UK steel - underpinning our nation's prosperity
Miriam Cates MP and Stephen Kinnock MP - The Times
“As MPs representing steel-producing constituencies, we have always understood the importance of the UK steel industry to our communities. But it has been the major political events of the past 18 months that have illustrated to the entire country the importance of steelmaking to the British economy – from the 2019 election, to COVID-19, climate change and the run up to COP26.
The understanding of what makes a strong national economy is changing. No longer is steel being viewed as a sunset industry. Politicians, academics, journalists and commentators are recognising UK steelmaking for what it is: a 21st-century industry that forms the backbone of our manufacturing sector and underpins our prosperity as a nation.
The Conservatives won the 2019 election on a promise to “level up” Britain, acknowledging that for too many years Britain’s industrial communities have been neglected. For too long our future has been viewed through the lens of cheap imports and hyper-globalisation. Both Labour and the Conservatives now recognise the key role that steel can play in delivering well paid jobs and economic prosperity across the UK.
But steel is about so much more than just jobs. The pandemic has led us to rethink which industries are critical to guarding against economic shocks. Steel is critical to our economic and national security.
After all, every military vehicle built, every major infrastructure project commissioned, and every kitchen fitted and kitted will require steel.
It makes sense for us to want as much of that steel as possible to be produced in the UK, supporting British jobs. It is clear that over-reliance on imports in times of crisis is a real danger.
Then there is the recognition of the vital role of the steel industry in tackling another major global challenge – climate change. Steel will play a critical role in greening our economy by building the electric cars of the future and the technology to harness solar, wind and tidal power.
It is of course far greener to make steel for UK projects here in the UK. Domestically produced steel has half the carbon footprint of Chinese imports, and importing steel thousands of miles means increasing carbon emissions while the UK steel industry is committed to moving further and faster in going carbon neutral. This means that some honourable attempts to do right environmentally can result in an inefficient carbon pricing model, which can only lead to carbon offshoring, reduced investment and steel plant job offshoring, with no upside to people or planet.
IPPR North’s newly published report Forging the Future focuses on decarbonisation within the steel industry and recognises that there will be no zero-carbon economy without a strong low-carbon UK steel sector. Crucially, the report points to the need for a just transition whereby good jobs are retained and workers retrained, warning that “without a clear vision for the industry’s future, there is a danger that the slow death of the industry could level down prosperity and opportunity in places like Scunthorpe, Hartlepool, and Rotherham”. The argument has also been emphasised in recent research by the unions Community and Prospect, and by the Common Wealth think tank. Decarbonisation must be viewed as an opportunity for growth.
Decarbonising the steel sector through changes in production methods will be a challenge and require a significant amount of investment. While some of the cost may be borne by government, steel companies will have to raise significant levels of investment and they will be competing globally for it. This means that Britain needs a plan that can help the sector to thrive.
Boris Johnson has committed to “do everything we can to ensure that we continue with British jobs producing British steel” and has continually argued that being outside the EU allows us to do more to favour the procurement of British steel in government projects. Kwasi Kwarteng, the business secretary, has recently discussed with the Steel Council the need to tackle the UK’s sky-high industrial energy prices that mean UK steelworkers pay 86 per cent more for electricity than competitors in Germany and 62 per cent more than steelmakers in France. Over the past five years that has resulted in an extra £254 million being paid by UK steel companies over and above what their continental rivals pay.
On electricity prices, procurement, decarbonisation with a just transition, and levelling up, the APPG for Steel will be engaging constructively with the government.
There will be no post-pandemic economic recovery without a strong and healthy steel industry. In the long term we need a modern manufacturing renaissance, underpinned by steel, to boost productivity and drive growth — an argument made by the new cross-party Institute For Prosperity.
For levelling up, for security, and for greening the economy, the UK steel industry has never been more important. Britain, we need our steel."
This article was originally published in The Times - April 19 2021