UK Steel industry calls for government help in wake of SSI troubles
24 September 2015
Top UK steelmakers have called on the government to increase help to the sector after SSI UK, the country's second largest steelmaker, halted production last week, calling into question its future and putting thousands of jobs at risk.
The calls came as UK unions said that if SSI UK fails it could cost taxpayers hundreds of millions of pounds in redundancy and clean-up costs. SSI UK is a subsidiary of Sahaviriya Steel Industries (SSI) (SSI.BK), Thailand's biggest steelmaker.
"This is a critical time for the future of the (UK) steel industry. Government has (the) power to take immediate steps which can alleviate pressure in the short term," said Gareth Stace, director of industry association UK Steel.
Specifically, the steelmakers want the government to bring forward plans to compensate them for carbon permit costs and are also calling for lower business rates, which they say can be five to ten times higher than in the EU.
The Department for Business Innovation and Skills (BIS) said it has to date provided steelmakers with over £47 million in compensation for carbon pollution costs and voted to extend anti-dumping measures on certain Chinese steel products.
"The price of steel slab has almost halved over the past year. Global overproduction remains a problem and currency fluctuations have added further pressures. Whilst the government cannot control these factors, where we can help, we have done," said a BIS spokesman.
Despite the above measures, UK steelmakers say they pay much more for electricity than their EU competitors and are still subject to some of the highest carbon taxes in the world.
Britain's biggest steelmaker, Tata Steel (TISC.NS), said in July it could cut more than 700 jobs as it had been hit by cheap imports and high energy costs. The company has cut thousands of jobs since it bought Anglo Dutch producer Corus in 2007.
SSI bought the Redcar plant in northeast England in 2011. It employs 2,000 people directly in an economically deprived region, where locals fear its collapse would put at risk thousands more jobs indirectly related to steelmaking.
"Now is not the time for ministers to heed the siren calls of government officials advising caution. The government must demonstrate it has the political will to give Teesside steel a future," Roy Rickhuss, general secretary of the labour union Community, said in a statement.
Meanwhile SSI and Thailand's three major banks have agreed to consider options to restructure its $1.4 billion (£917.43 million) of debt, including selling the British assets.