‘Very, very worried’

If the government wanted to help we’d have been the first steel plant in line for it, given the position of the company,” says Unite SSI convenor Kevin Cook. “Talk about a ‘steel summit’ is one thing but they need to get a move one.

“It’s a poor position. We could be the first to go under but the workers in other plants across the UK are very, very worried,” he told UniteLive.

 
“Here in Redcar the mood is very flat. Morale is very low at the moment.

 
“When people were told this morning they were dismayed and confused. That then turned to anger.

 
“There seems little SSI can tell us other than 1700 jobs are at risk and the plant is being mothballed. But mothballing a plant needs long-term pre-planning and money to maintain it and no one knows where that money will come from.

 
“We’ve been paid this month but the workforce wants to know if we will be paid next month. There is only pay in our pockets because the taxman refunded some money.

 
“The UK needs to keep steelmaking as a core industry for the future. It is inconceivable that this country will not be a steel producer but that is what we are facing.”

 
That will be a hard fight given the dumping of cheap Chinese steel on the global market. China’s economic slowdown has left them with a huge surplus and they have devalued their currency, making steel cheaper still.

 
Disadvantage

 
UK-based steelmakers are at a further disadvantage. European steelmakers face lower business rates, while money invested in UK-based plants pushes up the value of the business subjecting it to higher rates – almost a tax on investment.

 
European based steelmakers also benefit from far lower energy costs than their UK counterparts. While the UK government stands behind EU laws which limit state subsidy, other countries find a way to keep strategic industries like steel.

 
The company SSI said, “This decision has had to be taken against a continuing background of poor steel trading conditions across the globe and the consequential severe deterioration in steel prices experienced during the course of 2015, together with the view that this is unlikely to change in the short term.

 
“We will continue to work with various stakeholders, including government, with the objective of restarting operations at Teesside at some point in the future.”

 
The company also pointed to high business rates and high energy costs as key drivers in their proposal to mothball and axe 1700 jobs. The matter is now out to formal consultation but has caused a furore.

 
The decision has branded a ‘body blow to the community’, by Unite national officer Harish Patel. He said: “This is devastating news for Redcar and the thousands of people who depend on the steelworks for their livelihoods. Steel is the lifeblood of the local economy and runs through the community’s veins.

 
“The government’s much vaunted Northern Powerhouse risks being nothing more than empty rhetoric unless it steps in with assistance to save the SSI plant on Redcar.

 
“With so many livelihoods at stake and the UK steel industry at crisis point government ministers need to follow the lead of their counterparts in France, Italy and Germany by pursuing an active industrial strategy which supports the UK’s steel industry.

 
“Over the coming days Unite will be doing everything we can to support our members and the community and pressing government ministers to intervene and save our steel.”

 
Critical situation

 
Angela Eagle MP, Labour’s shadow business secretary, tore into the government over its lack of interest. “The latest announcement from SSI shows how critical the situation in Redcar is. Unless the government acts, 1,700 jobs will be lost.

 
“It is unacceptable that the government is allowing strategic industries to fail. This government’s ideological decision not to have an industrial strategy is putting jobs at risk.

 
“As we meet in Brighton the entire British industry is hanging by a thread and yet the Government seems reluctant to act decisively. Steel forms a vital part of a productive and competitive manufacturing sector.

 
“It is worth £45bn to our economy. No other government in Europe would be so slow to react. This government must act now with urgency to safeguard the future of steel making in the UK. The latest announcement from SSI shows how critical the situation in Redcar is. Unless the government acts, 1700 jobs will be lost.”

 
TUC general secretary Frances O’Grady said, “The future of British steel-making is at a crossroads. At a time when competitor nations are spending heavily on helping their energy-intensive industries to become greener, companies in the UK are being forced to pay huge costs.

 
“The Chancellor must provide more financial support for manufacturers in November’s spending review. If the government does nothing plants like SSI will continue to close.

 
“British steel-making contributes over £45bn to the UK economy and provides the kind of high-skilled labour we need to boost productivity. It can’t be allowed to wither on the vine.”