We are wrapping up for the day. Thank you for all your great comments, and we’ll be back tomorrow.
The Chinese president, Xi Jinping, has lauded the close ties between his country and Britain during a speech to the UK parliament. It is the first full day of his four-day state visit to Britain, aimed at boosting trade.
It is fair to say that China and the UK are increasingly interdependent and are becoming a community of shared interests.
I am already deeply impressed by the vitality of China-UK relations and the profound friendship between our peoples.”
Unsurprisingly, there was no mention of steel dumping.
About half of the 1.6bn tonnes of steel made globally comes from China, and firms operating in the UK simply can’t compete, says Guardian contributor Karl West. He writes:
The latest grim chapter in the long, slow death of Britain’s steel industry may have been decided in India, but it was scripted in Beijing.
Tata Steel, owned by the Indian conglomerate Tata Group, has been hammered by a toxic cocktail of high green taxes on emissions, a strong pound, slowing demand and cheap Chinese competition.
In the past 18 months, China has flooded the market with cheap, subsidised steel as its economic growth has slowed. Beijing wants to grab whatever foreign cash it can on global markets by selling its products at a knockdown rate.
As Caparo becomes latest victim of crisis, pressure is on the business secretary and chancellor after last week’s emergency steel summit
Gareth Stace, director of the industry body UK Steel, said: “Chinese steelmakers are fully subsidised by the Chinese government and their regions.”
You can read the full story here.
Hammond: UK can't build wall around steel industry
Just to recap, the UK’s foreign secretary, Philip Hammond, has indicated that the government won’t press the Chinese president, Xi Jinping, too hard on the “dumping” of steel.
Hammond told the Today programme on BBC Radio 4:
We have got to get the balance right: trying to protect our steel industry in a sensible way, which we are doing, but recognising that we are operating in a global economy. We can’t simply build a wall around the UK.”
You can read the full story here.
Updated
Govt to China: “Invest in UK. It’ll make you money” Govt to itself: “Don’t invest in UK. Cut, add more austerity, let steel industry die"
— David Schneider (@davidschneider) October 20, 2015
Management at Tata's Scunthorpe steel mill eyeing buyout - sources
Guardian contributor Karl West has sent us this:
The management team at Tata Steel’s Scunthorpe steel mill are eyeing a buyout of the loss-making plant, according to sources.
The Indian conglomerate that owns the rump of the former British Steel has been trying to offload its Scunthorpe-based long products division since a sale to Gary Klesch, the billionaire industrialist and owner of the Klesch Group of companies, fell through in August.
Tata yesterday confirmed it is cutting 1,200 jobs in the division, including 900 at Scunthorpe. The business has been hammered by cheap Chinese competition, making it uneconomical to produce steel for the rail and construction sectors in Britain.
Fears are growing for the future of the North Lincolnshire plant. One source reckons Tata want to close the site and focus its resources on its sister operation in Port Talbot.
The source said: “The market will not change. I think they [Tata] are discussing various things to see if other people buy it [Scunthorpe]. At least they are giving it a try.”
He said Tata is not currently in talks with any potential buyers, but noted it has discussed the possibility of a management buyout by the team currently in charge of the Scunthorpe steel mill.
“They might be talking about a management buyout. But who is going to fund them [management] when the prognosis is so bad?”
Tata could not be reached to comment.
Outside Dalzell steel works in Motherwell https://t.co/QaQmVpEVd2
— Libby Brooks (@libby_brooks) October 20, 2015
More from Libby Brooks, who has been speaking to Tata workers in Motherwell:
John McKenna, who worked at Ravenscraig before joining Dalzell eight years ago, said that he was ‘disappointed’ at the news. “I’m disappointed they’ve decided to treat us this way. I think there’s definitely a future if someone is in their right mind to take this on. There’s a good workforce here. There’s a future is the government wants to make it that way.”
Andrew Crawford, who had worked at the plant for 26 years since the age of 20, said that he was “devastated”.
“My dad worked there. I’ve had friends just retire and there are young kids in there with families.”
“They are good as said it was the end the steel industry in Scotland this morning. The way they spoke about the Chinese imports, that’s how it was explained to us.”
One worker hurrying away from the works summed up the mood of the workforce thus: “Scunnered”.
"Britain shouldn't shut its door on manufacturing" - Tata executive
Another Tata executive has been speaking. After talking to workers in Scunthorpe, Bimlendra Jha, executive chairman of the Long Products Europe business, said (quotes from PA):
“These are very distressing times.
“It is not just a question of Tata Steel. It’s a question of manufacturing industry in Britain.
“It is a fight very clearly for the future of manufacturing industry in Britain.
