Tories’ volte-face steel shame

The UK has been haemorrhaging steel jobs over the last seven months – by the latest count, more than 5,000 posts have been axed as the steel industry teeters on the brink of total collapse.

The government has repeatedly said that it will step in and support the industry.

Only last Friday (February 6), business secretary Sajid Javid joined leaders of seven other European countries in signing a letter to the European Council calling for “swift and appropriate measures” against Chinese and Russian dumping of cheap steel exports – one of the main drivers of the steel crisis in the UK and across Europe.

But not even a week later, in a stunning about-face, Javid admitted (February 10) that the UK government had blocked European member proposals that would definitively tackle the Chinese imports that are crushing the domestic steel industry.

In the proposals, which would have entailed scrapping a regulation known as the “lesser duty rule”, European member states would have been able to significantly hike tariffs on Chinese steel imports, so allowing domestic producers to compete on a level playing field.

EU tariffs on imported steel currently stand at only 9 per cent – far below the 66 per cent that critics have said is necessary to combat Chinese steel dumping.

But Javid said the UK government blocked this proposal because it would amount to protectionism.

“I think to go further, much further, might sort of, in the short term, sound like a way to go to try and protect a certain industry,” he said. But we also have to remember that in the UK, as well as manufacturers of steel, there are also companies that consume steel as part of their production process, and the impact that might have on to them.”

‘Unfairly protect’

Prime minister David Cameron also said that scrapping regulations to hike tariffs would unfairly protect the domestic steel industry.

Labour MP for Cardiff West Kevin Brennan recently highlighted the government’s duplicitousness in the New Statesman.

“The government will trumpet forthcoming anti-dumping measures against China as their doing, but in truth they have been leading a blocking minority in the EU, to stop the reform of trade defence measures to allow stronger action against Chinese dumping,” he said.

“At the same time the government has been falling over itself to persuade the EU to grant Market Economy Status to China, which would prevent action in future to stop dumping.”

Meanwhile, across the Atlantic, the US – usually thought to be the world’s foremost proponent of laissez faire economics – has swiftly moved to protect its own steel industry against Chinese imports.

As cheap foreign steel has hurtled through UK borders at tariffs below 10 per cent, the US department of commerce announced in December that it would sharply increase tax on Chinese steel imports – to 256 per cent.

The anger felt among UK steelworkers at the government’s continued inaction rose to a high point following yesterday’s news that the government rejected a straightforward proposal well within its grasp to combat Chinese steel dumping.

“When we hear what happened yesterday – that the UK government were the ringleaders in making sure that tariffs aren’t raised – we feel let down, disappointed and lied to,” said Unite rep Charlotte Upton, a Scunthorpe steelworker.

“They said they were going to stand up for steel, that they knew it was a keystone industry for the British people and then they’re words are not followed through with action.

Just looking

“My MP asked David Cameron how he was standing up for steel last week in Parliament and Cameron just gave a series of non-answers,” she added. “He said ‘we are looking at public procurement, we are looking tariff charges’ and so on. They’re looking at them but they’re not doing anything about it.”

Her comments were echoed by fellow rep Martin Foster. He said, “It is absolutely disgraceful that the government has broken its promises to take action against Chinese steel dumping,” he said.

“It totally undermines what they have been saying it will do to support the steel industry. And this lack of support means that the government is not only turning its back on steel, it’s turning its back on manufacturing and the future prosperity of the wider UK economy.”

Up at Shotton in North Wales the news was met with “absolute astonishment.”

Unite’s Les Price said, “Sajid Javid has shown a savage and brutal disregard for our steel industry. This action represents his and the governments utter contempt for steelworkers in this country, their families and the communities they live in.

“His incomprehensible stance on blocking the EU from taking stronger action against the dumping of cheap Chinese imports will suffocate our industry and condemn our very existence. This decision must be challenged and Javid must be compelled to explain his decision in the public domain.”

Unite rep Darren Webster, a steelworker from Rotherham, says he has all but given up.

“To be honest, I didn’t expect anything different from the government,” he said. “Had the steel industry been a bank or part of financial services, then the Prime Minister would have taken action.

“It was obvious to me from the beginning that the government had no intention of helping us,” he added.  “It’s deeply disappointing that steel is going the way of mining and it didn’t have to be this way – the government was well within its power to help.”

Unite national officer Harish Patel slammed the government too for its persistent inaction while other countries have stepped in.

“When will the penny drop with government ministers that a strategically important part of the UK economy faces wipe out because of their continued failure to take decisive and swift action?” he demanded.

“It dropped years ago with countries like Germany and the USA who support their steel industry, but has so far failed to do so with minsters here in the UK.”