Summary: UK steel still deep in crisis
David Cameron is now flying to Washington for a world leader’s meeting on nuclear security, so there’s unlikely to be a major breakthrough in the steel crisis today.
And by the time Cameron gets there, more than 115,000 people will have signed the petition urging him to recall parliament.
So let’s quickly recap:
An emergency meeting at Downing Street to discuss the steel crisis has not yielded any obvious progress. After discussing the situation with ministers, the prime minister emerged to tell reporters that the UK faces “a difficult situation” with “no guarantee of success”.
Although Cameron said all options were open, he appeared to reject the idea of taking the steel industry into public hands. As he put it:
“We are not ruling anything out. I don’t believe nationalisation is the right answer, what we want to do is secure a long-term future for Port Talbot and for other steel plants in the UK.”
The opposition Labour party, which has proved more awake to the steel crisis than the government, criticised Cameron again today.
Shadow chancellor John McDonnell is pushing a four-part plan, which would begin with the temporary nationalisation of the industry to protect tens of thousands of jobs. McDonnell also wants the procurement rules shaken up, so that more British steel is used for infrastructure
Port Talbot’s MP, Stephen Kinnock, has accused the government of shambolic handling of the crisis. He’s also written for the Guardian about how Britain has actually blocked efforts to prevent Chinese steel dumping.
The Unite union is also pushing for the government to take the sector into public hands, warning that the whole of British industry will suffer if steel fails.
And business secretary Sajid Javid is yet to return to the UK from Australia, having ended his trip early on Wednesday. He’s hoping to be in Port Talbot on Friday.....
Updated
Jeremy Corbyn has criticised David Cameron for failing to achieve more at his emergency meeting on the steel crisis.
Rather than simply talking, the PM should be taking measures right now to stability the sector, argues the Labour leader (who scraped his own holiday yesterday to visit Port Talbot)
“The Prime Minister has offered no solutions today to the threat to our steel industry. His government is failing thousands of Tata steelworkers whose jobs are on the line.
It’s not good enough for David Cameron to stand by and say the situation is difficult. He should listen to over 100,000 people who’ve already signed the petition calling for parliament to be recalled to debate this crisis.
He must act now to protect the heart of manufacturing industry and take a public stake in steel.”
Kinnock: UK has been Beijing’s chief cheerleaders in Europe
Labour MP Stephen Kinnock has hit out at Brexit campaigners who blame Europe for the steel crisis.
Kinnock, whose constituency includes the Port Talbot steel works, says David Cameron is at fault for championing China’s interests, not those of British steel workers.
Writing for the Guardian, he says:
The reality is that the European commission has been trying to tackle the steel crisis for years now, but has consistently been hamstrung by a British government fighting tooth and nail to undermine those efforts.
The government is not only actively working against the commission’s attempts to toughen up its anti-dumping measures, where it has been the ringleader of a backroom campaign against trade defence reform, it is also lobbying hard for China to be granted market economy status (MES). MES would mean the World Trade Organisation would consider China to be a market economy, and we would therefore be unable to impose effective tariffs on dumped steel from the 80%-state-owned Chinese steel industry.
Ever since 2010 when the prime minister declared he would “make the case for China to get market economy status”, he and George Osborne have been Beijing’s chief cheerleaders in Europe. Cameron and Osborne know that the granting of MES would dramatically reduce the European commission’s ability to impose tariffs on dumped Chinese steel.
These are not party-political points. These are the views of the steel industry itself. It has repeatedly urged the government to act, and to stop promoting China’s cause in Europe.
Here’s the full piece:
A spokeswoman at the European Commission has said contacts with the British government on the future of Port Talbot were ongoing.
The commission is ready to give targeted advice to the sector and member states to make sure that state aid and EU funding possibilities are fully exploited and that any measures comply with EU law.”
“While the details of any possible measures are still under discussion in the UK, we are not in a position to provide further comment until the UK Government has taken a decision on the issue.”
Europe’s state aid rules could prevent the UK from funding a large rescue package.
Back in January, the Commission declared that member states cannot use taxpayers’ funds for “the rescue and restructuring of companies in difficulty in the steel sector”.
Javid not back in action until Friday
Business secretary Sajid Javid’s journey back from Australia is taking longer than hoped.
Westminster journalists are reporting that Javid will not be reporting for duty in the steel crisis until tomorrow.
Am told that Sajid Javid's epic journey to Australia and back will end in Port Talbot...some time tomorrow (Friday).