“We have to act in unison to put up a fight together.”
“In the cradle of the Industrial Revolution, I don’t want Britain to be the first country to shut its door on manufacturing.”
Updated
"Difficult to find a buyer for Motherwell plant" - Tata director
Tor Farquhar, human resources director for Tata Steel Europe, has been taking questions outside the Motherwell plant.
He says that this is a very difficult day for the company and workers: “This is the worst news you can ever give your employees.”
Asked whether he wanted to see more government intervention to counter the flooding of the market, in particular with Chinese steel, he replied:
“This is a global issue. At a European level we have been fighting hard to have a level playing field so we don’t have subsidised steel entering the market. If I had one criticism it is that Europe has been quite slow to stop subsidised steel while the US has been much quicker.”
Referring to the steel task force set up by the Scottish government, he said: “This is not an issue that the UK or the Scottish government on their own can address. The truth is that global oversupply puts plants like this at risk.”
He suggested that finding a buyer for the works in the current climate would be extremely difficult.
Farquhar also said that the UK and Chinese industries needed to find a balance: “The UK has and needs to maintain a manufacturing base alongside and complimentary to China. We believe there is a future for UK steel and a future in sales to China. This is not China versus the UK.”
However, he said that he believed the steel works behind him had no future. “We’ve worked very hard for a long time to find a sustainable future for the plate base. It’s a very difficult decision and one we fought against but the global macro economic picture means we can’t find a viable way of production.”
Updated
Local Labour MSP John Pentland has also called on the Scottish government to act, writes Libby Brooks: “The Scottish Government can intervene and support strategic assets when they are threatened, as it has shown several times. It acted when Prestwick was threatened; it acted when Fergusons was threatened; it acted when Grangemouth was threatened; and it can act again, to save our steel industry.”
Pentland also said that it was “shocking” that the new Forth crossing project was being built with overseas steel, including steel manufactured in China.
Despite Sajid Javid’s repeated proclamations that prime minister David Cameron will raise the issue of steel dumping with Chinese president Xi Jinping, there seems some doubt as to how strong the protests will be. Our political correstpondent Rowena Mason writes:
David Cameron’s spokesman will not reveal how strongly he is prepared to object to China’s steel-dumping in his meetings with Xi. She would only say he will “raise” the matter and discuss how the actions of one country can impact on another. There is little sense that he plans to complain forcefully about China’s behaviour.
More in our live blog on the Chinese visit.
Lib Dem Greg Mulholland: all concentration on Chinese visit is on banking, will issue of steel be raised
Javid: there will be an announcement of £20bn of business deals with China which I;m sure he will welcome.
And with that, Parliament turns to other issues.
Labour Ian Lucas: how big should industry be for strategic reasons, how retain capacity
Javid: we’ve seen a steady decline in capacity, need to supply more stability so they can plan for future.
Labour Phil Wilson: problems with supply chain, how than they be helped
Javid: number of good suggestions from summit. Will be working with industries using steel to see how can hard wire requirement for British steel in their products.
Labour Angela Smith: inexcusable minister won’t commit to a long term strategy for industry, for steel
Javid: Steel summit on Friday did discuss strategy. Since then, already set up metal strategy which steel is a major part.
SNP Margaret Ferrier: Must do everything we can for the workers. Welcome action by Scottish government to set up taskforce. But what will UK government do, about dumping, high energy costs?
Javid: We will support Scottish task force. Must do all we can for workers and families.
Labour Tristram Hunt: China needs to know, we are more than just a theme park. What talks is he having, when will he stand up for Britain
Javid: there will be further announcements which will help sustain jobs. Prime minister will discuss whole issue of unfair trade.
Conservative Jeremy Lefroy: Steel is vital national industry. No point in buying cheap steel which will have problems later
Javid: right to raise this point. We will be looking very closely at this.
Labour Tom Blenkinsop: EU partners have taken action against Chinese dumping.
Javid: For first time ever, a British government supported duties by EU and will take further action when evidence is there.
Conservative Peter Bone: let us put in place what we think is right and worry about what EU thinks afterwards.
Javid: Understand point, but rules on unfair state aid etc exist to protect British manufacturers as well. Need to have clean hands if we complain about others violating rules.
DUP Sammy Wilson: Problem partly also green energy policies which have pushed up costs.
Javid: right to raise this issue, energy costs are high, some of them are imposed directly some through EU policies. Are paying compensation, want to pay more, so want EU approval as soon as possible.
Labour Andy McDonald: has he pursuing anti dumping initiative
Javid: we have started taking action, voted at EU, it is an EU led process, we have provided evidence where he have it.
Conservative Stephen Hammond: how to make dumping not endemic?
