Blair faces new 'Steelgate' row

Mr Mittal is accused of "undermining" UK steel

Tony Blair is under pressure to produce an emergency rescue package to save Britain's tariff-hit steel industry, amid heightened tension over the "Steelgate" affair.

US President George W Bush announced on Tuesday that European steel will face import tariffs of up to 30%.

Mr Mittal is surely not entitled to the support of the British Government as he hammers another nail into the coffin of the British steel industry

Alan Price
Plaid Cymru

Welsh Nationalist party Plaid Cymru has accused Indian billionaire Lakshmi Mittal and his company LMN of "undermining" the interests of the UK steel industry by actively lobbying for the tariffs.

Calls for an emergency rescue package were made in the run up to Mr Bush's announcement of the new levy.

Based abroad

The Steelgate row erupted when it was revealed that Mr Mittal had donated £125,000 to Labour party funds prior to receiving Mr Blair's backing for his takeover of the Romanian Sidex steel plant.

Downing Street insisted the deal was good for the UK, despite the fact that Mr Mittal's company is based abroad.

Opposition parties have called for a full public inquiry into the affair.

Plaid Cymru's Alan Price accused the government of displaying an "almost reckless commitment of effort and resources" to helping Mr Mittal.

"Mr Mittal has told the Times of India that he wanted to make the Romanian plant Europe's main steel producer and that he saw no future for manufacturing in the UK," Mr Price said while leading the party's annual Commons debate.

"Mr Mittal is entitled to his opinion, but what he's surely not entitled to is the support of the British Government as he hammers another nail into the coffin of the British steel industry."

Secretary of State for Wales Paul Murphy dismissed the allegations as a "farrago of nonsense" and said British jobs were not threatened by the privatisation of the Romanian steel plant.

'Act now'

Plaid Cymru's Elfyn Llwyd urged the government to take action to counter the effects of increased US tariffs in anticipation of Tuesday's announcement.

"We need a package of measures immediately to assist the ailing steel industry," he said.

An opposition Commons motion noted "the potentially devastating effect on the domestic steel industry posed by Mittal-inspired steel import tariffs".

It calls for guidelines regarding government support for companies that are also party donors.