Steel-making firms could be put out of business (Image: Daily Record)
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Slashing safeguards on British steel risks sending plants which produce metal for Royal Navy warships out of business, Labour warned tonight.
The Tories are poised to axe defences aimed at protecting UK manufacturers from cheap foreign imports.
Senior industry figures fear the move will throw the sector into fresh jeopardy as it struggles to compete with foreign rivals.
Labour will force a vote on the issue on Monday following an Opposition Day debate.
Shadow Defence Secretary John Healey warned that removing the measures could trigger the closure of UK mills – and force the Navy to buy from overseas when constructing vessels.
He said: “This decision puts unnecessary extra pressure on Britain’s steelmakers.
“It takes Britain in totally the wrong direction when the UK steel industry needs a long-term plan, backed by the Government using its procurement powers to help.
“The public expect British ministers to stand up for British industry and British jobs, not open the floodgates to unfairly cheap Chinese imports.
“One major test of the Government’s long-promised National Shipbuilding Strategy will be the plans to build up British steelmaking as a foundation to strengthen the UK’s economy and sovereignty.”
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The Mirror revealed in 2016 how steel for the new Dreadnought nuclear-armed submarine fleet was being imported from France.
International Trade Secretary Liz Truss is expected to decide within days whether to accept a recommendation from the Trade Remedies Authority to axe safeguards.
Legally, she is obliged to follow its advice.
A number of the steel categories set to be removed from the measures are used to construct British warships, according to Labour.
The party warned the decision could lead to the UK losing the sovereign capability to produce steel needed for vessels.
Protections were introduced by the EU in 2018 when the UK was part of Brussels' trade rules, in retaliation for Donald Trump's White House slapping tariffs on steel imports.
The Brussels' measures carried on in Britain until January when the Brexit transition ended.
The British regime set tariff-free quotas for a range of steel products based on 2015-2017 levels of imports.
Fresh hammer blow to UK steel industry as vital safeguard measures face the axe
Only once they have been filled are tariffs applied to any extra imports over a three-month period.
Measures were extended until this month but the UK Trade Remedies Investigations Directorate recommended they were relaxed – a move backed by the TRA.
Confederation of Shipbuilding and Engineering Unions general secretary Ian Waddell said: "It is absolutely vital that we maintain our ability to design, build and maintain warships in the UK using British steel.
“This will support thousands of highly-skilled jobs and pump resources into our regional economies through wages and investment that will be spent locally in shops and businesses.
“Taking away these safeguarding measures will pull the rug from under the feet of thousands of employees at a time when help is needed most.”
Community steelworkers' union operations director Alasdair McDiarmid said: “The Trade Remedies Authority’s decision threatens thousands of jobs and Britain’s capability to produce steels crucial to our nation’s defence.
“The steel safeguards protect us from being flooded by cheap foreign imports and it would be an unforgivable act of self-harm to give up our protections when the EU and the US are maintaining their own defences.
“This Government has had plenty of warm words for steelworkers but we need action now; failure would make a mockery of Tory promises to support British industry, British workers and industrial communities.”
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UK Steel director-general Gareth Stace said: “Plans to slash the UK’s steel safeguards in half are reckless and irresponsible.
“Steel is a foundation industry, fundamental to our economy and our national security.
“By removing half of the steel safeguards, the Trade Remedies Authority and Government will expose the entirety of the sector to floods of imports and damage the case for investment in steel facilities across the country.”
A Government spokeswoman said: “All interested parties, including importers, domestic producers and overseas exporters, have been able to participate in the review to provide evidence to factor into the Trade Remedies Authority’s assessment.
“The TRA is a non-departmental public body, and all its decisions are based on a thorough analysis of the evidence.
“The Trade Secretary's decision on the recommendation will be published before the measure is due to expire on June 30, 2021.”
'This will damage our sector three times over.'
UK Steel director-general Gareth Stace and Community steelworkers' union general secretary Roy Rickhuss write exclusively for the Mirror.
"If you want to level up Britain, do not level down our steel sector"
(Image: Press Association)
The UK steel sector is a foundational industry – foundational for our economy and for the communities built up around it.
Communities that make steel are defined by that industry, and the decline or closure of plants and facilities can have devastating consequences for livelihoods which are felt for generations.
This month, the Government’s arms' length body, the Trade Remedies Authority, recommended to the Secretary of State for International Trade, Liz Truss, that the protections against floods of imports from foreign producers should be halved – reducing the protection our steel sector enjoys compared to other steelmakers based in the EU.
On Monday, the Government face a motion in Parliament urging them to extend all the safeguards and to address some of the flaws that have led to this decision from the TRA that ministers themselves have acknowledged is flawed.
While Government seem to be reviewing the suitability of their own powers to overrule flawed recommendations, steelworkers across the country cannot wait, nor can steelmakers afford to be the canary in the coal mine, suffering so that Government can correct mistakes in their own legislation.
The global steel market suffers from overcapacity; just 2% of this global overcapacity could fill the entirety of the annual demand for steel in the UK market.
The UK has had steel safeguards since 2018, as an EU member, and these were transitioned into UK law in January 2021.
The measures were introduced to limit further increases in imports because of a dysfunctional global trading environment for steel, protecting quotas of products for steel customers from tariffs, while setting a cap on tariff-free trade in order to allow domestic producers to compete with international ones who face much lower costs.
The EU has now confirmed, and the US are certain to retain their own protections for their steelmakers.
This will damage our sector three times over.
Firstly, it will mean that products will be sent to the UK that may previously have gone to the EU and US.
Secondly, EU and US firms will be able to export products into the UK without having to worry about exceeding their quotas.
Thirdly, our own producers will not be able to grow their own export markets to make up for lost ground, as we will still face dramatic barriers to trade overseas.
By unilaterally removing our own measures, our market will open to import surges just as the sector is beginning to recover from Covid-19 and at a time when our exports to the EU and US will still be subject to tariffs and quotas.
Only two of the 10 largest global steel markets have no safeguards.
We will become the third unprotected steel market in that group, and our steelmakers and steelworkers will suffer for it.
Our sector faces challenges; from spiralling electricity costs and a challenging global marketplace to the challenge of decarbonisation.
But we want to contribute to the fight against climate change and to play our part in levelling up Britain.
At no point has the steel sector asked for Britain to pull up the drawbridge and prevent free trade from occurring.
What we are asking for is the opportunity to compete fairly.
The steel sector benefits from good relations between workers and employers, unions and industry.
We speak with one voice on the safeguard issue, and we plead with the Government to find a way, and if necessary legislate, to prevent this disastrous recommendation taking effect.
We should be clear that removing our safeguards threatens thousands of jobs and the future of our steel industry.
If you want to level up Britain, do not level down our steel sector.