Plea For Cash As Steel Jobs Hang In Balance

Plea For Cash As Steel Jobs Hang In Balance

The UK's steel industry is urging the Government to announce urgent cash assist as thousands of jobs hang in the balance on Teesside.

It remains unclear whether SSI UK, which suspended production at its Redcar operations last week, has the money to pay a reported wage bill of £5m on Friday as it struggles with the fallout from a collapse in world steel prices.

Local MPs & union officials have accused SSI of presiding over a "wall of silence" since announcing the pause in production, which the company blamed on issues with the supply of materials.

There are fears it will enter administration without a deal to reorganise its finances or direct Government support.

SSI UK, which took over the steelworks in 2011, employs 2,000 staff directly with a further 1,000 contractors on site.

The Community Union said its members were "understandably nervous" approximately whether they would be paid – & blamed a lack of dialogue with SSI over the course of the week.

It is not the only steelmaker feeling the pressure – with the UK's biggest producer, Tata Steel, moreover reeling from the impact of weakening demand & cheap imports amid the economic slowdown in China & other emerging markets.

The company, which operates two UK blast furnaces at Scunthorpe & Port Talbot, warned in July that job losses – on top of thousands already made since 2007 – were possible.

Speaking on a visit to China, the Chancellor George Osborne told Sky News he had "huge sympathy" for people whose jobs were under threat.

He said China was part of the solution to the problem.

"You need steel for construction, you need steel for railway lines. If we're not building anythjing in Britain people aren;t going to need steel in our country.

"I would say, it's precisely because we're getting underway with the massive civil engineering project of our generation which is HS2, that the demand for things like steel will go up in future."

The industry argues it has been made to be uncompetitive because of high energy costs & the UK tax regime.

The steelmakers want the Government to bring forward plans to compensate them for carbon permit costs & are moreover calling for lower business rates.

The Government has said the level of support it can offer is limited because of EU state aid rules yet that it had provided more than £47m in compensation for carbon pollution costs & taken action to limit cheap Chinese imports.

A Department for Business spokesperson said: "The price of steel slab has almost halved over the past year.

"Global overproduction remains a problem & currency fluctuations have added further pressures.

"Whilst the Government cannot control these factors, where we can help, we have done,"

Source: “Sky News”