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Ministers Agree Steel Support Package


02/01/16


Scottish Government ministers have agreed a £195,000 support package to retain key staff at the mothballed Dalzell and Clydebridge steel plants in the hope production could begin again in 2016. An undisclosed number of staff will be paid approximately 60 per cent of their gross salaries and receive advanced training to ensure the plants could reopen quickly if production resumed.


"It is critical for any new commercial operator intending on restarting production at Dalzell and Clydebridge to be able to get the mothballed plants quickly up and running again after a period of inactivity,” explained Fergus Ewing, the Business Minister.

"So we have agreed to work with the existing management and trade unions to retain and develop the nucleus of a manufacturing team; that will be attractive to prospective buyers, who seek the knowledge and insight to maximise the productive capability of the sites.”

The programme will focus on delivering “learning and development” to those staff with key skills and attributes, which would be required to re-establish manufacturing.

The Scottish Government described its move as a positive development in the quest to secure a future for Scottish steel.


"In the past fortnight I have had positive discussions with Tata Steel Union and Greybull Capital LLP and will meet Greybull in the next few weeks to discuss the future of the Scottish plants,” said Mr Ewing.

"Work goes on in the Steel Task Force to examine ways to reduce costs such as energy use and business rates and ensure all commercial opportunities related to public procurement are visible to interested parties," he added.


The UK steel industry has been hit by the strong pound, falling prices for the commodity and high energy costs. Cheap Chinese imports have been blamed for pushing the situation into a full-blown crisis.


In October, Tata announced it was to lay off some 1200 staff by curbing production at its Scunthorpe plant and mothballing its two mills in Scotland. Some 70 steelworkers were made redundant from the Scottish sites in December and more are set to leave the business this month.

Greybull, a turnaround private equity investor, which rescued the holiday firm Monarch, has emerged as a potential buyer but union sources have raised fears that its business plans do not include the Lanarkshire mills.

However, further reports have suggested there could be two other potential buyers for the Scottish sites; one is thought to be Liberty House, the global steel company.

Union leaders have expressed optimism that as many as 300 workers could end up working at the Scottish plants should talks with a potential buyer succeed.

In response, Tata has said only it is “assessing all strategic options”; a decision is expected later this month.


While both the UK and Scottish Governments have insisted they are doing all they can to help the struggling industry, each has come in for criticism.

Last month, the Commons Business, Innovation and Skills Committee said the Conservative administration had reacted too slowly to help Britain’s steel-makers.

Meantime, Nicola Sturgeon was criticised for failing to raise the steel issue during a trade mission to China in July.

While the Scottish Government stressed how the First Minister had raised a number of economic issues during her visit, it appeared that of steel was not one of them.

The Scottish Liberal Democrats said the SNP’s war of words on the steel crisis was “little more than a cheap facade”