Scotland and Scunthorpe bear brunt of job losses, leaving one in six workers facing axe in one month

More than one in six workers in Britain’s steel industry is facing the axe after Tata Steel confirmed it was cutting 1,200 jobs.

The announcement increases pressure on the government over its handling of the crisis.



Tata, which owns the remnants of the former British Steel, blamed cheap Chinese imports, the strong pound and high electricity costs for its decision to stop production of steel plate.

About 900 jobs will be lost at Scunthorpe and 270 in Scotland with the rest going at other UK sites. Plate mills will be mothballed in Scunthorpe, Dalzell in Motherwell, and Clydebridge in Cambuslang, near Glasgow.

Steel crisis grows as Tata confirms 1,200 job cuts - business live Read more

One of two coke ovens at the Scunthorpe works will also be closed. Workers have been waiting for official news of the cuts as speculation mounted about Tata’s plans.

Karl Köhler, chief executive of Tata Steel’s European operations, said: “I realise how distressing this news will be for all those affected. We have looked at all other options before proposing these changes.

“The UK steel industry is struggling for survival in the face of extremely challenging market conditions. This industry has a crucial role to play in rebalancing the UK economy, but we need a fairer system to encourage growth.

“The European commission needs to do much more to deal with unfairly traded imports – inaction threatens the future of the entire European steel industry.”

John McKenna, who worked at Ravenscraig steel works before it closed in 1992 and joined Dalzell eight years ago, said: “I’m disappointed they’ve decided to treat us this way. There’s a good workforce here. There’s a future if the government wants to make it that way.”

The management team at Tata’s Scunthorpe steel mill are eyeing a buyout of the loss-making plant, according to sources. The Indian conglomerate has been trying to offload its Scunthorpe-based long products division since a sale to the billionaire industrialist Gary Klesch, owner of the Klesch group of global industrial commodities, fell through in August.

Fears are growing for the future of the North Lincolnshire plant. One source said that Tata wanted to close the site and focus its resources on its sister operation in Port Talbot.

The source said: “The market will not change. I think they [Tata] are discussing various things to see if other people buy it [Scunthorpe]. At least they are giving it a try.”

He said Tata was not currently in talks with any potential buyers, but noted that it has discussed the possibility of a management buyout by the team currently in charge of the Scunthorpe steel mill. “They might be talking about a management buyout. But who is going to fund them [management] when the prognosis is so bad?”



Tata could not be reached to comment about a possible management buyout of the Scunthorpe mill.



The trade body UK Steel said the closure of Dalzell would have strategic implications for Britain’s defence policy.

Gareth Stace, director of UK Steel, said: “Dalzell is the only site in the UK capable of rolling steel for use in the Trident replacement and for armour plating for the armed forces. Does [the defence secretary] Michael Fallon understand that if that site closes, the army and navy will have to go abroad for steel that is used for national security purposes? It’s a really significant issue.”



Andrew Crawford, who had worked at the Dalzell plant for 26 years since the age of 20, said he was devastated by the news.



“My dad worked there. I’ve had friends just retire and there are young kids in there with families. They as good as said it was the end of the steel industry in Scotland this morning. The way they spoke about the Chinese imports, that’s how it was explained to us.”

The job losses at Tata, which employs 17,000 people in the UK, follow the announcement this month that SSI, the Thai owner of the Redcar steelworks on Teesside, had gone into liquidation with the loss of 2,200 jobs. On Monday, Caparo Industries went into administration, putting up to 1,700 jobs on the line.



As British steel industry goes into meltdown, government faces some burning questions Read more

In total, about 5,100 jobs are threatened out of just under 30,000 employed in the steel industry. Tata has already said more than 1,000 job would go at Llanwern and Port Talbot in south Wales and Rotherham, South Yorkshire.

The business secretary, Sajid Javid, was called to the House of Commons to defend the government’s reaction to the industry’s woes.

Responding to an emergency question from Labour, he said the government would not stand by while workers lost their jobs but announced no new measures to support the industry. Javid also played down the role of cheap imports from China, whose president, Xi Jinping, is visiting the UK, in forcing down prices.

“No government can change the price of steel in the global market. No government can dictate foreign exchange rates” or break European rules on state aid, Javid said. “China is one of those countries – the main one in terms of overcapacity in the market. There is a recession in Brazil, there is also Russia … It’s a wider problem than just China.”

Kevin Brennan, the shadow business secretary, said: “They seem content to let Britain’s steel industry disappear in the face of Chinese dumping. While the Chinese president is riding down the Mall in a gilded state coach, British workers are being laid off because our government is not standing up for them.”

Ian Wright, the Labour MP for Hartlepool, near Redcar, said Javid’s proposed long-term plan for the steel industry would be obsolete without immediate action.

“If he doesn’t take urgent action now, in days, there won’t be a British steel industry left by the end of the year,” Wright said.

Britain’s steel industry has been battered by falling steel prices, high energy costs, cheap imports and the strength of the pound, which has made exports expensive. Tata said imports of steel plate into Europe had doubled in the past two years and imports from China had quadrupled.

Global steel prices since 2008 Global steel prices since 2008

The steel crisis threatens severe knock-on effects, with jobs threatened throughout the supply chain for the industry. In addition, many towns with steel plants rely on the sector’s skilled workers to spend money in local shops and other businesses.



Tom Westley, chairman of the Westley Group foundry business, said the government needed to come up with a strategy for the steel industry. In the short run, ministers might need to intervene, despite European state aid constraints, to save the industry, he told the BBC’s Today programme.

“When prices of products become so low ... you have to have a longer-term strategy. Perhaps we have got to give some level of subsidy to keep this industry alive and look at it as a national asset rather than [in terms of] costs. You have got to take a sensible view about whether it is sensible to drive people out of business.”