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UK steel: Business secretary seeks emergency EU talks Steel firms to get 'green levy' refund
(about 20 hours later)
The UK business secretary has called for an emergency EU meeting to discuss the crisis in the steel industry. Steel firms in the UK could start to receive compensation for high energy costs within weeks.
Sajid Javid, who will meet European commissioners on Wednesday to discuss the sector, has been contacting member states on the need for urgent action. The government has confirmed that the steel industry will be refunded the cost of green levies on energy bills as soon as the EU grants state-aid clearance.
The move comes as steel workers prepare to lobby MPs after thousands of jobs were lost at plants in recent weeks. The package could be worth about £50m a year for the struggling sector.
The industry blames cheap Chinese imports and high energy costs for the collapse in steel prices. But the government has come under fire for failing to have a steel industry strategy.
'Unprecedented challenges' Thousands of job losses have been announced in the sector in recent weeks, with the collapse of SSI in Redcar, Cleveland, and cutbacks at Tata Steel in North Lincolnshire and in Lanarkshire.
Mr Javid is expected to raise concerns over unfair steel imports with EU Trade Commissioner Cecilia Malmstrom. The industry blames what it says are unfair Chinese imports, as well as the higher energy costs it faces compared with rivals elsewhere in Europe.
He will also meet Industry and Internal Market Commissioner Elzbieta Bienkowska and Commission Vice President Jyrki Katainen. Full refund
"I want to see steel top of the EU agenda," Mr Javid said. The government wants to compensate intensive-energy industries, including steelmakers, for the green levies for renewable energy which add to the cost of our bills.
"We cannot stand by while the steel industry across Europe, not just in the UK, faces such unprecedented challenges. Speaking during Prime Minister's Questions in the Commons, David Cameron said that the industry would have those costs refunded once the plan was approved at an EU level.
"The government wants to work with the EU and our European partners to do all we can to support our steel industry," he added. "We will refund the energy-intensive industries with the full amount of the policy costs they face as soon as we get the state aid judgment from Brussels," he said.
The government says Mr Javid also had positive talks with the competition commissioner on the compensation scheme for energy-intensive industries. The compensation package was expected to be introduced from April 2016.
The scheme, which is awaiting EU state-aid approval, is due to be introduced from next April. Industry body Steel UK said that starting it earlier would give give the sector breathing space in the current crisis.
It is understood that the government is hopeful of movement on the issue within weeks. That could lead to it being introduced earlier. "The steel sector had asked for a full commitment to help offset the cost of high energy costs and it now appears this will be given over the lifetime of the Parliament," said Gareth Stace, director of UK Steel.
Steel summit "This will give much needed confidence to the sector in terms of future investment."
Thousands of job losses have been announced in the sector in recent weeks with the collapse of SSI in Redcar, Cleveland, and cutbacks at Tata Steel in North Lincolnshire and in Lanarkshire. "It is now essential that we seek state aid as soon as possible, so that payments can begin immediately as promised," he added.
Workers from several steelmaking communities including Teesside, Lincolnshire, Yorkshire and south Wales are expected to lobby MPs at Westminster on Wednesday ahead of an opposition day debate on the crisis brought by the Labour Party. Steel 'sacrificed'
The main steel union is also calling for a meeting with the government amid what it says is an "ongoing threat to jobs". But the government has been criticised for failing to have a strategy for the industry.
It has emerged that unions have not yet been invited to participate in three industry working groups, established after a steel summit earlier in October. Angela Eagle, the shadow business secretary, accused the government of sacrificing the UK's steel industry on the "altar of laissez-faire economics".
In a letter to the business secretary, seen by the BBC, the Community Union's general secretary Roy Rickhuss said: "Considering the urgency of the situation, and the ongoing threat to jobs and businesses across the UK, I believe it is important you meet with representatives of the steel unions at the earliest opportunity to discuss recent events and how we might work together in support of the industry." Speaking during an opposition day debate on the steel crisis, Ms Eagle accused the Government of lacking an industrial strategy.
The steel industry wants action from the government on high energy prices and business rates. "The problem that we are dealing with here is actually that this government don't have a strategy and they are living hand to mouth, trying to deal with a crisis that they should have seen coming," she said.
It also wants more local sourcing of steel, and moves to prevent the dumping of Chinese steel on EU markets. Ms Eagle also called for the government to do more to prevent unfair trade.
It is facing millions of pounds of costs to comply with new EU emissions regulations. "China is currently responsible for a tsunami of cheap steel which is being dumped on European markets," she said. "The UK should be at the forefront of demanding rapid and effective action to stop it."
But its now likely that several key UK steel plants will be given up to four-and-a-half years longer to meet the emissions requirements. Emergency meeting
The plan has been submitted to the European Commission for approval. Cheap Chinese imports were high on the agenda of the Business Secretary, Sajid Javid, during a visit to Brussels on Wednesday.
On Tuesday, MPs on the Commons Business Select Committee were warned the industry would need help within weeks. He has asked the Luxembourg presidency of the EU to convene an emergency meeting of the European Council to discuss what can be done on the steel crisis.
Gareth Stace of the trade body, Steel UK, described the industry as being like a patient on the operating table which is "likely to die" without urgent help. "So much of the action that needs to be taken to support the steel industry has to happen right here in Europe, whether that's action against unfair trade, compensation for energy intensive industries like the steel industry, we need the help of the commission to do that. I'm here to make sure that it is treated as an absolute priority," he said.
Mr Javid said that he had spoken about the issue to his counterparts in France, Italy and Spain.
"When it comes to unfair trading practices, just as the US has taken action, we need to show that the EU can also take that type of action, but it can do it quickly," he said.
Follow John Moylan on Twitter @johnmoylanbbc