Steeled for disaster
Industry let down by one government after another
Adramatic sculpture resembling an upsidedown electricity pylon has, since last month, been adorning the London skyline. the 35-metre work of art, named a Bullet From a Shooting Star by avant garde artist alex chinneck and erected on the Greenwich peninsula, was produced with steel made at tata’s Scunthorpe plant.
it is an evocative marriage of art and manufacturing – but when you look at many a modern London landmark, from the Shard to the Olympic Park, you are looking at a structure built with British steel.
it is also holding up some of the most famous construction projects in the world, from the Sydney Harbour Bridge that was forged out of teesside steel, to china’s three Gorges dam with hydroelectric parts courtesy of Sheffield Forgemasters.
as the defiant teesside steelworkers’ motto puts it, ‘We Built the World’. But that proud heritage is doing nothing to help the industry from collapsing under a strong pound, cut-throat chinese competition and crushing indifference from Westminster.
as President Xi Jinping is wheeled around London to be wined and dined, his nation’s vast exports are demolishing our steel sector. in the month of September alone, china exported 11m tonnes – almost as much as we sell abroad in an entire year.
‘their sector is supported by their government, they enjoy cheap energy and cheap raw materials, hence they can export at below the market rate,’ says Gareth Stace, director of lobby group UK Steel.
the vast power of the chinese export machine is what the UK’s steel industry – already a shadow of its former self – is up against, with no help and in fact active hindrance from successive governments.
at its peak in 1973, a quarter of a million people worked in steel.
Before the recent 5,000 actual or threatened job losses, those ranks had shrunk to 30,000 – so the industry is on course to contract to a tenth of its former size over four decades. the current conservative government is rightly coming under fire for this – and many believe the sector’s woes date back to the thatcher era.
But steelworkers have also been ill-served by Labour administrations as well as by the Libdems in the coalition. Politicians of all stripes have neglected and denigrated the industry, senior insiders believe – and these are seasoned industrialists, not militant union men. in the case of Labour and the Libdems this was because they were seduced by the vogue for greenery and viewed steel as an outmoded smokestack industry, ripe to be taxed.
in the case of the conservatives, it was because they misguidedly thought extending a helping hand to steel would conflict with free market ideology. as a group, regardless of political allegiance, the metropolitan elite seems to have struggled to care about the plight of male manufacturing workers in unfashionable regions.
the sudden outpouring of sentiment, including by Labour shadow chancellor John mcdonnell, who cited the redcar steelworkers as the reason for his change of heart on supporting the Government’s fiscal charter, comes too late for the thousands who have been made redundant.
Britain’s steel industry – most of which is not UK-owned – is fighting an uphill battle against overseas competitors. Sterling has appreciated strongly in the past two years, making our exports less competitive. along with chinese dumping, this is something the Government can do little to remedy.
But our steelmakers are also forced to pay far more in business rates and green energy taxes than EU rivals. Worse, they also suffer from a negative, laissez-faire attitude from politicians. ‘When i talk to my German counterparts they are aghast when i describe our situation, how the Government relates to us and piles costs on our industry,’ says Gareth Stace, director of lobby group UK Steel. ‘their government views the industry strategically, not in isolation. it is seen as part of a whole, involving suppliers and infrastructure projects. as a consequence, when they looked at renewable energy taxes, they exempted the steel industry from the start.’
Other European governments also set little store by British politicians’ purist free market attitude to steel-making. italy, the EU’s second biggest producer after Germany, for example, took the ilva steel plant into state ownership earlier this year following problems over toxic emissions. the plant is a major employer in southern italy.
the wanton destruction of the UK steel industry will cause damage way beyond the employees directly in the firing line, as companies in the supply chain are hit and valuable facilities are lost.
these include tata’s dalzell facility in Scotland, which is the only plant in UK capable of rolling and processing the steel used in trident submarine.
its closure could mean building our next generation nuclear subs with imported steel. ‘this is not only a crisis for the metals industry but a crisis that goes to the very heart of the UK’s industrial manufacturing,’ says Stephen cooper, head of manufacturing at accountancy firm KPmG.
‘the negative knock-on effects of this for the UK economy cannot be underestimated.’
this week’s job losses should be a wake-up call to politicians that laissez-faire is not good enough – we need to save our steel.