CLIMATE change hysteria doubled with inertia from the EU in dealing with cheap Chinese imports has contributed to the crisis in the British steel industry, an MP has claimed.

David Davies described the statement by India’s Tata Steel that it wanted to sell its loss-making UK business, including plants at Port Talbot and Llanwern, as a “black day” but said there were things that could have been done to help the company.

The Monmouth MP and chairman of the Welsh Affairs Committee led a parliamentary inquiry into the steel industry in Wales following Tata’s announcement in January of more than 1,000 UK job cuts – including 750 in Port Talbot.

Union leaders, Tata management and Business Minister Anna Soubry were among those giving evidence to the committee.

“There has been a worldwide fall in the price of steel as a result of the downturn in the world economy, which ultimately led to a glut of steel on the market,” said Mr Davies.

“Clearly, there is not much that any single government could have done about that. However, there are things that could have been done to help companies like Tata.

“We heard evidence that the Chinese have been selling steel into the EU at prices below which it would be produced, a practice known as “dumping.”

“Yet it took the EU a year to do anything about it and even now the extra tariffs attached to steel are far too low.”

UK companies face paying the highest energy prices in the EU as a direct result of carbon taxes introduced to tackle global warning, Mr Davies added.

He said:

“When the government realised the impact these were having, they brought in a compensation scheme but were forced to get permission from the EU which took several years.

“I suggested to the Business Minister that it is a crazy policy to increase taxes on an industry then try to compensate them for the impact of these taxes. It would be far more sensible to scrap the taxes in the first place.

“She seemed to agree and described the policy as “barmy” but then went on to defend it.

“Carbon taxes are used to subsidise renewable energy schemes, particularly wind farms. I have been told that most of the steel used to make wind farms is imported.

“I repeatedly asked the Minister how much British steel is used by wind farm producers but the government do not have the figures.

“Government policy is to levy huge taxes on British businesses and subsidise companies using non-British products with these taxes.

“We should be able to state that any company in receipt of government subsidies must be required to use British products. This is a point I repeatedly made to the Minister.”

As a former British Steel Group employee in Newport – his first job after leaving school – Mr Davies said he was “very saddened” by Tata’s restructuring decision.

“Politicians of all parties need to think about the impact of carbon taxes on high energy producers in the UK or we are going to lose yet more jobs,” he warned.

The Welsh Affairs Committee held a one-off evidence session on the steel industry in Wales on Wednesday, 10th February 2016. You can watch a video of proceedings here: http://www.parliament.uk/business/committees/committees-a-z/commons-select/welsh-affairs-committee/news-parliament-2015/steel-industry-evidence-15-16/

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