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Tata steel crisis: Business secretary Sajid Javid has 'very productive' meetings - live Tata steel crisis: Business secretary Sajid Javid has 'very productive' meetings - live
(35 minutes later)
2.45pm BST
14:45
Workers are continuing to gather outside the building in Port Talbot where business secretary Sajid Javid is meeting with managers:
Video: Staff at the Port Talbot #TataSteel plant waiting outside of SoS Sajid Javid's meeting with bosses pic.twitter.com/pFQ4V7P2Oi
2.43pm BST
14:43
We’ve gathered together the views of people who live in and around Port Talbot, as they watch their steel industry fight for survival.
It’s a sobering read, and a vital reminder of how crucial steel is to the area.
Kristian Watts, who works in Tata Steel’s energy department, explains that the town would ‘crumble’ if the industry shuts down:
I’ve lived in Port Talbot all my life. The steel works employs not only so many of my friends, but also my family. It means everything to not only Port Talbot, but West Glamorgan, Mid Glamorgan and beyond. I know lads who travel from Ebbw Vale, Newport, Swansea, Neath and even Haverfordwest. This industry is everything to South Wales.
Without it, the town would crumble. It’s the smaller things people don’t realise will be affected. Like paper shops, supermarkets, small businesses that rely on trade from workers from the plant. Without jobs to provide money for bills and mortgages, the workers would have to rely on the council for accommodation and benefits, which is already very high in this part of Wales.
My message to the government would be to take a look at what they have created by not lowering business rates and allowing the Chinese to dump massive amounts of steel without having to pay a great deal of tax. If they aren’t careful, they will have a economic crisis on they’re hands and they have only themselves to blame.
Tata’s Indian owners cannot be blamed – they pumped a huge amount of money into the works and for what they were asking for in help seemed a small penny compared to what it’s going to cost the government in the long run.
Here’s the full piece, by my colleague Elena Cresci:
Related: Here's what the steelworks mean to the people of Port Talbot
2.36pm BST
14:36
The cause of Britain’s steel crisis is simple, and chilling, according to Oxford economics professor Simon Wren-Lewis.
One set of producers [in China] are trying to eliminate their competitors by flooding the market at a loss because they have the ‘deep pockets’ of a state behind them.
And as Wren-Lewis explains in this blogpost, Britain’s government is complicit in it [as we reported this morning].
The EU have been trying to raise tariffs against Chinese steel producers for three years, but have been blocked by a coalition of countries led by the UK.
The UK Business minister Sajid Javid has been quite explicit about this: he prefers cheap steel because it helps other parts of UK industry. It may also have something to do with wanting to curry favour with China because of other matters (which was the point of John McDonnell’s Little Red Book stunt, if only he hadn’t started reading from it!).
This is not Javid upholding the principles of a free market, but instead allowing a large state to rig a market. The irony in this case is that the state in question is not the one he works for.
The big story behind Port Talbot https://t.co/QiuQ4t1WOm
2.20pm BST
14:20
Another photo of Sajid Javid’s welcoming committee:
Waiting for the business minister at Tata Steel in Port Talbot. #bbctheoneshow pic.twitter.com/WT5Ma72wlx
2.14pm BST2.14pm BST
14:1414:14
Crowds of steel workers have gathered at Port Talbot, as they wait for Sajid Javid to emerge from his meetings:Crowds of steel workers have gathered at Port Talbot, as they wait for Sajid Javid to emerge from his meetings:
2.11pm BST2.11pm BST
14:1114:11
Two-thirds of the UK public think the Port Talbot steelworks should be nationalised, according to a poll of 1,001 people conducted by Sky NewsTwo-thirds of the UK public think the Port Talbot steelworks should be nationalised, according to a poll of 1,001 people conducted by Sky News
2.08pm BST2.08pm BST
14:0814:08
Richard Tauwhare, a senior director at law firm Dechert, agrees that Europe needs stronger defences to ride out the steel crisis, without falling into full-blown protectionism.Richard Tauwhare, a senior director at law firm Dechert, agrees that Europe needs stronger defences to ride out the steel crisis, without falling into full-blown protectionism.
