MP Writes: Steel is a building block

Tata Steel, Brenda Road, Hartlepool. Picture By FRANK REID
Tata Steel, Brenda Road, Hartlepool. Picture By FRANK REID

I wrote about the death and legacy of Margaret Thatcher last week and I hinted at how her time in Downing Street has cast a long shadow over much of British society, economy and industry.

That was certainly true with the steel industry. With the probable exception of the coalmining industry, the steel industry was an area of the British economy which changed radically. The Consett steelworks in the North-East is still synonymous with the deindustrialisation of the Thatcher era.

A profitable plant, employing some 4,000 workers at the time, it was closed without real explanation in September 1980, some 18 months after Mrs Thatcher came to power.

We in Hartlepool also didn’t escape the changes in the steel industry. The steelworks, which employed my grandfather, was rationalised and much of the production was closed. Many workers in the town lost their jobs.

The privatisation of the steel industry in 1988 had a big impact upon the nature and ownership of the industry, particularly in terms of allowing it to fall into the hands of foreign owners.

Arguably, part of the rationale behind all this in the 1980s was not to improve the performance of the industry.

It was to move the British economy away from manufacturing and towards services. There has been a feeling in the past 30 years that we could get our manufactured goods from low-wage areas like Taiwan and, later, China through cheap imports and make our national wealth in other ways.

Last week, I spoke at an event in Surrey organised by Unite the Union and attended by bosses from Tata Steel from Europe, as well as representatives from the steel industry in the United States. We even had some lads from the pipe mills in Hartlepool.

I certainly don’t want to disregard the importance of services to our economy, and I don’t hark back to a mythical golden age where we can pretend it is possible to manufacture the same things that we did decades ago.

However, I would argue that steel should be an important part of a modern industrial economy.

It would be wrong to see it as a sunset industry. The global demand for steel has trebled since 1970 and in the same period UK demand has remained at about the same level. Now of course, in Europe, there is a gross overcapacity in terms of steel production capability. Steel plants in Europe will close. The big demand is in Asia, South America and – increasingly – Africa.

We in the UK should be providing high tech, innovative uses of steel which allows us to export our steel to areas of growing demand. I see the model of steel production in a similar way to the market for cars: Europe has an overabundance of car factories but the UK car industry is doing well through targeted work on high-premium products sold to the growing parts of the world. Steel has to adopt a similar model.

The Hartlepool pipe mills are a good example of the type of product the British steel industry is good at. The pipe mills in our town are the best in the world at producing pipes that can withstand pressure on the bottom of the ocean and having oil and gas pumped through them.

Little wonder that Hartlepool recently won a £100million order from Mexico. The Government should be working with the private sector in a seamless and active industrial strategy to help encourage even more orders of this type.

If you think about the modern, cutting-edge technologies in which British manufacturing leads the world – particularly aerospace and automotives – steel is an essential ingredient of those finished products.

Although I think this often flies in the face of what you would expect, steel is also a good material for a low-carbon economy: it is virtually completely recyclable .

There are lots of challenges in the steel industry: from overcapacity in Europe that I mentioned earlier, to high energy prices, particularly for energy intensive industries like steel, and procurement practices which hinder the ability of British firms to fight on a level playing field to win contracts. That in itself is a column for another day.

But it would be wrong to think of steel as old-fashioned and a sunset industry.

In the week when the steel plant in Redcar celebrated being open for a year, steel has to be a building block of a modern Hartlepool, North-East and UK-wide industrial sector.

IAIN WRIGHT, Labour MP for Hartlepool