Millions in loans to Chinese firms crippling UK steel: Company was handed £40m in deal to help it cut pollution
11 April 2016
Chinese firms accused of dumping steel that have led to the destruction of the British industry have been given loans by the European Investment Bank.
A loan of £40 million was made to one of the worst culprits of the practice, the Wuhan Iron & Steel Corporation – which has the Chinese communist government as its main shareholder.
Cheap steel imports, mainly from China, have brought the British steel industry to its knees, threatening to close the remaining operations.
It has been one of the main factors in the decision of Indian owners, Tata Group, to put its Port Talbot plant up for sale.
The European Commission has threatened to stop Wuhun from dumping steel by imposing tariffs of 36.6 per cent.
But EU bankers gave the firm a loan of £40 million five years ago to put towards a ‘Euro Combined Cycle Plant’ as part of a climate change deal.
The money is meant to go towards lower emission technology to reduce pollution and energy costs.
The Shaogang Songshan plant in Guangdong also received EU subsidies. It got £30 billion in European Investment Bank funds to improve its energy efficiency in 2008.
Peter Lilley, a Eurosceptic Tory and the former Trade and Industry Secretary told the Sunday Express: ‘I never cease to be amazed by the capacity of self-harm by European institutions, particularly when they become embroiled in climate policy.
‘We are not allowed to employ non-commercial support to our own industry, yet the EU has been doing exactly that for China.’
Simon Boyd, director of Reid Steel and South-west chairman of the Eurosceptic group, Business for Britain, said: ‘This is insane. Already, thanks to our EU membership, we’ve lost control of our trade policy and lack any ability to support the competitiveness of our steel industry.
‘Now we learn that the EU has been making loans to state-owned Chinese steel makers, who are then able to sell below cost back into the EU and our UK government has been powerless to intervene as it should have done due to the EU state-aid rules.
‘We hand £350million a week to Brussels, that’s money we should spend on our priorities, not Chinese steel.’
Philip Hammond, the Foreign Secretary, has visited his Chinese counterpart in Beijing, Wang Yi, to discuss the crisis of steel dumping.
Mr Hammond said: ‘I urged China to accelerate its efforts to reduce levels of steel production.
He added: ‘The UK’s focus is on finding a long-term sustainable future for steel making at Port Talbot and across the UK, and I welcomed the potential interest of Chinese companies in investment in UK steel making.’
A deal to save one of Tata’s plants, in Scunthorpe, Lincolnshire, could be signed today.
Source : dailymail.co.uk