Tauwhare says:Tauwhare says:
“EU trade measures alone cannot address all the challenges facing the steel industry. But unfair competition, in any sector, can and does seriously threaten EU producers.“EU trade measures alone cannot address all the challenges facing the steel industry. But unfair competition, in any sector, can and does seriously threaten EU producers.
The EU needs to streamline its procedures and sharpen its defences, while continuing to guard against the risks of veering into protectionism.”The EU needs to streamline its procedures and sharpen its defences, while continuing to guard against the risks of veering into protectionism.”
UpdatedUpdated
at 2.08pm BSTat 2.08pm BST
2.01pm BST2.01pm BST
14:0114:01
Britain needs to urgently drop its opposition to imposing higher tariffs on Chinese steel, says Gareth Stace, director of UK Steel, the trade body.Britain needs to urgently drop its opposition to imposing higher tariffs on Chinese steel, says Gareth Stace, director of UK Steel, the trade body.
Stace says that Europe could consider the ‘nuclear option’ of blocking steel imports into Europe, given the precarious state of the sector [under trade law, a country can impose emergency safeguards].Stace says that Europe could consider the ‘nuclear option’ of blocking steel imports into Europe, given the precarious state of the sector [under trade law, a country can impose emergency safeguards].
As Stace puts it:As Stace puts it:
“The Government must today change its position blocking the scrapping of the Lesser Duty Rule – removing the sign above Europe, saying ‘please dump here, you’re welcome’. We should follow the lead of our German counterparts who stand firmly behind their steel industry, manufacturing and consumers by backing the scrapping of the LDR.“The Government must today change its position blocking the scrapping of the Lesser Duty Rule – removing the sign above Europe, saying ‘please dump here, you’re welcome’. We should follow the lead of our German counterparts who stand firmly behind their steel industry, manufacturing and consumers by backing the scrapping of the LDR.
“There are more tools in the Trade Defence Instrument box and if the UK Government and other members states now accept that steel making in the Europe is in ‘emergency measures’, then even the nuclear option of ‘safeguards’ must be on the table.“There are more tools in the Trade Defence Instrument box and if the UK Government and other members states now accept that steel making in the Europe is in ‘emergency measures’, then even the nuclear option of ‘safeguards’ must be on the table.
Enacting ‘safeguards’ would effectively halt the flood of imports into the EU, which is drowning us in full sight of the global sector. Such a bold move, would give us time to breathe, take stock and see light at the end of the tunnel..Enacting ‘safeguards’ would effectively halt the flood of imports into the EU, which is drowning us in full sight of the global sector. Such a bold move, would give us time to breathe, take stock and see light at the end of the tunnel..
It would also risk tit-for-tat moves from other countries. But that could still work in Europe’s interests, given the amount of steel coming in from China.It would also risk tit-for-tat moves from other countries. But that could still work in Europe’s interests, given the amount of steel coming in from China.
1.45pm BST1.45pm BST
13:4513:45
Another tweet from the business secretary, as his trip around Port Talbot continues:Another tweet from the business secretary, as his trip around Port Talbot continues:
Very productive meeting with @WG_EconomyMin at #PortTalbot. We're committed to working togetherVery productive meeting with @WG_EconomyMin at #PortTalbot. We're committed to working together
1.35pm BST1.35pm BST
13:3513:35
Steel workers and NHS staff have linked hands outside the Port Talbot steel works today in a show of solidarity:Steel workers and NHS staff have linked hands outside the Port Talbot steel works today in a show of solidarity:
1.28pm BST1.28pm BST
13:2813:28
Business secretary Sajid Javid has tweeted that he’s had a “good productive meeting” over the Port Talbot crisis.Business secretary Sajid Javid has tweeted that he’s had a “good productive meeting” over the Port Talbot crisis.
