British taxpayers have been forced to subsidise the very Chinese steel companies that are threatening 40,000 UK jobs, critics say
It comes after revelations that the European Investment Bank has given so-called “soft loans” to China of £80million as part of a climate policy intended to lower emissions.
The astonishing figures include a loan of £40million to one of the world’s worst “steel dumping” culprits, the Wuhan Iron & Steel Corporation.
To add insult to injury Wuhun, the world’s eighth largest steel producer, boasts the Chinese state as its main shareholder. Wuhun is such a prolific steel dumper that it has now been especially targeted by the European Commission, which wants to slap it with 36.6 per cent tariffs.
Just five years ago, however, EU bankers decided to lend it €50million (£40million) to put towards a €207million (£167million) Euro Combined Cycle Plant.
The loan was paid out under the China Climate Change Framework Loan II. The money is supposed to persuade the steel giants to invest in lower emission technology.
Furious critics last night pointed out the irony that the loan was concerned with reducing the cost of power generation while one of the complaints of Tata Group is the high cost of energy associated with its steel production operation in South Wales.
Others asked whether Wuhan would have been in a position to dump steel so aggressively if their energy costs had been higher.
Another Chinese beneficiary of British tax pounds was the Shaogang Songshan plant in Guangdong which, in 2008, received €35million (£30million) in EIB funding in the interests of “improving energy efficiency”.
Former Environment Secretary John Redwood said last night: “This is another example of how British people do not want to see their money spent.
“The EU is supposed to be careful who it lends money to, and lending to a foreign government in order to create competition to British industry is not what we had in mind.”
Simon Boyd, director of Reid Steel and South-west chairman of Business for Britain, said: “We have been exporting British expertise to 140 countries around the world for almost a hundred years, so we know a thing or two about exports.
“This is insane. Already, thanks to our EU membership, we’ve lost control of our trade policy and lack any ability to support the competitiveness of our steel industry.
“Now we learn that the EU has been making loans to state-owned Chinese steel makers, who are then able to sell below cost back into the EU and our UK government has been powerless to intervene as it should have done due to the EU state-aid rules.
“We hand £350million a week to Brussels, that’s money we should spend on our priorities, not Chinese steel.”
Former Trade and Industry Secretary Peter Lilley added: “I never cease to be amazed by the capacity of self-harm by European institutions, particularly when they become embroiled in climate policy.
“We are not allowed to employ noncommercial support to our own industry, yet the EU has been doing exactly that for China.”
UKIP MEP for Rotherham and Scunthorpe Jane Collins said it was “disgraceful” that taxpayers money had been given to put British steelworkers out of employment.”