything we can in Europe to help our steel industry.

"That is why we voted in favour of dumping tariffs against the Chinese and we'll do everything we can to help our steel industry, including looking at how we help on high energy usage and the clearances that we need with that.

"Will we raise it with the Chinese? Of course, we'll raise all these issues. That is what our relationship with China is all about.

"It is at such a high level that there is no subject off the table and all of these issues, including the steel industry, of course will be discussed."

Tony Burke, assistant general secretary at Unite said of the latest news: "This is yet another hammer blow for steel and manufacturing communities across the UK already reeling from the closure of Redcar and job losses at Tata steel.

"Our members at Caparo Industries are highly skilled and work hard to produce world class products. We believe that the company has a future. Unite will be working with Caparo's administrators and doing everything in our power to save jobs.

"Government ministers need to ask themselves. How many more steel firms need to go to the wall before they step in and support the UK's steel industry?

"Failure to act urgently could lead to a 'domino effect' taking hold across the industry, leading to the loss of yet more skilled jobs as firms buckle under a combination of steel 'dumping' and high energy costs.

"The Government's 'March of the Makers' and 'Northern Powerhouse' will become meaningless rhetoric, if it fails to act swiftly and the livelihoods of thousands of people left in tatters."

Angela Eagle, shadow business secretary said: "This is a further blow to the steel industry which is now on its knees, and my thoughts are with the employees of Caparo who are facing uncertainty over their future.

"The industry needs urgent action from the Government. However, this Government seems content to let the industry fail.

"Rather than setting up more talking shops, the Government should be taking action to tackle higher energy prices, they should be providing export and procurement support and be looking at what temporary measures could help the industry, including looking again at business rates.

"With the Chinese president in the UK this week, I hope the Government will raise the issue of anti-competitive dumping which is driving down steel prices."

Roy Rickhuss, general secretary of steelworkers' union, Community, said: "This news is another devastating blow to Britain's steel industry. Caparo's workforce produce high quality finished steel products and has been battling against an increasingly challenging global market.

"This news is a tragic reminder of the urgent need for government action to help our steel industry survive. Crippling energy costs and the dumping of cheap Chinese steel is threatening the very future of the UK's steel sector.

"We will be working to support our members within Caparo at this difficult time and are seeking an urgent meeting with the company to understand exactly how this announcement will impact the workforce.

"This is an industry-wide crisis. It is vitally important that Britain's steel companies hold their nerve and that government works with unions and the industry to build a sustainable future for UK manufacturing with steel at its heart."

Trade body UK Steel said the issue of Chinese steel should be raised during the visit of the Chinese president from tonight.

Director Gareth Stace said: "If the worst is confirmed with further job losses in the steel industry, I would hope the Prime Minister would use the opportunity of this week's visit to raise the issue of Chinese dumping of steel.

"As well as reinforcing the need for the EU to tackle unfair dumping of steel across Europe, Mr Cameron's intervention would send a powerful signal to Beijing that he is prepared to stand up for British steelmakers.

"If the Prime Minister can make headway on this, and the Business Secretary can act quickly to tackle spiralling energy costs by compensating the industry for the various levies that penalise it, we may start to give the steel industry some confidence that the Government is supporting it before it's too late."

TUC general secretary Frances O'Grady said: "One in six UK steelworkers face losing their jobs. At this rate there won't be a British steel industry in a year's time.

"Ministers cannot afford to stand on the sidelines and watch this crisis unfold. They must step in now with a rescue package.

"From solar to steel, the Government's lack of industrial strategy is costing the UK dear.

"If David Cameron and George Osborne don't up their game, more firms will go to the wall. They must provide emergency financial support in next month's Spending Review. And they must urgently raise with the Chinese president the devastating impact Chinese steel dumping is having on British manufacturers."

Caparo Industries comprises around 20 individual businesses involved in steel and engineering, creating products for the aerospace, automotive and engineering industries.

Three subsidiaries are not in administration, two in the UK (Caparo Merchant Bar and Caparo India) and one in Poland (Bomet SA).

PwC said workers will be briefed on the impact of administration, stressing that staff are attending work as normal and will be paid, adding: "In these respects it is business as usual while the administrators' review gets under way."

Tom Blenkinsop, Labour MP for Middlesbrough South and East Cleveland, attacked Mr Cameron and the Government's record on helping the steel industry.

He said: "Is the reason the Prime Minister didn't raise the steel crisis because he is embarrassed that his own carbon floor tax makes us less competitive than our EU allies, that he personally has failed to act on Chinese dumping unlike our EU and US allies, and that he personally rejected calls to request European global adjustment funds for over 5,000 directly affected steelworkers?"

Mr Cameron replied: "I don't see any point in trying to play politics over this issue.

"The British Government is doing everything that we can, and every issue that we can take up, we will."

He then urged MPs to "work with us and we will do everything we can to help these industries".

The expected closure of the last steelworks in Scotland, at Cambuslang and Motherwell, will bring to an end almost 150 years of the industry in the country.

At its peak, steelmaking employed more than 10,000 people in plants and surrounding businesses in central Scotland with the famous Ravenscraig site once the biggest producer of hot-strip steel in Europe.

The industry was the centre of many Lanarkshire communities and Motherwell Football Club still use the nickname "the Steelmen" in tribute to the workers who supported them.

The steel industry worked closely with shipbuilding - Scotland's other famous heavy industry - supplying the metals for construction, but as a downturn on the Clydeside yards took hold, the steelworks soon followed.

Around 400 jobs remain in the two threatened Tata plants.

Roy Rickhuss, leader of Community, added: "We have had a succession of ministers, and now the Prime Minister, saying that they will 'raise' the issue of Chinese steel dumping, which we know is impacting on the UK steel industry and the global steel price.

"The Prime Minister needs to do more than 'raise' the issue. He needs to tell the Chinese premier what action he's going to take to stop Chinese steel damaging 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 tell UK steelworkers today when his government is going to bring forward the compensation package for energy intensive industry."

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