Javid: we have been taking action, voted for it, will be pushing for action to be taken more quickly.
Labour Stephen Doughty: Why does secretary not go over to Brussels and sort out state aid?
Javid: Not in full control of UK government. It is a priority, and it is too slow. We are doing everything we can.
Conservative Martin Vickers: could we have more detail about the task force in Lincolnshire.
Javid: Task force just been set up. We need to listen to task force and local leaders. First meeting will take place tomorrow.
Updated
Labour’s Nick Dakin said action must be taken now.
Javid said some of the actions require working with our EU partners, working as quickly as possible.
Javid:
It’s a shame he [Brennan] wants to play politics.
We will do all we can, support package for Redcar. Task force in Scunthorpe, will listen to what more we can do.
Clearly China is one of the main countries in terms of overcapacity. But wider than just China, Brazil is in recession. It needs an EU wide solution.
Updated
Brennan:
Despite the rhetoric the government seems content to let the industry disappear in the face of Chinese dumping.
Will he implement the actions the industry is calling for?
Brennan accuses the secretary of state of spinning, the £80m package was only said to be £50m just last week.
Updated
Javid is ticked off by by the speaker for exceeding his allotted time.
Business secretary Sajid Javid said the industry was facing unprecedented challenges, and the situation was devastating.
The situation is difficult and deeply worrying for workers. The government is doing and will continue to do everything in its power to support you in the weeks and months to come.
We will not abandon you now in your greatest time of need.
There is no straighforward solution.
The goverment has given an £80m package to people who lost their jobs at SSI.
We will do all we can to soften the blow. We will set up a taskforce.
Taking steps to assure there is a future for the British steel industry in difficult markets
But excess capacity is enormous, 570m tonnes last year.
The price of steel has halved. In the three years since SSI restarted the plant, it lost £600m.
There are limits to what the government can do.
We can’t change the price of steel, dictate exchange rates, disregard international regulations.
On Friday I hosted a top level summit, created a framework for action to suppor steelworks.
We will drive up the number of public procument contracts won by UK steelmakers.
UK steel should play a central role.
Secondly we will see what lessons we can learn from other countries in the EU and beyond.
Also what the government can do to boost productions, reduce costs, including energy. training. A review of business rates is underway.
On top of £50m paid out to energy intensive users.
But the process for further support [for energy users] needs EU approval which is taking longer than we would like.
I will meet the European Commission next week to discuss unfair trade.
Updated
Business secretary Sajid Javid faces parliamentary question
And now the urgent parliamentary question in Parliament from Kevin Brennan, shadow minister for trade and investment. Brennan said:
Will the business secretary make a statement about what action government taking to secure future of steel industry?
Updated
Describing the announcement as a crushing blow for the workforce, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary welcomed the decision to mothball the plants, and said that it was essential that the UK and Scottish Governments responded quickly to the crisis.
“The UK Government must work with the industry to prevent the unfair dumping of Chinese steel on the UK market and provide a package of support similar to those routinely provided by other European nations to their energy intensive manufacturing sectors.
Smith, who became the first union leader to be invited to speak at the SNP’s conference in Aberdeen last weekend, added: “The Scottish Government must work with the Tata and the trade unions to provide a package of assistance to sustain jobs and the skills base whilst a strategy for the sector’s future development is agreed and implemented. Simply relying on the usual interventions to help find jobs for redundant workers will be unacceptable at this stage”.
Angela Eagle, shadow business secretary, said:
“This latest announcement from Tata Steel is devastating for the workers and their local communities.
“With each passing day there is a new blow to the industry which is now on its knees, however this Government is only prepared to offer warm words.
“Rather than setting up more talking shops the Government should be taking action including working with the European Commission and the Chinese government to relieve the pressure on the industry.
“We also need action from the Scottish Government. When Grangemouth, Fergusons and Prestwick Airport were at risk, the Scottish Government stepped in to provide support and to secure jobs. They need to do the same now - anything less will not be acceptable.”
Updated
Dalzell "only UK plant capable of processing steel for Trident"
UK Steel also points to the potential loss of vital national assets, including the ability to process the steel used in Trident submarines:
The Dalzell plant in Scotland has an array of processes which make it a very special facility which few, if any, in Europe can match.
It is the only plant in UK capable of rolling and processing the steel used in Trident submarines and the MoD special Armour plate.
If the plant is lost the UK faces the prospect of building the next Trident fleet using imported steel. It is also the only UK facility with the capability to supply the exotic specifications demanded by the offshore oil and gas industry for drilling platforms and oil and gas pipelines.
