Tata Steel to announce 1,200 job losses as Chinese Premier flies in

"Save Our Steel?" We've heard this song before, but its absolutely clear that the industry is in serious trouble.

On the day government ministers, unions and company bosses sat down in Rotherham to discuss how to proceed, ITV News learned that Tata Steel - Britain's biggest steel producer - plans to announce 1,200 staff will lose their jobs on Tuesday, at its steel works in Scunthorpe and at two plate mills in Scotland.

ITV News Business Editor Joel Hills reports:

Back in the 1970s, 250,000 people in Britain were busy smelting iron ore and reshaping it into something more useful.

Rivals soon caught up and then learned to forge steel more cheaply and in greater quantity. Today the industry employs 30,000.

Quality became Britain's calling card - now even that doesn't seem to be enough.

The Conservatives privatised British Steel in 1988 but the free market forces that initially transformed the industry now look set to kill it, and steel-makers are knocking on the door of government pleading for state support.


people employed in the British steel industry in the 1970s


employed in the industry today

Only they argue that the market is neither free nor fair.

State owned companies in China stand accused of dumping excess production on the international markets at loss-leading prices.

The British government is accused of pursuing environmental policies that have lumbered native steel-makers with energy bills far heftier than those faced by their European rivals.

The Redcar plant in Teesside is set to close after failing to attract a bidder. Credit: PA

Throw in falling global demand and the strong pound and the outlook is grim.

Tata Steel, Celsa, Sheffield Forgemasters, Outokumpu want a level playing field.

They are looking for compensation and significant cuts to business rates that would cost the government around £1.7 billion a year.

Happily, the Comprehensive Spending Review looms. Unhappily, the government is looking for savings.

The government will have to do something, of course, but generosity should be measured in pounds and pence not in the warmth of the words.

The sense you get is the government is not wildly enthusiastic about the industry's long-term prospects.

The British steelmaking industry employs 30,000 people. Credit: ITV News

China is a formidable rival. Its labour costs are lower, its factories state-of-the-art, its output remarkable.

China produced excess steel capacity of 340 million tonnes in 2014, that’s more than double the EU's entire annual steel demand and almost 30 times the amount of steel produced in Britain.

There's no proof China is selling below cost, suspicion is not enough, the European Commission is investigating.

The government may take the view that it's being asked to back a loser, that however hard Britain tries, China can do it cheaper.

The former Business Secretary, Vince Cable, is a believer in the free market but he told ITV News there is a case for some form of state intervention.

This is not just about saving jobs. More or less everything that is man-made is either made of steel or made using something else that is.

From cars to aircraft to houses to railway lines to power plants, steel is a basic, essential economic building block.

Allowing the British steel industry to shrivel would leave us wholly reliant on imports and a market that China dominates.

That's not necessarily a great place to be although the government seems very relaxed about the prospect of greater cooperation with the People's Republic.

Next week Premier Xi Jinping visits London. The prospect of China building nuclear power stations here is guaranteed to get a mention. The plight of Britain's steel-makers and allegations of dumping may not.