Sunday, 24 January 2016

Trostre has been failed by the Tories, again

This column was published in the Llanelli Herald on Friday 22nd January

I vividly remember the worry and stress at home when my father was made redundant from the colliery, and so I have some sense what the families of steel workers facing layoffs are going through this weekend.

The decision by Tata Steel to dramatically cuts its workforce in south Wales will not only decimate an industry, but will lay waste to communities too.

A UK Government who have bent over backwards to help bankers now appears to be indifferent to the fate of heavy industry. The Chancellor, George Osborne, would rather cosy up to the Chinese Government rather than push for action to tackle the sharp practices which has put Welsh jobs on the line.

Because the Chinese economy is slowing down they are producing more steel than they need, so they’re selling if off cheaply on the international markets. Last September for example, China exported 11.5 million tonnes of cut-price steel in one month  - that is almost as much steel as the UK produces in a whole year.

The U.S government have put import taxes on the Chinese steel to compensate for its low prices and to stop it undercutting home made steel. Meanwhile the UK government has blocked EU reforms which would make it easier to keep cheap Chinese steel out of Europe.

When Chinese President Xi’s came to the UK on state visit at the end of last year the only person to confront him about the effect of this so-called ‘dumping of steel was Labour leader Jeremy Corbyn.  

The European Union has taken some action but the whole process could take up to two years to resolve. Meanwhile the world economy shows no signs of growing, so demand for steel is set to remain sluggish. On top of that, the value of the pound is at a seven-year high, which makes imports cheaper.  

At a time of low demand in the private sector, the UK Government should bring infrastructure projects forward, and make sure that we use British steel in them; that would keep up our skills base and help both the steel and construction industries. Instead it is cooling on the Swansea Bay Tidal lagoon and the electrification of the train line to Swansea has been heavily delayed - both projects that could be big customers for our steel.

Tata Steel also say the cost of energy is causing it extra problems. Port Talbot steelworks uses as much energy as the city of Swansea. Indeed, Tata's electricity bill for Wales last year was £60m when its competitors in Europe are paying half as much.

The bill is inflated by a Carbon Tax set at a high rate by the Tory Chancellor in 2010. It is a tax unique to the UK, which is not paid by any of our competitors, inside or outside the EU.

The Welsh Labour Government raised concerns about the impact of energy prices on the most energy intensive businesses in 2011.  Now, in 2016, the industry is still awaiting the full package of support promised by UK Government.

The full-range of pressures facing such Wales steel is significant. I’m attracted to the idea of the Welsh Government examining a joint-venture with Tata to help take the works through a tough period, but the industry has been very clear: it does not want hand-outs. It wants a level playing field in order to survive in a highly competitive global environment.

What we need now is for the UK Government to show the same determination as it did to help the bankers to help a key industry that is essential for the future of the UK economy.

Lee Waters is Welsh Labour’s Assembly candidate for Llanelli

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