What went wrong?
Source: Sharron Sperry Bloom via Flickr
Port Talbot, Britain’s biggest steelworks, is losing £1m a day. That’s why its owners Tata Steel is set to pull out of all its UK operations, including Port Talbot.
Other steel plants that will be affected by Tata’s departure include Rotherham, Corby and Shotton.
This means a total of 15,000 jobs are at risk.
Prime Minister David Cameron said that the government is “ready to work with Tata” to solve the crisis.
A spokesperson said: “We are working very closely with the industry to look at ways we can help to deliver a long-term, sustainable future,” the spokeswoman said. “There are already a number of steps that we have taken for the steel industry more broadly. We stand ready to work with Tata.”
All said and done, Britain’s steel industry is struggling to keep its head above water. Here are five stats that show the sharp decline in what was once a thriving industry:
1. Massive decline in jobs in the sector
In 1994, the steel industry accounted for over 35,000 jobs. Today, the sector employs 20,000 people out of which one in six are at risk of losing their jobs.
Last year, over 2,200 workers at the country’s second-largest steel producer, Thai firm SSI, lost their job. Also, when Caparo Industries went into partial administration, 1,700 people were left out of work.
2. The value of the industry has declined by 24% since 1990
According to a House of Commons briefing paper, output from the steel industry was £2.5bn in 1990, compared to £1.9bn in 2014. The paper points out that keeping 2011 prices in mind, this marks a 24% fall.
3. Economic contribution
In 1990, steelmakers accounted for 0.5% of GDP compared with just 0.1% today. The recession in 2008 was by far the worst time for the steel industry.
4. Threat from China
A key factor in the decline of Britain’s steel industry is competition from China. Figures from the EU’s statistics agency Eurostat show that EU steel imports into the UK cost on average 897 euros a tonne in 2014 compared to 583 euros a tonne for Chinese steel imports.
5. International overheads
The cost of overheads in the UK has been blamed for the sharp decline in the industry. According to the above-mentioned paper, industrial electricity prices in the UK are more than 50% above other major EU economies.