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Extension of UK steel safeguards

Community
Community
9th February 2021

The three ‘steel unions’ Community, Unite and GMB have come together to call for the extension of the steel safeguards beyond 30th June 2021. The following statement represents the views of the unions’ collective steel sector memberships with regards to the transition review into the UK’s steel safeguard measures.

Collectively, we strongly believe the UK’s steel safeguards must be maintained and extended beyond 30th June 2021, and that failure to do so would be a disaster for the industry, for the environment, for jobs and for steel communities across the UK.

The EU introduced the steel safeguards in July 2018 due to global overcapacity and the threat of trade diversion resulting from the US Section 232 steel tariffs, and in a climate of growing nationalist and protectionist sentiment worldwide. These were compelling reasons then and are even more so today, because the pandemic has devastated global steel demand which means our industry is in a hugely vulnerable state and at increased risk of import surges.

At this critical time for our industry it’s crucial an extension of the safeguards is provided, so we can be sure of protections against serious injury (not least reductions in production, sales and investment), crucial to the sector’s recovery from the impacts of COVID-19, and so we can continue to adapt to changing trade flows and growing international competition. It is, in our view, inconceivable, that a government committed to supporting British industry and building back better and greener would choose to leave our steel sector unprotected, when it is increasingly likely that the EU and the US will maintain their own defences. A decision to unilaterally drop our safeguards would lead to the resumption of the increase in imports seen prior to the introduction of the EU measures.

We know that EU member states are pushing hard for an extension of the EU safeguards, and they are supported by our trade union colleagues across the European steel sector. The European trade union federation for steelworkers, IndustriaALL Europe, is currently lobbying the Commission not only to confirm an extension of the safeguards, but also to increase their scope and retain them for an indefinite period of time.

We firmly believe that our steel industry can have a bright and prosperous future, but this will require decisive action from government to enable us to compete on a level playing field. Extending the steel safeguards is vital if we are to compete, and we consider there should be no doubt that taking this crucial action is in the UK’s wider economic and public interest.

Indeed as representatives of workers in various steel consuming manufacturing sectors, including engineering and construction, we have a responsibility to take an holistic view of the safeguards measures and the balance of interests of our members. In this context we are firmly of the view that the negative impacts on the steel sector of allowing the measures to expire would wholly outweigh the potential impacts on steel consuming sectors of extending the measures. We understand the tariff free quotas allow for significantly higher than historic levels of imports to enter the UK tariff free, and that there is significant additional steelmaking capacity in the UK. In these circumstances it would only be if imports were to grow significantly higher than historic levels that any tariffs would apply – and even here the impact on prices and overall manufacturing costs would be negligible.

Conversely, a unilateral removal of the measures would have a devastating impact on steel production and jobs in the UK. Our steel industry directly employs more than 32,000 workers, and twice as many again in the supply chain and local communities. Steel jobs are high quality jobs with good terms and conditions, each of which can pay 50% more than the regional average. These steel jobs drive and sustain local economies, and are the foundation of the supply chain for other strategically important sectors including automotive, aerospace, construction and defence.

The steel industry is concentrated in areas of the country where employment opportunities can otherwise be limited, including the North East, Yorkshire and Humberside and South Wales. Every year the industry provides hundreds of young people with apprenticeships, quality training and career pathways, and is a vital source of private sector investment.

Steel is, in short, of critical importance to steel communities, local and regional economies, and our national manufacturing base, and has a crucial role to play in advancing the government’s levelling up agenda. It’s also important to reflect upon the costs of inaction, and we need look no further than the collapse of the SSI steelworks in 2015 when thousands of jobs were lost overnight and the impacts are still being felt throughout the community.

Recent research published by Community found that only two thirds of SSI workers that lost their job were able to find new full-time work, and 18% took two years to secure any employment. Furthermore four in five workers reported earnings of £30,000 a year or more while employed at SSI, whereas just over one in three did so for their new jobs. It is not surprising therefore, that many workers reported that the closure of the steelworks had led to serious financial stress, with some even losing their family homes. Workers also reported a deterioration in their physical and/or mental health, relationship breakdowns, and a loss of identity as the heart was ripped out of their communities. Despite the tens of millions committed by government to retraining and job support schemes, a lesson from SSI is that when a steel business closes those high quality jobs are not easily replaced, and the knock on impacts can be devastating in communities that can least afford them.

It must also be recognised that a sustainable domestic steel industry is vital to achieving our climate change objectives. In the coming years rebuilding our economy and developing the industries of the future, like offshore wind and electric vehicles, are going to require millions of tonnes of steel. There are huge opportunities ahead for our industry, but realising those will require the commitment of all stakeholders. Either we make the steels here, with all the jobs and prosperity that can bring, or we import them from countries like China that are not subject to the same environmental standards.

We submit that the case for an extension of the steel safeguards is clear, and that continuing to protect our industry from threats related to global overcapacity is vital for the environment, for the steel sector, for jobs and for industrial communities across the UK. These considerations are of such importance that they must far outweigh any potential marginal negative impacts to steel consumers elsewhere in the economy.

Alasdair McDiarmid, Operations Director, Community

Harish Patel, National Officer, Unite

Ross Murdoch, National Officer, GMB

About the Steel Unions and this statement:

The workforce of the UK’s steel sector is represented by the three ‘steel unions’, Community, GMB, and Unite. The three unions work closely together to advocate the views of steel workers right across the country, with a primary aim of ensuring a positive and sustainable future for our members, and their families and communities. A critical component of this is delivering the best possible business environment for steel companies to operate and prosper in. With the UK now having full control of its own trade policy, an increasingly important element of this is ensuring a global level playing field for industry through the effective and legitimate use of trade remedies measures.

Together, we are campaigning for the future of our industry. Sign the petition here.