The business secretary will face calls for urgent action to help UK steel when he meets industry executives on Wednesday amid what unions say is an ongoing “crisis”.
The industry will press Greg Clark for action to reduce energy and tax costs, tackle unfair competition, and use public procurement to help support the sector, which was thrown into turmoil this year when Tata Steel announced it would sell its UK business after years of losses.
On Monday, Tata Group said it had replaced chairman Cyrus Mistry amid growing investor concern about the uninspiring financial performance of India’s salt-to-steel conglomerate.
Tata was persuaded to reconsider its UK steel sale and is in talks with German rival ThyssenKrupp about a merger of their European interests.
Standing in the way of any deal is a legacy £15bn pension fund that Tata — and the scheme’s trustees — want to detach from the business to boost its chances of survival.
There are growing concerns in Wales about the future of the company’s flagship Port Talbot steelworks.
UK unions say their European counterparts have been given promises that there will be no job losses in Germany or the Netherlands, where Tata has a large steel plant, if the deal goes ahead — but in Britain there has been no such guarantee.
In particular, they worry about the overlap between Tata and ThyssenKrupp for products such as electrical steels and packaging.
Tony Brady, of the Unite union, said the UK government had offered “kind words” but not enough support for Tata. “We are still very much in crisis … [what] we need now is action.” Without further support, the situation would remain “dire”, he told the Welsh assembly last week.
Robin Edwards, of the Community union, said that falls in the value of sterling since the Brexit vote on June 23 had helped Port Talbot move into profit and that the merger of Tata and ThyssenKrupp had the potential to create an industrial powerhouse.
But Jeff Beck, of the GMB union, said many contractors had lost their jobs because Tata had taken work back in-house at Port Talbot. Workers at the plant had been affected by the uncertainty about its future, he said, not least because of the Brexit vote.
“Some of the lads, if they apply for mortgages they’ve been turned down because of the uncertainty,” he said.
The government said it was working with industry to secure its future.
“A great deal of work has been done to support the steel industry including tackling the dumping of cheap imports into the EU and buying British.
“The recent reopening of the plate mills in Scotland and the British Steel site at Scunthorpe, which has since hired more people, shows the sector can remain competitive with the right investment.”
Mr Clark has talked about a new industrial strategy for the UK — and his department has been renamed the Department for Business, Energy and Industrial Strategy — but it is not yet clear what this involves.
Adam Price, finance spokesman for Plaid Cymru, the national party of Wales, said the ThyssenKrupp merger was a “significant threat” to the Port Talbot workforce.
Source:Ft.Com