With the right support, the UK steel industry can have a sustainable future
3 min read
Labour’s Lord Mendelsohn on the need for government to ensure a sustainable future for UK steel.
During a visit to British Steel’s plant in Scunthorpe last year, as I watched the molten steam rise into the sky, the blast furnace manager nudged me and said, “You see that? That is schools, hospitals, roads and bridges – all our country’s needs”. That comment reflected a great deal to me about the remarkable pride, resilience and importance of the UK steel industry, which has faced decades of neglect and decline.
The revitalisation of Scunthorpe’s world-class steel industry shows what a modern, high-tech UK steel sector could look like. Employment and production across the sector have fallen drastically since the 1970s. But steel still provides over 30,000 quality jobs and many more in the supply chain. UK steel is a world-leading innovator and acts as a crucial foundation industry: Port Talbot steel is used by all major UK car makers; Scunthorpe provides 96% of Network Rail’s steel; Stocksbridge and Sheffield steel can be found in one in three aeroplanes in the world. We must safeguard these local industries and communities built around them.
UK steel cannot return to the 1960s or compete at scale with the likes of China. But with the right support, our steelmaking workforce and companies have the skill and ambition to achieve a sustainable future. At the very least we must do better than in places like Redcar, where the local MP Anna Turley and council leader Sue Jeffries have been tenacious in their support for steelworkers, but the government did too little to prevent the devastating loss of 1,700 jobs. This is a question of political will.
We now produce only 39% of steel used in the UK, the lowest level on record. Unfair trade practices must be tackled, but the UK has fallen further and faster than European countries facing similar headwinds. This is unsurprising when we consider that UK steelmakers pay an estimated £1million more per week in electricity costs than EU competitors, and up to 10 times more in business rates. These are self-inflicted wounds.
I held a debate earlier this week in the Lords calling for improved support for UK steel. I was heartened by the contributions of other speakers, and the Minister in response accepted the case for a new ‘sector deal’ for steel. But the next government will need to do much more to address the big domestic barriers – crushing energy costs, high business rates and our falling domestic market share. Without a long-term strategy to boost UK steel’s fundamental business model, the industry will not be able to make crucial investments in new products, energy efficiency, jobs and skills.
We owe a huge debt of gratitude to the steel workforce, unions and businesses for keeping the sector alive and fit for purpose. Workers have taken pay cuts and firms have invested to save production in communities like Port Talbot, Scunthorpe, Dalzell and Clydebridge. It is the duty of those who shape the policy environment to take the next steps and ensure a sustainable future for steel.
Lord Mendelsohn is Shadow Business Minister in the House of Lords
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