workington

You may think places like Workington and Scunthorpe are big towns – be under no illusions that this story is bad news for their rural hinterlands. It tells us – with a green poison tinge as well – which gets more expression in the next story:

Tata Steel is cutting almost 500 jobs in Scunthorpe, Cumbria and Teeside, blaming a slump in demand across the European construction industry and the cost of green levies.

Announcing the cuts, the company and its biggest union called on the government to do more to support the steel sector by helping with exports and encouraging use of UK steel in building projects.

About 340 jobs will go in Scunthorpe, Lincolnshire, where Tata employs 4,000 workers. Almost a third of the 300 workers at Workington in Cumbria will lose their jobs and 40 jobs will go at Teesside, where Indian-owned Tata, which owns what was once British Steel, employs 1,500 people. The cuts come less than a year after 900 steel job losses, mainly in Port Talbot, Wales. Tata said then that the cuts were part of a plan to cope with terrible market conditions.

Karl-Ulrich Köhler, Tata Steel’s European chief executive, said: “European steel demand this year is expected to be only two-thirds of pre-crisis levels after falls in the last two years. On top of the challenging economic conditions, rules covering energy and the environment in Europe and the UK threaten to impose huge additional costs.”

The financial crisis exacerbated overproduction in the European steel industry. China’s rapidly expanding capacity has also pushed up the price of iron ore, the sector’s main raw material, while putting downward pressure on the price of steel.