The government has been slammed for failing to tackle “the UK's cripplingly high electricity costs,” which Tata Steel claim have left it no choice but to make 720 UK jobs redundant.
Most of the jobs are being cut from its steel bar-making plant in Rotherham, South Yorkshire, which has been underperforming because of electricity costs “which are more than double those of key European competitors”, it said today.
Tata Steel said it would work closely with affected staff and unions to redeploy them within the group and minimise compulsory redundancies.
Karl Koehler, chief executive of Tata Steel’s European operations, said: “Energy is one of our largest costs at our speciality and bar business and we are disadvantaged by the UK’s cripplingly high electricity costs.
“And while the UK government announced helpful measures to reduce the impact of its high energy taxes a few years ago, these measures still haven’t been introduced.
“We want to play our role in reinvigorating the UK’s manufacturing industry, but increasing imports and high energy costs have further undermined the competitiveness of foundations industries.
“Now is the time for government to act. Foundation industries like ours urgently need a competitive business environment and a government willing to strengthen UK manufacturing supply chains. This would ensure the UK remains an attractive place to invest.
“I realise how distressing this news will be for all those affected, but I am also extremely aware of our responsibility towards the ongoing survival of this business which will continue to employ about 1,500 people in South Yorkshire.”
Yesterday National Grid revealed Britain was on the brink of a winter of blackouts as the country had the tightest power supply margin in a decade. One of the measures it is planning to resolve this is to pay Tata Steel to reduce their power usage.
It is thought this could force electricity costs up even higher, with the head of the Energy Manager's Association Lord Redesdale predicting they could rise by as much as 25 per cent.