Steel crisis: UK blocked tougher EU rules amid shoe price rise fears

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The UK blocked tougher EU trade rules to help the steel industry partly because it could have raised the price of shoes for British shoppers, Sajid Javid has said.

The business secretary argued the UK opposed scrapping the so-called lesser duty rule as it would have “cost British shoppers dear”, including an extra £130m a year on the price of footwear – the equivalent of about £4.80 for each household.

A number of EU countries have been trying to get the rule lifted, as it would allow higher tariffs to be imposed on cut-price Chinese steel being dumped on the world market.

The industry, Labour MPs and unions have blamed Chinese dumping for the crisis facing the steel industry, which has led Tata to announce it is withdrawing from the UK, risking tens of thousands of jobs.

During an emergency debate in the House of Commons, Javid said the UK would consider supporting higher tariffs on steel at an EU level and would keep the evidence under constant review.

But he defended the UK’s commitment to the lesser duty rule – a principle whereby tariffs on all industries are imposed at the lowest level possible to deter dumping in trade disputes.

Labour has said scrapping the lesser duty rule in Brussels could allow duties on steel to be lifted much higher.

Javid said: “I hear a lot in this House about ideology but I am interested in one thing and that’s what actually works. Where the evidence shows that tariffs against unfair trade will make a difference without harming British businesses and British consumers, I will always support them.

“The opposition has repeatedly raised the lesser duty rule but it is something that they had no problem with for many years while they were in government. Scrapping the rule would cost British shoppers dear. It would be raising prices on everyday items we rely on. On footwear, the rule saved British shoppers £130m in one year alone. However, I am more than happy to look at ways of specifically helping the steel industry.”

During the debate, Javid was accused by Labour of an excessively laissez-faire approach to the steel industry. He defended the government’s actions and hinted that moves to procure more British steel for defence projects could be announced in the coming days.

On Monday, he raised the prospect of a “co-investment” with a commercial buyer in Tata Steel’s largest plant in Port Talbot, south Wales. Asked to clarify what this meant, he did not rule out an equity investment, which would amount to part-nationalisation.

“The key point is that any co-investment would have to be on commercial terms, investment can take a variety of forms, for example it could be debt,” he said. “But again it’s a demonstration of all the options the government is looking at.”

Angela Eagle, the shadow business secretary, said: “Call it what you like, co-investing, part-nationalisation, temporary public stewardship or sheltering the assets, it’s clear that the circumstances may require the government to do this. They should spare their ideological blushes and just get on with it.”

Asked by Geraint Davies, Labour MP for Swansea West, whether the government would “socialise” Tata’s pension fund, Javid said: “We are looking at all possible solutions.”

Javid has come under particular criticism during the crisis for going to Australia for a trade trip and short holiday at the time of a board meeting to decide Tata’s future in the UK. He has since been to India to discuss options for the sale of Tata’s UK assets with the company.

On Tuesday, Prince William also raised the plight of the British steel industry during lunch with the Indian prime minister, Narendra Modi.

Powered by Guardian.co.ukThis article was written by Rowena Mason Political correspondent, for theguardian.com on Tuesday 12th April 2016 16.42 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010