— Jim Pickard (@PickardJE) March 31, 2016
Sajid Javid is on a flight back to UK from Australia now, won’t be back in action until tomorrow
— Emily Ashton (@elashton) March 31, 2016
Javid had hoped to get back this afternoon, having cancelled his official trip to Australia around 24 hours ago.
Telegraph: Business secretary took daughter to Australia
The Daily Telegraph are reporting that business secretary Sajid Javid took his teenage daughter on his aborted trip to Australia.
They say:
The Telegraph has learned that he took his teenage daughter with him on the controversial trip and was planning to extend his visit by several days so he could go on a holiday with her. Mr Javid paid for his daughter’s flight himself.
A spokesman for Mr Javid said: “We can confirm that Mr Javid’s daughter accompanied him on his visit to Australia. There was no cost to the taxpayer.”
I’m pretty sure this wouldn’t breach any government rules. However, it could prove awkward for Javid as he tries to explains a) why he left the UK while Tata was making such a crucial decision, and b) why he didn’t return sooner.
Story which may explain Sajid Javid's delayed return from Australia https://t.co/C7KgSi94m4 by @Steven_Swinford and @Tom_Morgs
— Mark Hughes (@Hughes_Mark) March 31, 2016
Updated
Shoutout to Port Talbot
We’ve love to hear from people who live in Port Talbot, and the surrounding area in South Wales, on how the crisis is affecting you:
Updated
Rating agency Moody’s has just declared that Tata will be a little financially stronger once it has shed its UK steelworks, but not enough to move its credit rating.
“Tata Steel Limited’s planned restructuring of its UK businesses is credit positive as it reduces some of the negative pressure on the company’s operating performance, however it won’t move Tata Steel’s Ba3 rating.”
Updated
With its massive steel industry, and slowing economy, China is at the heart of the crisis facing British steel.
So it’s worrying to hear one of China’s top producers warn that a new Ice Age is gripping the sector.
Angang Steel Co said that a ‘deep winter’ had arrived, after posting a net loss of almost 4.6bn yuan (or £500m) today.
“In 2015, China experienced a slowdown in economic growth and excess steel capacity, which caused the domestic and overseas steel industry to enter into an ‘Ice Age’”.
Bloomberg has more details: Steel Industry Facing `Ice Age,’ Top China Mill Warns
That slowdown in the Chinese economy has encouraged producers to ship excess steel overseas – particularly to countries like Britain where trade tariffs are low.
And more could be heading our way. China’s largest producer, Baosteel, has revealed it will boost output by 20% this year.
Sky’s Ed Conway has dug up a fascinating stat – China produced more steel in 2013 and 2014 than Britain has made ever.
In past 2rys China produced more steel than UK's entire cumulative steel output since 1870 https://t.co/iW3qSN4ghJ pic.twitter.com/mIbfPYckyh
— Ed Conway (@EdConwaySky) March 30, 2016
Steel has a vital part in the history of Sheffield.
And Professor Sir Keith Burnett, Vice-Chancellor of the University of Sheffield, argues that the UK government needs to give the industry proper protection.
Professor Burnett says:
“Steel is a core aspect of what we make and how we make it. It generates jobs, and it generates long term national security. Are you always going to buy your systems from elsewhere? No, you need steel.”
He also argues that industrial policy must embrace the “national purpose”, as well as competing with other countries.
“We’re interacting with countries like China that have a strong national purpose and we must maintain ours. Steel is a test for Europe. If you make competition the only touchstone then you let down your citizens and long-term economic stability.
More than 100,000 people have now signed the petition calling for MPs to be recalled from the Easter holiday to debate the steel crisis.
It was only set up yesterday, by Labour leader Jeremy Corbyn. Hitting 100,000 signatures means that parliament must now consider debating the petition.
There’s just one snag - MPs are currently on recess, so they can’t really consider it right now.....
That's excellent news. It can now be discussed by MPs when they return from Recess!!! Oh....... https://t.co/evaMXvMQTe
— Kulgan of Crydee (@KulganofCrydee) March 31, 2016
Updated
Chancellor George Osborne says he’s mentioned the steel crisis to other finance ministers, at today’s meeting in Paris.
