EU rules could block Scottish steel intervention

THE Scottish Government is “severely constrained” by EU rules in its ability to step in and save two closure threatened steel plants, the business minister has said.

The Tata Steel plant in Cambuslang which is facing closure. Picture: Hemedia

Fergus Ewing has admitted that he “fears that worse” with Indian giants Tata poised to confirm tomorrow that the plants in Cambuslang and Motherwell will be closed with the loss of about 400 jobs.

Union leaders have called on the SNP Government to intervene and keep the factories operational with a “short time working programme” to weather out the storm in global markets and ensure the skills and infrastructure are retained.

But Mr Ewing today warned the Governments hands could be tied.

“We must do everything hat we possibly can and of course we endorse the need to support training and employment,” he told BBC Radio Scotland.

“EU state aid severly 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.”

He added: “We will use all means at our disposal to maintain a viable future for the plants.”

Tata Steel is expected to confirm tomorrow that 1,200 jobs will be lost across the UK. 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.

The steel industry is facing cut-throat global competition, with China in particular dumping cheap imports in the UK. Tata Steel announced the potential sale of its long products division last year, but the deal collapsed.

“We’ve been working very closely with the company in the last year since the sale fell through,” Mr Ewing added.

“We fear the worst, but we don’t know exactly what’s going to be announced by the company.”

Nicola Sturgeon said at the weekend that the Government will set up a task force to try to find a new owner for the plants, as well as assiting workers find alternatuive jobs in the event of closure.

The problem facing the Scottish plants is that they form part of an integrated UK operation and “finish” the raw steel slabs which are sent up from the main plant in Scunthorpe. If this shuts, or is severely scaled back, the outlook is likely to be bleak for the Scottish operations.

Liberal Democrat leader Willie Rennie said: “While we are still awaiting confirmation of any job losses from Tata, the workforce and industry need both of Scotland’s governments to work together in an effort to secure their futures.

“People in Lanarkshire will naturally be concerned over what any closure would mean for jobs at the plant and for the wider local economy.”