Following the announcement earlier this week that Tata Steel will pull the plug on its UK operations – largely as a result of a flood of cheap Chinese steel imports coming into the UK – pressure is mounting on the British government to save the country’s ailing primary steel industry.
Yesterday Aberavon MP Stephen Kinnock accused the British government of being ‘asleep at the wheel’ and that the UK’s manufacturing and overall industrial strategy was being dictated by Beijing. “They are in hock to China,” he said, and was joined by EU officials who, it is claimed are ‘privately critical’ – according to The Times – of being reluctant to raise import tariffs for China in order to establish better trade links with the Chinese.
According to an article in today’s Times, a Tata Executive has accused the British prime minister, David Cameron, of ‘sleepwalking into the steel crisis by helping China to block EU efforts to increase tariffs on cheap exports’.
As the British steel industry was thrown into turmoil by the Indian steel giant’s decision to pull out of the UK, business secretary Sajid Javid was heavily criticised by opposition MPs for being in Australia with his 16-year daughter with whom he was planning a holiday after a five-day trade mission.
Labour MP Stephen Kinnock and Roy Rickhuss, general secretary of the Community union, which represents Tata UK steelworkers, travelled to Mumbai with a view to changing the Indians’ minds about closing down its UK operations.
Kinnock has since accused the government of doing nothing about the steel crisis despite knowing for some time about the 29 March ‘D-Day’ and the potential loss of 40,000 jobs. He said that Javid should have been in India, but chose the Australian trade mission instead.
Whether a buyer can be found for Tata UK is debatable. The company is rumoured to be losing £1 million per day and there is a pensions deficit of more than £2 billion.
Calls to nationalise the steelmaker’s pension scheme – to make the sale of Tata’s UK operations more attractive to potential buyers (should any exist) – have come from former business secretary Sir Vince Cable.
While the British chancellor has claimed to be taking action against cheap Chinese steel imports, he and David Cameron are said to be aiding China’s ambition of achieving ‘market economy status’, a move guaranteed to rankle the UK and global steel industry who vehemently believe that granting MES to China would open the floodgates to cheap Chinese steel and negate the effectiveness of any import tariffs.
The steel industry is adamant that China is not a market economy and, therefore, should not granted MES by the EU or anybody else. However, it is widely believed that on 11 December this year China will have market economy status bestowed upon it.