IAIN WRIGHT: Urgent action needed to halt demise of steel industry

Members of the Unite union and Tata Steel workers gather in Parliament Square, London, ahead of a protest calling on the government to help save the UK steel industry.
Members of the Unite union and Tata Steel workers gather in Parliament Square, London, ahead of a protest calling on the government to help save the UK steel industry.

People will have seen the enormous crisis facing the British steel industry at the moment.

Attention has focused on the closure of the SSI plant in Redcar, where something like 2,000 people have lost their jobs.

Ann Soubry

Ann Soubry

People in Hartlepool are also affected by this, not just in terms of people who might have worked at SSI, but in terms of Caparo steel going into administration. This company has a facility in Hartlepool, and 200 people working at the plant face an uncertain future, although it is hopeful at this stage a new buyer could be found.

I chair the Business, Innovation and Skills Select Committee, and this week we held an inquiry into the issues facing the UK steel industry.

We took evidence from industry, unions, MPs and the Government Minister who has responsibility for the steel industry.

We on the Committee were left in no doubt about the gravity of the situation. More than 4,000 jobs have been lost since the summer.

The head of UK Steel said that the industry was “like a patient on the operating table. We are bleeding very quickly and unless it’s stopped very soon we are likely to die.”

Tata Steel, which has a steel pipe mill in Hartlepool, said that the company could not rule out further plant closures and job losses in the light of the crisis.

I’m not suggesting that the Government can wave a magic wand. There are big forces at work.

Overcapacity throughout the global steel industry has meant that steel prices have halved.

It is difficult for anybody to compete at the present time.

However, the UK piles on added costs to steel manufacturers through things like energy bills and business rate valuations.

You have the ludicrous situation where a steel plant might wish to invest in more productive machinery in order to compete more effectively, but would then face an increased business rate bill through enhancement of plant and machinery. No other European country would do that.

Steel companies simply want the Government to help level the playing field for them.

We were disappointed with the Government’s response.

The problems with the industry have been understood for a long time. I like Anna Soubry, the Minister, a lot – I think she’s a breath of fresh air – and I like the way in which she says she wants action rather than warm words.

Yet I’m afraid that warm words is all that the Select Committee and the steel industry really got. No decisive action is taking place.

The Government needs to act fast. We were told on the select committee that the true viability of the British steel industry and the timescale for its survival is being measured in weeks rather than years. Unless urgent action is taken now, a vital industry essential to many parts of British manufacturing as well as communities up and down the country, will be lost forever.