In Paris for G20 talks on uncertainty in global economy. Discussing risks to monetary system - and I have also raised vital issue of steel
— George Osborne (@George_Osborne) March 31, 2016
The chancellor also welcomes today’s revised growth forecasts:
Britain still out in front - upgraded GDP growth of 0.6% in Q4 2015 shows economy finishing year with stronger growth
— George Osborne (@George_Osborne) March 31, 2016
But UK not immune to external risks & slowing global growth weighing on outlook shows now is not the time to put our security at risk
— George Osborne (@George_Osborne) March 31, 2016
David Cameron: no guarantee of success
The prime minister has also given a short statement to the media following the steel crisis meeting.
Looking rather grim-faced, David Cameron says:
The situation at Port Talbot is of deep concern. I know how important those jobs are - those jobs are vital to workers’ families, vital to those communities.
The government will do everything it can, working with the company, to try and secure the future of steel-making in Port Talbot and across our country. It’s a vital industry.
Q: Are you ruling out nationalisation in the long-term?
Cameron replies that the government is “not ruling anything out”, before immediately adding that “I won’t believe nationalisation is the right answer” (which hardly rules it in).
Q: In the short-term, are you going to push the European Union on tariffs, as it appears Britain has blocked tariffs that could have prevented steel dumping?
I have had “teams of ministers working for months to help this industry”, to ensure we procure steel for our ships and other vital industries, Cameron declares.
We’ve cut energy costs of British steel, and with others in Europe we have made sure there are proper penalties for those who dump steel.
But this industry is in difficulty right across the world. There’s been a collapse in prices, and massive over-capacity. We had been concerned Port Talbot could have closed outright, which is why we worked very hard with the company to ensure there will be a proper sales process.
But Cameron then warned:
This is a difficult situation. There’s no guarantee of success.
Q: Why has the government been behind the curve on this issue?
Cameron repeats his line about ‘teams of ministers’ working on the issue, which has ensured there will be a sales process rather than outright closure.
And the prime minister also argues that the steel crisis is a reason to remain in Europe, rather than leave.
It is “vital” that European markets are open to us, rather than UK steelmakers facing tariffs of their own.
And he concludes by warning that this is “a difficult situation. There can be no guarantee of success given the problems the steel industry faces worldwide”.
Updated
David Cameron is tweeting about the steel crisis, following today’s emergency meeting with ministers.
Today I have met with ministers to discuss the future of Port Talbot.
— David Cameron (@David_Cameron) March 31, 2016
Workers and their families face a worrying time, and our priority is to help those likely to be affected.
— David Cameron (@David_Cameron) March 31, 2016
During this process, we are committed to working with the Welsh gov't and Tata on a long term sustainable future for British steel making.
— David Cameron (@David_Cameron) March 31, 2016
Updated
Cameron: Nationalisation is not the right answer to steel crisis
Newsflash from Downing Street:
The Government is “doing everything it can” to resolve the steel crisis but nationalisation is not the right answer, David Cameron has said.
More on that shortly....
Sky: Liberty House interested in some Tata Steel assets
Metal processing company Liberty House have reportedly said they might be interested in some of Tata’s UK assets.
International steel and non-ferrous metals group Liberty House says it is interested in buying some of the #Tata steel business
— Sky News Newsdesk (@SkyNewsBreak) March 31, 2016
According to Sky News, Liberty sees some value in Tata’s ‘rolling’ operations – which recycle steel.
However, Liberty is apparently not interested in Tata’s blast furnaces (at Port Talbot and Scunthorpe), in the current economic climate.
Newsflash: Britain’s economy grew faster than previously thought in the last quarter of 2015.
UK GDP rose by 0.6% in October-December, according to the Office for National Statistics, not 0.5% as earlier estimated.
The dominant service sector led the way, with growth of 0.8%. Industrial production shrank by 0.4%, with manufacturers only managing to expand by 0.1%.
Labour's John McDonnell: Four-point plan to save steel
Labour’s shadow chancellor, John McDonnell, has been outlining a four-point plan to save the UK steel industry.
This plan has “emerged from discussions within the industry”, if an immediate buyer can’t be found. And it includes taking the steel industry under public ownership.
Here’s the details:
- Nationalise, to stabilise the steel industry.
- Back the recovery plan put forward by the workforce
- Look to see what government assistance can be provided. This month’s Budget failed to include any support on business rates, which are five-to-seven times higher in the UK.
- Look at public procurement [to buy more British steel for state infrastructure projects.
McDonnell tells Sky News:
On that four-point plan, we think there is a future for the steel industry and that we can protect the jobs and the local community.
