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A strong steel industry would support post-pandemic recovery

Community
Community
24th September 2020

Roy Rickhuss and Ed Miliband penned a joint op ed for The Times about the future of the steel industry in the UK. You can read it here:

Covid-19 is having a devastating impact, not just on the health of our nation but on our economy. The impact has been stark with mass redundancies and rising unemployment levels. But this is a severe sectoral recession too, with some industries hit harder than others and the crisis exposing fault lines in the government’s approach to our vital manufacturing sector.

The prime minister and chancellor should recognise that a strong, sustainable steel industry must be at the heart of the economic recovery. This is the right thing to do, environmentally and economically. The fact is that whether we are building railways, schools or hospitals, a national infrastructure programme will require millions of tonnes of high-quality steel — and the vast majority of this steel can be domestically produced.

Today, with the virus hitting steel demand, it is staggering that our largest steelmakers are still waiting on the emergency loans they need to protect jobs and the future of plants. Despite the fanfare from the government around Project Birch getting finance to our manufacturers, it has provided just one company — Celsa — with emergency funding. There can be no British manufacturing renaissance without support for the backbone of manufacturing — our steel industry — and a proper plan for its future.

British manufacturing faces challenges not just as a result of Covid-19. The sector delivers only 9 per cent of GDP compared with about 20 per cent in Germany. Another problem is our overreliance on foreign exports, which has been brutally exposed by this crisis, with a lack of domestic sources for medical supplies such as PPE and a particular reliance on Germany, China and the United States for our imports.

It’s no coincidence that the leading global economies are the biggest steel producers, with hugely successful advanced manufacturing sectors. Steel is a key strategic industry that supports supply chains for vital sectors of our economy, such as aerospace, defence, automotive and construction. These sectors are crucial to sustaining thousands of highly skilled jobs and to local economies. They are also critical for economic and national security.

There is a wider challenge here too: the future of the steel industry as we tackle climate change and look towards green transformation. It is essential that there is a strategic transition to a decarbonised steel sector that protects British jobs and the industry itself.

Ensuring that environmental considerations are weighted into the awarding of government contracts will be crucial. Contracts cannot be awarded on price alone and, alongside the social benefit to local jobs and communities, the environmental cost must be recognised. Transporting steel from overseas takes much more CO2 and it has often been produced with lower environmental standards.

By importing steel that could be produced in Britain the government is not only harming communities reliant on jobs in the industry but also abdicating its environmental responsibilities. Using British steel is better for our economy, better for our steelworkers and, ultimately, better for our planet too.

At present primary blast furnace-based production is the only way to manufacture certain strategic steels key to the automotive industry and for food packaging. It has a high environmental cost, but if we lose Britain’s primary steelmaking capacity we will still need that steel and will therefore be reliant on importing it from abroad. This is not a green plan.

Rather than wash its hands of the implications of this, the government should provide support for the industry to move from blast furnaces burning coke to greener alternatives such as hydrogen and carbon capture in a planned way — offering them a long-term, greener future while safeguarding jobs and our primary steelmaking capacity.

The government must wake up to the fact the steel industry will be vital to any economic recovery. If the government is truly committed to reducing regional inequalities and tackling climate change it will step in with a long-term strategy that protects jobs, begins to develop the green steel technology of the future and retains this critical British industry.

A multi-union, cross-party campaign, “Britain, we need our steel”, was recently launched to highlight that steel is fundamental to our way of life. Tens of thousands of jobs and the future of many communities depend on the decisions being made in the weeks and months ahead. We owe it to them to make the right decisions for people and planet.

Ed Miliband is the Shadow Business Secretary and Roy Rickhuss is General Secretary of Community trade union. You can read The Times full article here.

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