STEEL CRISIS IS AN EXCELLENT TEST OF OUR PLACE IN EUROPE

JOHN McGURK

You may be forgiven for thinking that the crisis facing the manufacture of British steel has suddenly taken everyone by surprise.

After all, the Business Secretary Sajid Javid even went off to Australia believing that his holiday was more important than a meeting about the future of the Port Talbot works where 15,000 jobs are now at risk along with 25,000 in the supply chain.

The truth of the matter is that steel-making in the UK has been sinking for decades as successive UK governments have failed to provide a strategy for its survival while, more recently, Europe has turned a blind eye to cheap steel imports from China and Russia.

China is now the world’s largest manufacturer of steel, producing 822 million tonnes a year at the last count compared with the USA’s 87 million and the UK’s 12 million.

The country’s steel plants, heavily subsidised by the Beijing government, are deliberately undercutting the market by pumping the stuff out at a 34 dollar a tonne loss compared to everyone else, according to the the trade body UK Steel.

Yet Britain and the EU have sat back and allowed this to happen.

This policy of doing nothing resulted in Tata’s two Scottish steelworks being mothballed last October followed by the closure of a Spanish steelworks in January and now the decision by Tata that it will shut down Port Talbot within weeks unless a buyer can be found.

The Americans acted quickly to protect their steel industry by imposing a 266% tariff on Chinese steel. But that has only made matters worse for the Europeans since more cheap steel has been diverted their way.

Add to this the excessive energy bills which the UK Government has allowed to cripple steel manufacturing costs and surely only one conclusion  can be drawn: politicians either in Europe or at home really don’t care.

While the Scottish Government has been taking much credit for helping to save Tata’s two mothballed steel plants at Dalzell and Clydebridge in Lanarkshire, where 270 jobs are at stake, the re-openIng of both works have yet to happen.

The deal has involved the Scottish Government buying the plant from Tata for as little as £1, thereby avoiding the need for due diligence, and selling it on to the metals group Liberty House who will take on environment and investment costs.

Over time, says Liberty’s chairman Sanjeen Gupta, they hope to build the workforce back to its previous level.

We have yet to see if this rescue will be as straightforward as Scotland’s Business Minister, Fergus Ewing, has suggested.

But Mr Javid, while claiming he will “not rule anything out” in an effort to save Port Talbot, has already ruled out nationalisation even for a short time until a potential buyer can be found.

This contradiction alone makes it difficult to place much faith in Javid’s determination to do “everything he can” to maintain steel manufacturing in Britain.

Steel is essential for any nation’s infrastructure. Buildings cannot be erected; bridges cannot be built; ships cannot be launched; defence weaponry such as tanks, submarines and aircraft carriers cannot be designed.

Is there any manufacturing industry more important?

If Britain remains in the EU, the survival of its steel industry must surely rely on a rescue fund for steel manufacturing throughout Europe along with a plan which enables our industry to compete with China.

If Europe cannot act to protect and enhance such a fundamental and important industry as steel, then those who favour Brexit may well be correct.

When the Ravenscraig steelworks was shut down in 1992, resulting in the devastation of the community around Motherwell, the charge laid at the door of Mrs Thatcher, the then prime minister, was that she didn’t care because steelworkers didn’t vote Conservative.

The same appears to be true today.

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInPin on PinterestEmail this to someone

Feedback

  Comments: 1

  1. Robert Thomas


    As John McGurk points out the immediate cause of the Port Talbot problems is China dumping excess steel production at a substantial loss. But the fundamental problem is that the Climate Change Act, brought in by Ed Milliband and Gordon Brown,has led to UK steel and heavy industry suffering power costs nearly double the EU median and pollution levies far in excess of those in Europe and where the rest of the world pays none. Pushing steel and heavy industry out of the UK is not green; the displaced output is then delivered by countries which utilise far dirtier power than we do. The blame for any closures this time can be laid on the green lobby, Labour and the Liberal’s Ed Davey. It is vital that we stop weighing down UK heavy industry with costs that make it uncompetitive internationally.

    Apropos of which has there been a sillier letter this year than that in the Guardian from assorted greens asking the British Museum to forego donations from BP ? I wonder how many of them drive a car or in a car ? The majority I would guess.

    Robert Thomas.

Letters to the Editor