Good productive meeting with @AlunCairns @SKinnock and @Rees4Neath @walesoffice on Port TalbotGood productive meeting with @AlunCairns @SKinnock and @Rees4Neath @walesoffice on Port Talbot
That’s Welsh Secretary Alun Cairns and his officials, plus local Labour MPs Stephen Kinnock and Christina Rees.That’s Welsh Secretary Alun Cairns and his officials, plus local Labour MPs Stephen Kinnock and Christina Rees.
1.26pm BST
13:26
At least one Conservative MP is sanguine about the troubles in UK steel, reports Jim Pickard of the Financial Times:
Tory MP: "Free markets are like gravity - they sometimes do things you don't like. There is a natural end point to British heavy industry."
1.11pm BST
13:11
China 'imposes anti-dumping tariffs' on EU suppliers!
In a development that will not improve the mood in Port Talbot, China has apparently slapped new anti-dumping tariffs on steel imports from Europe.
Reuters has some details:
China, accused of flooding world markets with cheap steel, has imposed anti-dumping duties as high as 46.3% on electric steel products imported fromJapan, South Korea and the European Union, the Ministry of Commerce said on Friday.
The overseas suppliers include JFE Steel Corp, Nippon Steel and Sumitomo Metal Corp and POSCO, the ministry said in a notice posted on its website.
The ministry did not identify any EU supplier.
The announcement is in Chinese, so I’m afraid I can’t add much details...
...but Sky’s Faisal Islam has done some digging, and uncovered that this will cover steel products made in Wales (!).
New tariff announced today re Chinese steel. 46%.By China. On EU. hi-tec "Grain Oriented Electrical Steel". Made by...Tata Steel in Newport
This does not appear to be an April Fool’s joke.
1.01pm BST
13:01
Sajid Javid’s ministerial limo has been spotted in South Wales:
Sajid Javid arrives at Port Talbot to face steel workers https://t.co/G7Hizu2R3S pic.twitter.com/VVW2ii9ZXe
12.57pm BST
12:57
Lord Mandelson: Don't rule out temporary nationalisation
Peter Mandelson, the former EC trade commissioner, is urging the UK government not to close its ears to the idea of temporary state ownership of the steel industry.
Mandelson, an architect of Tony Blair’s New Labour and a former UK business secretary (among other roles punctuated by occasional resignations), says Britain’s manufacturing sector has reached an “existential moment”:
The closure of Port Talbot’s blast furnace would mean we no longer make steel as opposed to processing and recycling steel.
If we allow this to happen we will lose the modern, high productivity infrastructure and skills we have there and offer steel imports a big opening to the UK market.
Mandelson wants to see a “strong” government intervention, and a pan-European strategy to help the steel industry across the region.
And temporary nationalisation could be pat of the answer, he adds, while a buyer is found.
The governments in London and Cardiff must continue their search for a new private sector investor in Port Talbot and use their convening power to encourage restructuring or cancelling of debt. That will enable potential new investors to assess the true value of the technology, skills and capital investment which in any sensible valuation are far from ‘worthless’. Tata UK needs to recognise its responsibilities to its pensioners and its sites and should co-operate fully with the UK government in the search for solutions.
In principle, I would not rule out temporary government ownership of the Port Talbot plant as a step towards finding new long term owners.
Mandelson also argues that EU state aid rules needn’t be a barrier to a rescue - especially if Brussels is co-operative.
EU state aid rules can support a serious plan to restructure around new specialised technology and long term viability. The European Commission should be urged to use the ‘critical infrastructure’ public interest case for steel and establish collective rules to provide state aid for restructuring plans, bridging finance and future investment.”
Updated
at 1.15pm BST
12.40pm BST
12:40
The campaign to ban selfies gets an unexpected boost:
I want to see this George Osborne Asda selfie. pic.twitter.com/Pbso7gtOwc
12.35pm BST
12:35
Tata steel's pensions problems
Graham Ruddick
More than 130,000 steel worker and former steel workers have been left in the dark about the future of their pension as a result of the crisis.