He also urges David Cameron to consider recalling parliament, so there can be a “proper debate” next week.
MPs across the country want to know what the government’s plan is, and we need to debate it thoroughly.
And on Radio 4’s Today Programme, McDonnell says that Labour could fund a recovery in the UK steel industry by reversing the corporation and capital gains tax cuts announced in this month’s budget.
Shadow Chancellor John McDonnell morning media round quotes: Scrap corporation tax cut to fund steel industryhttps://t.co/PBPrMuyYiD (£)
— PoliticsHome (@politicshome) March 31, 2016
Ministers arrive for crisis meeting
The Steel crisis emergency meeting is underway now, as David Cameron tries to get to grips with the crisis.
Several ministers have been spotted arriving at Number 10 this morning, including small business minister Anna Soubry, work and pensions secretary Stephen Crabb.
According to Sky News, Welsh secretary Alun Cairns had to run up Downing Street to avoid being late.
Updated
Unite’s Len McCluskey then urges David Cameron to recall parliament to discuss the crisis, and set up a steel taskforce.
Q: Should we follow Scotland’s example and take temporary control of the steel industry?
Yes, McCluskey replies. The Scottish government sent a message that they take the crisis seriously*
[* - by buying two steel works, and then quickly selling them onto a metals company called Liberty House]
Updated
Unite union: Cameron must take personal responsibility
Len McCluskey, head of the Unite union, is on the Today Programme now to discuss the steel crisis.
Q: Is there a direct analogy between what we did for the banks after the financial crisis, and what we could do for steel now?
Absolutely, McCluskey replies. The National Audit Office says we put one thousand billion pounds of taxpayers money into the banks to secure their survival, because the government felt they were so important to the economy.
That’s precisely what we should do now for steel.
We are appealing to David Cameron to take “personal responsibility” and recall parliament.
This is an industrial crisis of “enormous proportions”, McKluskey continues. It doesn’t just affect 40,000 workers, it affects our entire manufacturing base.
It’s absolutely essential that a foundation industry like steel is protected in order that we can have the much-vaunted march of the makers that the government talks about.
Q: But we couldn’t have functioned as a country without the banks. We can buy steel from 60 countries around the world, and it’s available cheaply. We don’t need a steel industry of its current size.
That’s terribly short-sighted, says McCluskey. Industries such as automotive, aerospace, defence, engineering, all require steel.....
Q: And they can buy it cheaply
...That’s low-quality Chinese steel that most countries won’t take. Unfortunately Britain allows it in.
Other European countries protect their steel industry - Germany makes four times as much steel as the UK.
And if we don’t have our own steel industry, it will cause serious knock-on effects to the rest of the economy.
Q: But if we support steel, taxpayers will have to pay £1m per day... to support an industry of [just] 40,000 people.
Millions of people work in manufacturing... that sector is already stuttering along, McCluskey says. It will suffer further if the steel industry dies.
Q: But cheap steel is a good thing for many UK industries.
There are different qualities of steel. We just used Swedish steel to build Royal Navy ships - that’s ludicrous. The government should use its procurement powers to ensure British steel is used for these projects.
Speaking of shambles....it appears that business secretary Sajid Javid won’t be back in London until this afternoon (or later) to tackle the crisis despite cutting his trip to Australia short yesterday.
The Times has the details:
The business secretary had boarded a flight to Australia, where he was meeting Malcolm Turnbull, the prime minister, hours before a board meeting at Tata’s headquarters in Mumbai to decide the future of its British steel operation. He touched down during the Tata meeting on Tuesday evening.
Aides claim that they gave “serious consideration” to aborting the trip but he decided to continue because no firm decision had been made. Less than 24 hours later he decided to head home but missed the last flight and spent another night in Sydney. He will be back by mid-afternoon today at the earliest.
It also emerged that ten civil servants from the business department were attending a “resilience” training course at the Royal Academy of Dramatic Art yesterday.
More here: Chaotic steel crisis response puts 40,000 jobs at risk
Javid did at least attend a black tie dinner, before heading back to the airport.
On @ITVEveningNews watch @sajidjavid attend black-tie dinner in Sydney (before he's told to return) #PortTalbot pic.twitter.com/HrN1QGRKOg
— Chris Ship (@chrisshipitv) March 30, 2016
Stephen Kinnock also concedes that full-scale nationalisation of Tata UK could be ‘very difficult’.
