THE crisis engulfing the UK steel industry intensified yesterday as another 1,800 jobs were lost – with the last two major plants in Scotland poised to be axed today. Tata Steel is expected to confirm today that the plants in Cambuslang and Motherwell will close with the loss of about 400 jobs.
Now Caparo is understood to be set to go into administration, with the loss of around 1,800 jobs across the UK.
Prime Minister David Cameron has pledged to raise the issue with Chinese President Xi Jinping, who is in the UK for four days on a state visit. Cheap Chinese imports of steel have been blamed for the collapse in global prices.
The Scottish Government has pledged to act to save the Scottish plants but warned that it is “severely constrained” by EU rules in its ability to step in.
About 5,200 jobs have been axed in the UK steel industry in recent weeks.
But business minister Fergus Ewing warned the Holyrood government’s hands could be tied. “We must do everything that we possibly can and of course we endorse the need to support training and employment,” he said.
“EU state aid severely constrains what aid [can be given] to the steel industry in particular, and prohibits regional aid from being extended.
“But it does enable ‘horizontal’ aid, which is a strange EU word which means assistance for training and employment. So, of course we will explore exactly what can be done. We will use all means at our disposal to maintain a viable future for the plants.”
Tata operates the Clydebridge plant in Cambuslang, where it employs about 70 people, with the remainder of its Scottish workforce based at its Dalzell plate-rolling works in Motherwell. There are also distribution centres in Edinburgh, Dundee and Mosstodloch in Moray.
The closure would mean the only remaining plant in Scotland is the former Clydesdale tube works, now owned by Vallourec, making steel tubes mainly for the North Sea.
At its peak, steelmaking employed more than 10,000 people in plants and surrounding businesses in central Scotland, with the famous Ravenscraig site once the biggest producer of hot-strip steel in Europe.
First Minister Nicola Sturgeon told the SNP conference in Aberdeen on Saturday that she would immediately establish a task force to work with the company, unions and local authorities “if our worst fears are realised”.
Caparo operates rates from about 20 sites across the UK. The company is part of Labour peer Lord Paul’s Caparo Group.
The Prime Minister told MPs yesterday: “We’re doing everything we can in Europe to help our steel industry.
“That is why we voted in favour of dumping tariffs against the Chinese and we’ll do everything we can to help our steel industry, including looking at how we help on high energy usage and the clearances that we need with that. Will we raise it with the Chinese? Of course, we’ll raise all these issues. That is what our relationship with China is all about. It is at such a high level that there is no subject off the table and all of these issues, including the steel industry, of course will be discussed.”
Tony Burke, assistant general secretary at Unite, said: “This is yet another hammer blow for steel and manufacturing communities across the UK already reeling from the closure of Redcar and job losses at Tata steel.
“Our members at Caparo Industries are highly skilled and work hard to produce world-class products. We believe the company has a future. Unite will be working with Caparo’s administrators and doing everything in our power to save jobs. Government ministers need to ask: How many more steel firms need to go to the wall before they step in and support the UK’s steel industry?”
Angela Eagle, shadow business secretary, said: “This is a further blow to the steel industry, which is now on its knees, and my thoughts are with the employees of Caparo.
“The industry needs urgent action from the government. However, this government seems content to let the industry fail.”