UK Steel, the trade association for the industry, has added to the calls for prime minister David Cameron to press the Chinese president on steel dumping during this week’s state visit. Director Gareth Stace said:
“Our fears about further job losses have now been confirmed. If we are to stem this tide then the Business Secretary must now deliver as a matter of urgency the commitments he made at last week’s summit, on energy costs, Business Rates costs and tackling unfair trade. In addition, we must also see a commitment from all parts of government at the highest level to ensure the sector’s survival in the UK.
“The Prime Minister can demonstrate that he is prepared to lead this commitment by stepping in this week and pressing the Chinese Premier about the dumping of under-priced steel which is one of the major factors killing our industry.”
Updated
"We've been trying to make government aware for over two years"
Here’s more detail from Libby Brooks in Motherwell on the comments from John Clark, Community rep for Dalzell.
He says that workers are still be briefed inside.
“Obviously it’s devastating for a community that has been here since 1872. It’s a particularly bad time for the guys in there coming up for Christmas. We’re seen Ravenscraig come and go and if you talk to anyone in the street in Motherwell town centre they have all got some involvement.”
Clark said that he “absolutely” believed that there was still a future for steel making in Motherwell and that the priority now was to find a buyer for the plant.
“Nicola Sturgeon has said that she will leave no stone unturned to help the industry and we are putting our faith in the Scottish government. We think this has still got a future and with investment we can still turn the corner.”
He also criticised David Cameron who is today meeting the Chinese president Xi Jinping. Tata blamed cheap Chinese imports in part for the job cuts.
“David Cameron is putting out the red carpet for the Chinese president. He be putting demands on the table instead.
“He must see that this has been an ongoing situation and we have been trying to make the UK government aware of the situation for over two years.”
"They just sat there in shock"
In Scunthorpe, the Community union’s McBean told PA: “If we all worked for nothing here we could not compete with the prices they’re (the Chinese) are dumping it on our shores for.
“Let us compete with the rest of the world.
“Give us a level playing field and these guys here will compete with the rest of the world. We just need some help.
“We have profitable parts of this business and we will keep going.”
Asked how his members took the news when they watched the web-cast, he said: “They just sat there in shock.”
Martin Foster, from Unite, said outside the plant: “Across Scunthorpe there’s three assets affected but the knock-on effect through the site is probably 800 to 900 people.”
He said: “It’s going to be devastating news for all them. I’ve just come from the plate mill. I’ve seen some of the guys down there. A lot of them were expecting something like this, they all know the plates business has been struggling, But, as I say that doesn’t soften the blow, even though you were expecting it. It still comes pretty hard.”
Updated
In Scunthorpe, workers also said they were devastated by the Tata announcement, even though the news did not exactly come as a surprise. PA reports:
Paul McBean, from the Community union, said: “They are just devastated and I’m devastated too. We knew it was coming but it doesn’t make it any easier.
“I’ve worked here for 40 years and I don’t know my future. It’s the same for a lot of people in there.”
Mr McBean said: “I just can’t believe the numbers involved. I’m still in shock, to be honest, even though the rumours were leaked.”
One man leaving by car said to reporters: “I’m bothered about myself, of course, but it’s my sons, both of my sons work here. It’s their future.
“But you’ve just got to keep your chin up and keep going.”
Staff leaving the works said they would not know who would be affected until after the 90-day consultation period was over.
One said: “We’ll try and enjoy Christmas and see what happens in January.”
They said they were told the news by video conference in a series of meetings.
Workers "devastated" by Tata job cuts
Union representatives at Motherwell described the job cuts as devastating, says Libby Brooks:
John Clark, Community rep: this is devastating for workers, we are placing our faith in the Scottish government pic.twitter.com/EpFlXLmBz3
— Libby Brooks (@libby_brooks) October 20, 2015
Dalzell union rep: I absolutely think there is a future for steel making in Motherwell
— Libby Brooks (@libby_brooks) October 20, 2015
Dalzell Union rep attacks David Cameron: he's putting the red carpet out for the Chinese president, but he should be making demands
— Libby Brooks (@libby_brooks) October 20, 2015
Updated
Here’s the response to the Tata news from the Unite union, courtesy PA:
Unite assistant general secretary Tony Burke said: “This is a dark day for the UK steel industry, for the workers and the communities who livelihoods depend on steel. We will be working closely with Tata to find alternatives and to save as many jobs as possible.
“The knock on effects of today’s news combined with Caparo and the closure of Redcar through the supply chain will be devastating. Trade unions, the industry and business groups are all united on the need for the UK Government to support the steel industry.
“Sajid Javid (Business Secretary) is becoming increasingly isolated by his failure to act swiftly to support the steel industry. He and the UK Government know what needs to be done and they need to do it quickly. A failure to act and tackle the dumping of cheap Chinese steel will spell the end of steel in the UK.”