But the government must “step up to the place” and make it clear that it will support the steelworks until a buyer is found, and give people a sense of hope.
Stephen Kinnock: Government in 'total disarray'
Stephen Kinnock, Labour MP for the South Wales constituency of Aberavon, is discussing the steel crisis now on Sky News.
Kinnock says he “flabbergasted by the incompetence” shown by the government over the crisis.
He says:
It’s a total shambles, and it’s been a shambles for years.
Steel industry has been facing problems for five or six years, Kinnock continues, including dumping of Chinese steel, expensive energy, not enough action on public procurement.
It’s absolutely extraordinary that they’ve been asleep at the wheel for this long.
Kinnock’s constituency includes the Port Talbot steel works, so he flew to Mumbai with union leaders this week to lobby the Tata board before it took its decision.
He’s disappointed that business secretary Sajid Javid wasn’t there too, as the government knew that 29 March was “D-Day for Tata Steel”.
A plan should have been put in place to provide Tata the help it needs, and squared with the European Commission to avoid state aid problems.
Instead, Kinnock concludes, David Cameron is behaving as if he didn’t see this crisis coming.
They’re in total disarray. They either don’t care or they’re so incompetent that they simply don’t know what they’re doing.
Updated
Steel crisis: What the papers say
Today’s front page headlines make uncomfortable reading for David Cameron.
The Mirror accuse the PM of betraying Britain’s steel workers:
Thursday's Mirror front page:
— Nick Sutton (@suttonnick) March 30, 2016
Betrayed - Government's abject failure puts 40,000 jobs at risk#tomorrowspaperstoday pic.twitter.com/G7PcUHBo1B
The Guardian reports Labour accusing the government of being in disarray:
Thursday's Guardian front page:
— Nick Sutton (@suttonnick) March 30, 2016
Ministers in ‘disarray’ over steel industry#tomorrowspaperstoday #bbcpapers pic.twitter.com/kD7bwJwrig
The Financial Times says Cameron faces “acute political difficulty” over the crisis:
Thursday's FT:
— Nick Sutton (@suttonnick) March 30, 2016
Battle to save UK steelmaking as Tata says business worth nothing#tomorrowspaperstoday #bbcpapers pic.twitter.com/aOI7ELxjSb
While Metro says Cameron’s decision to chair today’s meeting could be ‘too little, too late’:
Thursday's Metro front page: 40,000 jobs on the line #tomorrowspaperstoday #bbcpapers pic.twitter.com/XmrNz0oX8V
— Nick Sutton (@suttonnick) March 30, 2016
The agenda: David Cameron chairs emergency meeting on steel
Good morning.
David Cameron’s hopes of a quiet Easter break have been shattered by the crisis gripping Britain’s steel industry.
Having dashed back from his family holiday in Lanzarote, the prime minister will chair an emergency meeting in Downing Street on the issue.
Top of the agenda: How to save 15,000 jobs at Tata UK’s steel operations, which are now up for sale, plus another 25,000 workers in associated industries.
What can the PM do? Ideally, the government wants to keep the steel mills running while a buyer is found. But with Tata UK’s losing £1m per day, that’s a difficult option - even though the Indian conglomerate is prepared to ‘give it away for nothing’, we hear.
Temporary public ownership has been mooted, to help protect workers until the business is in new hands.
Union leaders are pushing for full-scale nationalisation to be considered, but business secretary Sajid Javid has already signalled that it’s not an option.
So, quite a mess, with industry insiders warning that there are just a few weeks to find a solution.
Cameron is also playing political catch-up. Tata’s decision to sell up seems to have come as a shock to the government, forcing Sajid Javid to scramble back from Australia yesterday.
This left the stage clear for Labour; with Jeremy Corbyn telling Port Talbot workers last night that the PM must take immediate steps to guarantee steel’s future.
Corbyn is also pushing for parliament to be recalled to discuss the crisis. Downing Street is refusing, but a petition set up by the labour leader has now attracted 87,000 signatures.
Also coming up today.....
A new estimate of UK GDP for the last three months of 2015 is released at 9.30am. That is likely to confirm that Britain remains dependent on its service sector for growth, with manufacturing stuck in recession.
Chancellor George Osborne is in Paris for a meeting of G20 finance ministers.
And Bank of England governor Mark Carney is speaking in Toyko, at a session on financial stability. Maybe he’ll have some views on the steel crisis....
We’ll be tracking all the main events through the day....
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