Yesterday the European Parliament debated the steel crisis that is currently crippling Europe’s manufacturing base. Europe is the second largest producer of steel after China but is at risk of being further undermined unless the EU takes action against ‘dumping’ practices.
Dumping occurs when other countries sell their goods cheaper abroad then they do at home. This artificially lowers prices and is a contributing factor in the closure of plants such as Redcar. Unfortunately, British ministers are currently thwarting reforms to the EU's trade defence measures, reforms that would enable more to be done to stop the dumping of steel by countries like China. Labour MEPs want the workforce to be able to initiate complaints about dumping, which would empower British workers to take action against current problems- but these reforms are not backed by the British government.
The problem is worsened by the UK government’s refusal to take the other forms of action available to them to protect workers and companies at risk, and to support those that have already been affected.
First, the Tory government has failed to apply for £5m in funding from the EU to support UK steel workers. The European Globalisation Adjustment Fund (EGF) allows governments to apply for funding to support workers who lose their jobs due to the failing of a large company or faltering industry.
The UK steel industry has already lost over 2000 jobs in the North East alone. The government could and should use this funding to support redundant workers with careers advice, re-education and training, mentoring, and business creation.
Second, the UK government has insisted that it is unable to intervene to support UK steel as a result of EU rules. However, other European countries support their foundation industries within the rules because they believe they are so strategically important to their general manufacturing base. There are countless examples in the steel industry around Europe of countries like Italy taking a stake in struggling companies and qualifying for support for workers threatened by redundancy.
Finally, if we want a balanced, healthy economy that is both sustainable and globally competitive we must develop a level playing field in Europe for our industry. 94% of the Chinese steel that is exported into the EU comes to the UK, partly because the UK government has not been proactive when it comes to procurement on massive projects like Crossrail.
It is vital that we take action now to provide a future for the remainder of the Steel industry in the UK, and in the South East. In the UK alone, the steel industry is made up of over 24,000 individual enterprises which directly employ 330,000 people and is worth in excess of £45.5 billion to the UK economy. The Tory government needs to stop blaming the EU for its failure to intervene to protect this vital part of British manufacturing industry, support calls from Trade Unions to tackle dumping seriously, and take up the help available from the EU for threatened workers.