Steel industry braces for 1,200 jobs axe after crisis summit

The steel industry is facing a worsening crisis, with over 1,200 fresh jobs set to be axed in one of the country's biggest plants.

Tata is preparing to announce cuts in Scunthorpe and two sites in Scotland, dealing a massive blow to the industry so soon after steelmaking ended at the Redcar plant on Teesside.

Tata said it would not comment on "rumour and speculation", but an announcement is expected on Tuesday.

News of the cuts emerged as the Government held a summit in Rotherham to discuss the crisis gripping the industry amid plunging prices and cheap imports.

Unions, business leaders and ministers attended the summit in Rotherham, which was overshadowed by the news of even more job losses.

Most of next week's cuts are expected to hit Scunthorpe, but steelmaking will effectively end in Scotland if cuts are confirmed in Dalzell and Clydebridge.

Roy Rickhuss, general secretary of Community, said: "Clearly this is extremely worrying news for all those who may be affected. We'll be seeking further discussions with Tata Steel to understand the full detail, examine alternatives that may safeguard jobs and uphold our principle of opposing compulsory redundancies.

"This is yet another blow to our steel communities and demonstrates the precarious state of the UK steel industry and emphasises the need for government action which Community and the employers have been calling for at the summit today.

"We will also be seeking a meeting with the Scottish Government as a matter of urgency to discuss what support they can offer to Tata Steel's Scottish steel mills at Dalzell and Clydebridge."

Davie Hulse, national officer of the GMB, warned that unless immediate action is taken, the steel industry faces a "dire" future.

He said there was agreement at the summit for a number of measures, including tackling dumping of cheap imports, business rates, an energy compensation package, support for infrastructure projects and stop "gold-plating" environmental regulations.

Unite assistant general secretary Tony Burke said: "This news heaps further uncertainty on the steel industry and all those whose livelihoods depend on it. We will be consulting urgently with Tata over potential job losses and will leave no stone unturned in protecting our members' jobs and steel making in the UK.

"Time is ticking on the UK's steel industry and the news of yet more job losses should jolt the Government out of its laissez faire approach to this vital part of the UK economy. Now is not the time for platitudes from Government ministers, we need urgent action to support steelmaking in the UK.

"If the Government is serious about rebalancing the economy then it needs to take action against the dumping of cheap Chinese imports and support an industry which is being hammered by high energy costs.

"Ministers also need to develop an industrial strategy and ensure major infrastructure projects, such as HS2, use British steel so that steelmaking and manufacturing communities here in the UK reap the benefits of such investment."

John Cridland, director general of the CBI said: "Developments at steelworks in Scunthorpe and Scotland are devastating, particularly for those who have lost their jobs and the wider local community.

"To secure the future of our industrial base the Government needs to work in partnership with businesses on a long-term industrial strategy. It should also act to guard against excess market supply, support industry by removing plant and machinery from business rates calculations, and secure lower costs for energy intensive industries to help make steelmakers more competitive in the global marketplace."

Emerging from the steel summit, Karl Koehler, Tata Steel's chief executive of European operations, would not confirm the job losses in Scunthorpe and Scotland, saying: "Today was not about announcements.

"When we have something to announce we will do it in the appropriate fashion, as you know."

Asked about the job rumours, he said: "I do understand that rumours are always difficult. That's why we always try to avoid that and come into direct language.

"I'm not making the announcement here today. I was here for the steel summit."

But he described the situation more generally as "serious".

TUC general secretary Frances O'Grady said: "This would be a hammer blow for British steelmaking and manufacturing in the UK.

"Ministers have been far too slow to wake up to the crisis facing heavy industry in Britain. Today's crisis summit should have happened months ago, not at the 11th hour.

"The Government must now step in to stop the loss of even more highly skilled jobs. The lack of a coherent industrial policy is costing the UK dear."

Business Secretary Sajid Javid said after the summit: "There is no straightforward solution to the complex global challenges facing the steel industry. But today was an important opportunity to bring the key players together and we now have a framework of action.

"The Government is committed to working closely with industry on both short-term and long-term issues and to doing everything we can to support both industry and the workers.

"A strong economy underpins everything and we will continue to focus on securing the UKs economic recovery across the UK.

"This is a hugely difficult time for the steel industry across the world - one of the toughest times ever. It is a worldwide problem, and while it will not be solved overnight, we will work closely in partnership with the industry to help find some answers.

"There is no magic bullet and we can't change the price of steel, but we can forensically work through all of the challenges we know the industry is facing to see what solutions there might be.

"We will also continue to do everything we can to support workers and to continue building a strong economy across the country."

Shifts at the SSI plant in Redcar plant finished on Thursday, with union officials describing it as the "killing of steelmaking on Teesside".

The coke ovens and blast furnace at the Redcar steelworks are being shut down after the Thai owners went into liquidation and no buyer was found.

Today's summit was held at the Advanced Manufacturing Park, which overlooks the former site of the Orgreave coking plant - the scene of the some of the most violent confrontations in the miners' strike 30 years ago.

Mr Rickhuss said later: "Everyone impressed upon the ministers the crisis that the UK steel industry now faces and they should be under no illusion about what a united industry expects. The Secretary of State must now grasp the urgency of this situation. His willingness to listen was welcome, now he needs to show the political will to act.

"While the Government has agreed to develop a number of working groups, timescales are unclear and they may only deliver in the medium to long-term. As we have said, Government must also take practical action in the short-term to deliver urgent support to the industry particularly on dumping and uncompetitive energy costs. Today's summit will only prove worthwhile if that support arrives soon.

"Community will continue to make the case for retaining vital skills and jobs within the industry in the interests of UK steelworkers, their families and communities. We do not want to see a repeat of the devastating situation in Redcar and nor should the Government."

Gareth Stace, Director of UK Steel, said: "We asked Government to sit down and listen to the needs of the steel industry and take decisive action to support us. They have listened and promised to take action. The Secretary of State has committed to support the compensation package for energy intensive industries such as steel, and to ensure that state aid approval is secured as soon as possible.

"While it may have been too much to expect immediate decisions, we are cautiously optimistic that the urgent recommendations we have made - from compensation to cut the cost of energy to tackling unfair dumping of steel by China - are all now at the top of the Secretary of State's to-do list.

"But, I cannot emphasise enough that there is an urgency here and very little time before we start to see more job losses and companies facing intolerable pressure. This really is about saving Britain's steel industry and time is of the essence."