Wednesday, January 6, 2016

News: Government update on UK steel industry

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As the Sheffield city region submits a plan to secure a £9m package to help soften the blow of large scale redundancies at Tata Steel, the Government has provided an update on its response to the UK steel crisis and the longer-term future of the industry.

Tata Steel has for a long time been warning that continuing cheap imports risk undermining Europe's steel industry and that uncompetitive energy costs and the strength of sterling are hurting its UK operations. 720 jobs that are at risk - including 500 in Rotherham - as Tata Steel works through proposals to restructure its speciality and bar business. 1,000's of jobs are under threat in Scunthorpe and Scotland.

A recent report from the the Business, Innovation and Skills (BIS) Committee concluded that the Government was not alert enough to the warning bells sounded by UK steel industry.

In October, Rotherham hosted a top-level summit to discuss the challenges currently facing the global steel industry attended by steel companies, MPs, unions and trade bodies. A number of "asks" of the Government were laid out by steel unions which include: action on business rates; a compensation scheme for high-energy users; a commitment to favouring British steel in procurement; and work with the EU on anti-dumping measures to protect British steel from cheap subsidised imports.

Working groups have been meeting to look at the key issues.

Existing EU state aid rules are being examined and in December it was confirmed that energy intensive industries (EIIs), such as UK steel, have been granted state aid compensation for the cost of renewables. Compensation can now be paid for the costs of renewables policy in their bills.

Karl Koehler, chief executive of Tata Steel's European operations, said: "This is welcome news. The hit that the UK steel sector has taken from taxes on electricity prices in terms of competitiveness is something we have been campaigning on for many years. It's good to now see the Government taking action.

"Although the announcement is a positive development, the European steel market remains under intense pressure from factors such as unfairly traded Chinese imports. We must all continue to do our utmost to combat these conditions."

Anti-dumping continues to be raised at the EU level and support is being provided to ongoing investigations. On Government procurement, new guidelines have been issued that take into account wider socio/economic impacts and the Government is mapping out the demand for UK steel in projects such as HS2, new nuclear and offshore wind.

Groups have also been discussing the industry's exemption from policy costs of the Renewable Obligation and Feed-in Tariffs, the impact of business rates and steel innovation.

A joint action plan to support the Sheffield city region in the wake of the proposed restructuring at Tata Steel is aiming to secure £9m. The Government is being asked to contribute £4m. UK Steel Enterprise, part of Tata Steel, has pledged £1.55m to support job creation, and £3-4m will come from the Sheffield City Region Local Enterprise Partnership (LEP).

Rotherham MPs met with Anna Soubry, Minister for Small Business, Industry and Enterprise, to put forward the case fro support. After the December meeting, John Healey MP, whose constituency includes Tata's Aldwarke plant, said: "The minister said the government will help but that South Yorkshire has got to make the case.

"This is a significant step forward, as there's been no commitment before on extra funds for our area and Rotherham has been the forgotten town in the current UK steel crisis.

"She recognised our argument that the government had stepped up to assist Scunthorpe, and that we are looking for a similar scale of support in Rotherham and South Yorkshire.

"She also promised to visit the Rotherham steel works and made a commitment to turn around any bid for funding in days.

"As soon as the bid goes in, I and the other MPs will lean on ministers to make sure they stick to their word."

Tata Steel website

Images: Tata Steel

1 comments:

Anonymous,  January 6, 2016 at 5:11 PM  

Please make sure the funding is available
People have all ready enquired about this and been told they will receive no help if the training course they wish to pursue is longer than
2 weeks
If this is true the offer of funding
Is a joke
People cannot retrain in a new profession which will support there families in 2 weeks

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