Why we must save our steel
The steel industry on Teesside, where I grew up, has been fighting valiantly to stay alive since my grandfather was employed at the Dorman Long works when I was a little girl.
There was a sickening feeling of déjà vu when Thai operator SSI last week announced that it is halting production at the Redcar plant, only five years after riding to the rescue when Indian giant Tata mothballed it in 2010.
Overshadowed by the VW scandal, and a world away from the centre of power in London, the latest blow to the steel industry in the North-east has received relatively little media attention.
But if this government is, as it claims, serious about supporting manufacturers and creating a Northern Powerhouse, then it must save our steel.
Many in the City are probably labouring under the delusion that UK steel is already anachronistic and irrelevant. Not so.
As engineering body the EEF points out, in 2013 it made a £9.5bn contribution to the econ- omy and had an export value of nearly £5bn. On Teesside, where it has been the mainstay of the local economy since the mid-19th century, it is one of the few sources of well-paid, highly skilled employment: without it, the public sector and the dole queue will loom even larger.
The effect of losing 3,000 steel jobs would be devastating, not just for the individuals and families directly concerned, but also for many other local businesses that depend on their spending power.
There is little the Government can do about some of the challenges facing the industry, such as the strong pound or the state of the Chinese economy.
But there are others that are within its power. Ministers can and should take some immediate steps to help reduce some unfair burdens: tackling them may not be enough, but it would be immoral not to try.
Our industry, according to Steel UK, is forced to pay £130m a year in extra costs due to climate change policies, taking its energy expenses to double those in the French and German industry.
Business rates here are up to ten times higher and new air pollution rules will add another half a billion pounds to costs over the next five years.
One also hopes that George Osborne, who has been hobnobbing in China, did not forget his March of the Makers and managed to raise a few points about that nation’s ‘steel-dumping’ or selling at a loss to prop up its own sector.
The UK government cannot expect Teesside steel to hold its own in the toughest global markets since privatisation in the late 1980s with one hand tied behind its back. Since the Thatcher era, when heavy industry in the North-east suffered terribly, the idea of government subsidies for steel has been seen as anathema.
But it makes no sense to subject our industry to a form of doctrinaire market purism – and to load it with additional costs – when it is up against brutal competition from countries with no such scruples.
Teesside steelworkers like my late grandfather are a proud breed. They don’t want handouts or subsidies, but they do deserve a fighting chance.
Driving off
PERHAPS it loses something in the translation, but Volkswagen’s grovelling to departing chief executive Martin Winterkorn sounds a poor note.
Fellow directors thanked him for his ‘towering contributions’ and for taking responsibility for the emissions testing scandal, an attitude described as ‘illustrious’, no less.
Oh puh-lease. One would have thought he was leaving in triumph, not skulking out after one of the worst company scandals ever.
The hagiography is at odds with Winterkorn’s arrogance and rich personal rewards. his boasting about turning the German automaker into the world’s greatest car company went hand in glove with a jaw-dropping pay package of £11m last year, making him one of europe’s best paid bosses.
No doubt having to resign in this way is a sting to the ego, but 68year-old Dr Professor Winterkorn’s pain may be numbed by a pension pot worth £20.5m, plus the use of company cars.
So let’s not feel too sorry for him. And let’s also remember that corporate scandals, whether they be cheating air pollution tests or rigging Libor, are likely to carry on happening as long as we have chief executives who earn far too much and who have far too little personally to lose if it all goes horribly wrong.
Individual accountability is for the little people, like Libor trader Tom hayes, who received a 14-year prison sentence.
Instead of heaping oleaginous words on Winterkorn, the Volkswagen directors should have reflected on the damage done on his watch to customers and shareholders, the innocent victims of company hubris.