The British Steel Pension Scheme (BSPS), which was inherited by Tata when it bought Corus in 2007, has £14.5bn of liabilities, making it one of the biggest pension schemes in the UK.
However, members of the pension scheme, which has a deficit of £485m, face an uncertain future if Tata sells the business.
Tata sources say the cost of the pension scheme is one of the main issues facing the steel business in the UK. Accounts for the business show that last year Tata pumped £129m into the scheme last year and will spend even more in 2016.
John Ralfe, a pensions expert, said Tata Steel’s UK operations are a “pension fund with a business tagged on”.
He warned that Tata could be forced to pay more than £2bn into the scheme if it sells the business.
He said:
There is a complete vacuum, Tata Mumbai needs to come out and say exactly what is happening to the BSPS.
Tata hasn’t addressed annual pension costs early enough. They should have closed to existing members a long time ago. They took the easy option.
They could have to pay more than £2bn to keep the regulator happy.
If the business did collapse into administration the pension scheme would enter the Protection Pension Fund.
Updated
at 12.40pm BST
12.23pm BST
12:23
Tata won't comment on German tie-up reports
Graham Ruddick
Tata Steel is declining to comment on those reports that it is planning a tie-up with Germany’s Thyssenkrupp, once it has shed its UK operations.
Asked about the story, Tata would only say:
We do not comment on media speculation.
Tata also confirmed that it has appointed PwC to advise it about the restructuring of its UK business, but won’t give further details.
A spokesperson in Port Talbot says:
Like all large firms we use a range of professional advisors for tasks where they have particular expertise. We don’t make public statements on the details of such advisory relationships.
12.17pm BST
12:17
Osborne: We're doing everything we can
George Osborne has just hit back at the stinging criticism that the government has been pandering to China rather than protecting the UK steel industry.
Speaking in Manchester, the chancellor declared:
Internationally we are working to make sure that there are tariffs on unfair cheap exports.
Domestically we are doing everything we practically can, everything we possibly can to help the steel workers, help the steel industry.
That’s why the business secretary is is there in Port Talbot today, looking for long-term solutions.
That may come as a surprise to the European Steel Association, who insist that Britain has NOT been been doing everything it can, and has been the ringleader in blocking higher Chinese tariffs.
Osborne was sporting a high-visibility jacket but ditched the hard hat that he often wears for photo ops:
Maybe he has lent the hat to Sajid Javid, for protection against irate steel workers....
Updated
at 12.41pm BST
11.37am BST
11:37
UK taxpayers could be forced to stump up £1.5bn per year if the government bites the nationalisation bullet and takes Tata UK’s operations into public hands.
That’s clearly not-insignificant sum of money. So what else could we do with it? Well, you can get half an aircraft carrier -- although that wouldn’t stretch to any planes.
And it’s only a fifth of the cost of a new nuclear sub, or just 3% of the bill for building the HS2 railway link...
For more neat comparisons, click here:
Related: What the UK could buy for £1.5bn (instead of spending it on Tata Steel)
Updated
at 11.53am BST
11.23am BST
11:23
In another potential embarrassment for the UK government, Tata is reportedly considering taking a stake in the steel unit of Germany’s Thyssenkrupp.
German business paper Rheinische Post reports that talks between the two parties are at an “advanced stage”.
One option is that they could create a joint venture, with Tata Steel holding an option to increase the stake at a later date, apparently.
Tata Steel have declined to comment on the claims to Reuters.
If it’s true, it shows that Tata remains interested in European steel operations despite the problems in the UK.
Shares in ThyssenKrupp have jumped by almost 5% this morning. Analysts have already speculated that a merger between the German and Indian firms makes sense, given the tough conditions in the global steel market.
Tata Steel, Thyssenkrupp in steel unit talks: Report https://t.co/xePinuslT0 pic.twitter.com/H311rV0HCs