More jobs are to go at Tata Steel in the UK and in terms of culprits, it’s the usual suspects – the flood of steel imports from China being a major factor, but also a strong pound, punitive business rates when compared to those in France and Germany and high energy costs.
Gareth Stace, director of UK Steel, has been quick to point out that the latest job losses are ‘a wake up call again to government’ and Alan Coombs, president of the Community union in Port Talbot – where an estimated 750 jobs will be lost – wants tariffs imposed on Chinese steel and lower business rates.
The latest round of job cuts – roughly 1,050 will go in total – follows hot on the heels of cuts made last year by Tata Steel. In October, the company announced that 1,200 jobs would be axed in Scunthorpe and Lanarkshire.
“These job losses are a real setback to the Welsh economy and it’s clear that firms in our steel industry face major global challenges to stay competitive," said Emma Watkins, director of CBI Wales.
“Chinese steel imports look to be having a big impact and it’s important that the European Commission urgently reports back on whether the market has been distorted unfairly by excess market supply," Watkins said.
According to Watkins, “Our industrial base can best be supported by developing a long-term industrial strategy, protecting research and development investment to help raise productivity and making energy costs more competitive."
Watkins said that the Welsh and UK governments must work together and alongside business to develop 'new and compelling' offers for inward investment and extra support.
The job cuts announced today have fired up the UK-based Leave.EU campaign. A spokesman for the organisation said, “In our view this is a predictable consequence of politicians’ failure to address the EU elephant in the room, with further job losses in Scotland and the north of England inevitable.”
"This latest round of job losses in Wales will set alarm bells ringing in Scotland and the north of England. Sadly, further losses are inevitable because the EU elephant in the room remains deliberately unaddressed, with the Welsh First Minister even going so far as to claim that the terrible problems faced by steel workers have 'nothing to do with' the EU last week".
Workers at Tata Steel’s Scunthorpe long products plant will avoid the latest round of cuts, thanks to a deal struck with Greybull Capital that has been ‘virtually sealed’ according to the Scunthorpe Telegraph. That said, 900 redundancies will go ahead at the plant despite a planned £400 million investment by Greybull.
Potentially, there is worse to come. In December this year a decision will be made as to whether China should be granted market economy status (MES). If the decision goes in favour of the Chinese, anti-dumping measures that currently safeguard hundreds of thousands of EU jobs against unfair competition from China across a range of strategic industries will become ineffective overnight.
China is placing political pressure on national and EU policymakers to prematurely grant MES, arguing that the WTO protocol assures its MES by the year-end. “However, the WTO protocol was established under the presumption that China would make sufficient progress towards becoming a market economy; progress that it has studiously failed to implement,” according to Axel Eggert, director-general of EUROFER, the European Steel Association.