Unite’s Scottish secretary Pat Rafferty added: “Today’s news effectively brings an end to a proud tradition of steelmaking in Scotland. The impact on the Scottish economy which is also being hammered by job losses in North Sea oil will be severe unless there is urgent support.
“We will be pressing the Scottish Government to live up to its promise to do everything it can to support the steel industry in Scotland and save jobs. The UK Government should take note of the Scottish Government’s more proactive response and act to save our steel across the UK.”
Updated
PA is reporting comments from Paul Kenny, general secretary of the GMB.
He said: “Only the UK Government acting with the EU can deal with dumping of steel and green taxes on energy prices. There has been no action.
“Look at the dismal record:
:: 16th July Tata Steel announce 720 jobs losses in Rotherham, Stocksbridge and Wednesbury. No action from Government.
:: 25th August Tata announce 250 redundancies in strip steel at Llanwern. No action from Government.
:: 18th September 2015 SSI announce 2,200 jobs at Redcar under threat. No action from Government.
:: 19th October steel firm Caparo in administration. No action from Government.
:: 20 October Tata announce 1,200 jobs to go in Scunthorpe and Lanarkshire. No action from Government.
“Parliament has to insist on immediate action on steel.”
I have been granted an Urgent Question in Commons on what action the Government is taking to secure the future of the Steel Industry?
— Kevin Brennan (@KevinBrennanMP) October 20, 2015
Speaker has granted Labour urgent question in Commons on steel to Bis Secretary at lunchtime
— Laura Kuenssberg (@bbclaurak) October 20, 2015
Urgent Question in House of Commons on the future of the British steel industry granted to @UKLabour at 12.30pm.
— PoliticsHome (@politicshome) October 20, 2015
Updated
More from Libby Brooks in Scotland on the steel crisis:
Dalzell Steel and Iron Works opened in Motherwell in 1872 and by the first World War had become the largest steel works in Scotland, providing plates for the thriving ship-building industry on the River Clyde.
Once the steel production capital of Scotland, Motherwell was nicknamed Steelopolis and its skyline was once dominated by the gas holder and three cooling towers of the Ravenscraig steel plant. But the closure of Ravenscraig in 1992 signalled the end of large scale steel making in Scotland.
John Pentland, Labour MSP for Motherwell and Wishaw called on the SNP to take decisive action to save the industry: “Steel-making is just as iconic as Irn Bru to Scotland. If you allow the steel industry to die you are putting all those skilled people on the scrapheap.”
“The people here are still recovering from the closure of Ravenscraig. It shattered this area and we are still picking up the pieces.”
Don't delay too long on rates - MPC member McCafferty
As Bank of England governor Mark Carney and deputy governor Andrew Bailey appear at a Treasury select committe, another member of the Bank’s monetary policy committee has been speaking on interest rates. Heather Stewart reports:
In a speech at Bloomberg this morning, Ian McCafferty, the one member of the Bank of England’s monetary policy committee who has voted for an immediate increase in interest rates at recent meetings, warns his colleagues not to delay tightening policy for too long.
“If we on the MPC are to achieve our ambition of raising rates only gradually, so as to minimise the disruption to households and businesses of a normalisation of policy after a long period in which interest rates have been at historic lows, we need to avoid getting ‘behind the curve’”
McCafferty has carried out some research about how easy it is for firms to borrow, and finds that it has become increasingly easy, relieving the credit crunch that followed the financial crisis, and removing one “headwind” to economic growth.
McCafferty says companies have been helped by a “thaw in conditions” for bank lending, alongside the arrival of new sources of finance, such as peer-to-peer lenders. “Together, these are bringing about a gradual normalisation of the corporate credit markets, such that this headwind, at least, may be starting to blow itself out”, he says.
Updated
Sturgeon will "fight for a future for our steel industry"
Here’s more detail from Libby:
A Tata Steel representative speaking outside the Motherwell plant confirmed that 270 jobs would be lost in Scotland, 225 from Dalzell and 45 from the Clydebridge works in Cambuslang.
First minister Nicola Sturgeon announced plans to visit both sites on Thursday, as the Scottish government confirmed plans for a steel task force to seek alternative buyers for the works and support those facing redundancy.
Sturgeon said: “This is a very anxious time for Tata Steel employees and their families and is deeply concerning for everyone involved.
“My government is determined to fight for a future for our steel industry.
“That is why I have established a Scottish Steel Task Force – to be chaired by my Business Minister, Fergus Ewing - that will bring together all the key representatives to work to keep the Dalzell and Clydebridge plants open.
