‘Sunset’ thinking hitting steel plans
INDUSTRY: A perception that Yorkshire steel is a “sunset industry” has led to a lack of forward planning on creating a more environmentally friendly future, a think-tank has warned.
IPPR North says there are clear opportunities to attract new investment and wealth by investing in steel, where thousands are employed.
A PERCEPTION that Yorkshire steel is a “sunset industry” of the past has led to a lack of forward planning for how it can forge a more environmentally friendly future, a think-tank has warned.
IPPR North says there are clear opportunities to attract new investment and wealth to the region by investing in steel, where more than a third of the 32,000 people directly employed by firms in the UK are based in the North.
Its report setting out a blueprint for green steel says employers such as British Steel, Liberty Steel, and Sheffield Forgemasters are significant local employers in Scunthorpe, Rotherham, and Sheffield, meaning “northern steel actively underpins much of the local economy in these areas”.
The report sets out a plan for decarbonising northern steel with a £267m-a-year investment, harnessing the potential of electrification, carbon capture storage, and hydrogen technologies.
Author Jonathan Webb says: “A drive towards zero carbon steel would not just protect existing jobs; a modern and competitive industry would also attract new investment that can create new business opportunities, jobs, and wealth within the North.
“To achieve this transformation, significant barriers need to be overcome. The negative perception of steel as a sunset industry persists and this has meant that there is a lack of forward planning for decarbonisation.”
The industry has faced significant challenges in recent decades, the report says, first with deindustrialisation and more recently with attempts to devalue steel through the dumping of steel on the international market.
And at the same time, the high cost of energy for the industry has made it increasingly difficult for it to compete with international and European competitors, who can buy energy at much lower prices.
The think-tank says the lack of long-term strategy from governments and a view that the industry has been stuck in a process of managed decline has reduced industry morale.
Since its peak in 1971, the industry in the UK has seen a gradual decline in jobs from over 320,000 to 32,000 by 2016.
But the report adds: “Despite these challenges, the UK’s steel industry remains a crucial foundational industry and today, UK-based manufacturers produce enough high-quality steel to meet most of the UK’s steel needs.”
There was virtually no mention of steel or similar industries in Rishi Sunak’s Budget speech in March, with the Chancellor’s one reference to the industry describing it as one which brought success to Teesside “in the past”.
And according to the report: “This perception fails to realise the important role steel will play in both supporting the North’s economy and the UK’s wider transition to a low-carbon future.”
And Miriam Cates, Conservative MP for Stocksbridge and Penistone, said the report “rightly highlights the opportunity for decarbonisation to drive a rebirth of the UK steel sector”.
She said: “Not only is it an asset of strategic national importance, but communities such as Stocksbridge in my constituency are quite literally built around the steel industry. Investing in green steel will help the UK to reach our environmental and infrastructure targets, and stand as proof that the levelling up agenda can offer a better and more prosperous future for Yorkshire and the wider North.”
Ed Miliband, a Doncaster MP and Labour’s Shadow Business Secretary, said: “The Government must step up and secure a long-term future for our steel industry.”
The negative perception of steel as a sunset industry persists. Jonathan Webb, author of the report for IPPR North.