“We will leave no stone unturned in our efforts to keep the plants open and support the 270 staff affected by today’s announcement.”
Updated
Our Scotland correpondent Libby Brooks is at Motherwell:
Tata steel rep outside Motherwell works confirms 270 jobs to go, 225 at Dalzell & 45 at Clydebridge ie all jobs gone, both sites mothballed
— Libby Brooks (@libby_brooks) October 20, 2015
First minister @NicolaSturgeon will visit both steel works this Thursday as Scottish gov't established steel task force
— Libby Brooks (@libby_brooks) October 20, 2015
Updated
Hmm...
The company said it would begin consultations with employees and their trade union representatives today. It added:
“Tata Steel’s subsidiary UK Steel Enterprise will look at how it can provide more support to the local communities affected by today’s announcement and help stimulate new job creation in those areas. Over the last four decades the company has helped to regenerate local economies with £88 million of support and created more than 75,000 new jobs across the UK.”
The full statement is here:
Restructure announced at Tata Steel’s Long Products Europe business
Tata said in response to the problems it face, it would be concentrating on “higher-value markets with a focus on developing stronger and lighter products for its customers.”
Bimlendra Jha, Executive Chairman of the stand-alone Long Products Europe business, said: “Today’s proposals mark the next step in reshaping our business to give it the best chance of survival in this fiercely-competitive global marketplace. We are looking closely at the performance of all parts of Long Products Europe as part of a focus on returning to profitability.”
Tata blames China, strong pound and power costs for job cuts
Tata said the cut came “in response to a shift in market conditions caused by a flood of cheap imports, particularly from China, a strong pound and high electricity costs.”
It said plate mills in Scunthorpe, Dalzell and Clydebridge would be mothballed while one of the two coke ovens at the Scunthorpe steelworks would be closed.
Karl Koehler, chief executive of Tata Steel’s European operations, said: “I realise how distressing this news will be for all those affected. We have looked at all other options before proposing these changes.
“We will work closely with affected employees and their trade union representatives. We will look to redeploy employees, wherever possible, and minimise employee hardship.
“The UK steel industry is struggling for survival in the face of extremely challenging market conditions. This industry has a crucial role to play in rebalancing the UK economy, but we need a fairer system to encourage growth. The European Commission needs to do much more to deal with unfairly traded imports – inaction threatens the future of the entire European steel industry.”
Tata confirms 1,200 steel jobs to go
BREAKING NEWS:
Tata Steel has confrmed that nearly 1,200 jobs will go in Scunthorpe and Scotland, the company said.
It said 900 jobs will go at Scunthorpe and 270 in Scotland, “as well as a small number at other Long Products Europe sites.” The Long Products division will stop production of steel plate.
Updated
Staff at Tata Steel in Motherwell have started to gather for a meeting at the plant. Announcement expected soon.
— David Cowan (@stvdavidc) October 20, 2015
Tata steel workers still waiting to hear if jobs are safe. Webcast with company bosses happening right now. pic.twitter.com/uQPgcTPhaT
— Ciaran Jenkins (@C4Ciaran) October 20, 2015
David Fagan of North Lanarkshire Council, told BBC Scotland:
We do need to at least ask Tata to slow down the process, work in partnership with all of the agencies that might be able to support this and look at any options that are there.
If that’s not successful, North Lanarkshire Council will work along with key agencies including local colleges, the NHS, to provide support for workers moving into other forms of employment and we’ve a good track record in doing that.
Workers at Tata’s steel plants in Scunthorpe and Scotland are expected to hear their fates shortly.
If Indian-owned Tata cuts its plants at Dalzell in Motherwell and Clydebridge in Cambuslang, that would effectively end 143 years of steelmaking in Scotland.
Eurozone bank lending continued at a steady pace in the third quarter, according to the latest survey from the European Central Bank.
Demand for mortgages remained high with a net 33% of eurozone banks reporting increased demand, albeit this was down from the record 49% in the second quarter.
Demand for business loans was a modest 16%, not much better than the 13% seen in the previous three months. Teunis Brosens at ING Bank said:
Especially disappointing is the fact that there is no sign of an investment pickup: The net percentage of banks reporting higher loan demand due to increasing investment activity was little changed at 11%. Indeed, net lending growth to non-financial businesses amounted to only 0.4% year on year in August. The survey results suggest we need not expect a strong pickup in September or beyond, for that matter.
While the ECB claims that QE continues to support bank lending, the low rate-effect appears to be wearing off. The availability of low rates has become less important for households: a net 35% of banks report low rates as reason for households to take out (or refinance) a mortgage, down from 45% in the second quarter. For business clients, a net 19% of banks reported low rates as a motivating factor to borrow, down from 21% in the second quarter.
All in all, today’s Bank Lending Survey gives us “more of the same”: the credit recovery is continuing, showing that the eurozone recovery is keeping pace. But is that good enough? We would really have liked to see an acceleration of business lending as a signal of business confidence translating into higher investment activity. More verbal sabre rattling by ECB-president Draghi on Thursday is likely, but will it convince Eurozone businesses to start investing?
Updated
China of course is very much bound up in the current steel crisis in the UK, accused of dumping cheap steel on the market.
So it is timely that Chinese president Xi Jinping is visiting the UK at the moment, with David Cameron and foreign secretary Philip Hammond both saying the issue of steel production will be raised.
We are live blogging the president’s visit here:
Here’s a graphic which shows one of the problems facing the steel industry:
Other MPs are wading into the steel crisis.
Scunthorpe Labour MP Nic Dakin told Radio 5 Live:
Nobody’s asking for subsidies here. What they’re asking for is a level playing field. A level playing field on business rates, a level playing field on energy taxes compared with our european neighbours.
John Pentland, Labour MSP for Motherwell and Wishaw said:
It’s going to be very, very devastating. There is no way that we should be thrown on the scrap heap. These are well experienced, skilled workers. These people should be retained.
There could very well be intervention from the Scottish government.
Meanwhile Labour’s Chuka Umunna has taken the opportunity to attack the Conservative government:
The Government's handling of the steel industry crisis is a lesson in industrial inactivism - a complete lack of commitment. Disgraceful
— Chuka Umunna (@ChukaUmunna) October 20, 2015
Either you want to nurture and grow our manufacturing base or not - the Govt's handling of the steel crisis shows they aren't interested
— Chuka Umunna (@ChukaUmunna) October 20, 2015
Steel dumping will be raised with Chinese - Hammond
Foreign secretary Philip Hammond told Sky News that the issue of steel dumping will be raised with Chinese president Xi Jinping during his UK visit. Hammond said:
It’s certainly one of the subjects that will be on the agenda, the steel industry. China is a very big producer of steel, as you would expect.
But there’s a global over-capacity in the steel industry and that’s caused prices to fall very precipitately over the last 12 months or so, and that’s causing a problem around the world.
The EU has imposed tariffs on Chinese steel to ensure that the price of Chinese steel reaching consumers here is fair, but there is a problem in this industry.
European markets edge higher
Shares are struggling to make much ground in early trading.
The FTSE 100 is up just 5.4 points, with commodity companies once more weighing on the index on worries about demand in China, the world’s second biggest economy.
But InterContinental Hotels is higher after the company reported a 4.8% rise in revenue per available room - a key industry measure - for the third quarter. Investors had been nervous about growth in China, but the company said it was confident in its outlook for the year.
Shares in Premier Inn and Costa Coffee group Whitbread have climbed 2% after the company said first half pretax profit rose 13.8%.
But Asos is down 2% after full year profits for the online fashion group rose just 1% and despite a confident outlook statement. The shares have been a reasonably strong performer in the run-up to the results.
Elsewhere Germany’s Dax and France’s Cac are also marginally higher.
The UK needs a long term strategic plan for the steel industry, but the challenge for government is what it can realistically do, says economist Gerard Lyons.
1/ UK steel: been here many times before usually combination of factors public, private & international & need long term strategic thinking
— Gerard Lyons (@DrGerardLyons) October 20, 2015
https://twitter.com/DrGerardLyons/status/656365990968733696
2/Trouble is: good times economists grumble if government favours particular industry & in bad times (bank & steel) pressure is to intervene
— Gerard Lyons (@DrGerardLyons) October 20, 2015
3/ 1st issue is does government want to intervene & be aware of job losses if it doesn't & realistic of what it can achieve if it tries to
— Gerard Lyons (@DrGerardLyons) October 20, 2015
4/ if to intervene immediate issues are do we take China to WTO about anti dumping but this takes long time in Europe & may not achieve much
— Gerard Lyons (@DrGerardLyons) October 20, 2015
5/ or & again not easy, is to decide whether to intervene as China does with its steel industry - also sterling & energy costs too high
— Gerard Lyons (@DrGerardLyons) October 20, 2015
6/ these crises also expose structural issues e.g. - French firms have energy cheaper than ours - Germany steel more vertically integrated.
— Gerard Lyons (@DrGerardLyons) October 20, 2015
7/ also the cyclical strength of £ can't help (another reason not to hike rates as that transmission mechanism of strong £ not good)
— Gerard Lyons (@DrGerardLyons) October 20, 2015
8/ providing all the help possible given the strategic benefit of high quality steel & regional impact of these heavy job losses.
— Gerard Lyons (@DrGerardLyons) October 20, 2015
9/ Ministers said right things via expressing concern about steel job losses - their challenge is what realistically they can effectively do
— Gerard Lyons (@DrGerardLyons) October 20, 2015
Caparo administrators already seeing interest in the business
A more positive sign for Caparo Industries, which went into adminstration on Monday.
PwC, the administrators of the business, said they had already received several expressions of interest.
Matthew Hammond of PwC told BBC Radio 5 Live that the approaches had come from the UK so far, with interest in buying all of the business as well as individual parts.
Hammond said staff would continue to be paid. He believes PwC will need two weeks to fully assess the situation, while the whole administration process should take a couple of months.
Here’s the Bloomberg story on the problems at China’s Sinosteel:
A Chinese state-owned steel trader is set to default on a bond payment even after the government was said to have stepped in to help, highlighting worsening corporate finances as an economic slowdown deepens.
Sinosteel Co. will delay an interest payment due Tuesday on 2 billion yuan ($314.5 million) of 5.3 percent notes that mature in 2017, according to a statement on Chinabond’s website Monday. The firm delayed payment as it plans to back the securities with stock of its unit Sinosteel Engineering & Technology Co., and that may affect issues related to interest payment, it said without elaborating. The failure to pay interest on time constitutes a default, according to Industrial Securities Co., Haitong Securities Co. and China Merchants Securities Co.
“Investors have fully expected Sinosteel’s default,” said Sun Binbin, a bond analyst at China Merchants Securities. “It’s possible it will pay the interest later, which would be better than the market expectation.”
More Chinese firms are struggling to repay obligations, and government-backed companies aren’t immune, as defaults this year had already included two state-owned enterprises, according to China International Capital Corp. The National Development and Reform Commission planned to meet Sinosteel investors, people familiar with the matter said last week. The yuan’s fall, a stock rout and speculation that bubbles are forming in the debt market have fanned concern.
More here.
Meanwhile in Germany, producer prices fell 0.4% in September compared to the previous month, a bigger decline than the 0.1% expected by economists. The year on year fall was 2.1%, again higher than the forecst 1.8%.
Stock markets are expected to open virtually unchanged as investors weigh up the problems with the Chinese economy, and look ahead to this week’s meeting of the European Central Bank:
Our European opening calls: $FTSE 6348 down 5 $DAX 10153 down 12 $CAC 4700 down 4 $IBEX 10199 down 8 $MIB 22413 down 6
— IGSquawk (@IGSquawk) October 20, 2015
One in six UK steelworkers under threat
Tallying up the potential job losses in the steel industry in just this month - 2,200 at Redcar, 1,700 at Caparo Industries and now 1,200 at Tata - means that of a total UK workforce of 30,000, one in six workers face the axe.
Here is our analysis of the problems facing the industry:
More UK steel jobs to go
Good morning and welcome to our our rolling coverage of the world economy, the financial markets, the eurozone and the business world.
It will be another grim day for the UK steel industry - what’s left of it - with Tata expected to announce up to 1,200 job losses in Scunthorpe and Scotland.
Workers are due to be told their fate at 10 o’clock (BST) this morning, with an official statement an hour later.
The move follows Monday’s news that steel products group Caparo Industries had gone into administration and the recent liquidation of the Thai owned Redcar steelworks on Teesside with the loss of 2,200 jobs.
Here’s our latest story:
One of the reasons for the crisis in UK steel is the dumping of cheap imports from China. UK prime minister David Cameron has promised to raise the issue during the four day visit by Chinese president Xi Jinping.
Selling cheap steel has also caused problems for Chinese companies. Michael Hewson at CMC Markets said:
While the weakness of commodity prices has its upsides, in the form of low inflation, we are now starting to see the downsides with job losses across the board in global manufacturing, not only in the UK, but in the US as well, while China has bailed out one of its own state owned commodity miners, in the form of Sinosteel, which has been haemorrhaging cash hand over fist, as it sells steel below market prices.
Deutsche Bank’s Jim Reid said:
The story on the Chinese SOE Sinosteel... is gathering steam with a Bloomberg article noting moments ago that the company delayed an interest payment on its Yuan dominated bonds due today. The same story suggests that the Chinese regulator and State Council are working with all related parties in order to try to prevent a default. Certainly a noteworthy story testing China’s commitment to allowing market reform.
With the UK government reluctant to bail out the industry, perhaps China’s perceived willingness to act could be something else for Cameron and Xi Jinping to discuss.
Elsewhere today we have results from Asos, InterContinental Hotels and Whitbread, while Bank of England governor is up before the Treasury Select Committee this morning.
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