Steel is a primary industry we do need ... standing by and doing nothing is unacceptable, says Ken Mann

As Britain’s steel making crisis escalates – the sector strangulated by a three-sided attack from artificially cheap steel dumping on international markets by the Chinese, a strong pound and outrageously high prices for hedging on commercial energy supplies – the final curtain has been pulled on a metaphorical totem of Scotland’s industrial stage.

At this point, an encore via Scottish Government intervention seems a slim prospect. Meaningful job numbers in the core steel industry here are, effectively, gone. Tata Steel, the Indian owners of the Clydebridge plate mill in Cambuslang, and the Dalzell rolling mill in Motherwell, created little surprise when the loss of all 270 posts across these sites – 225 in Motherwell, where the memory of Ravenscraig persists – was announced earlier this week. 

The writing had been on the wall. The Insolvency Service south of the Border confirmed that general market conditions was the chief reason for the closure of the Redcar Steelworks. SSI UK, its operator, consequently had to be wound-up, although it had originally intended to “mothball” the works; it had already done exactly that during recession, re-opening the doors in 2012 and in the process spending millions in recommissioning its coke ovens and other vital equipment. SSI UK was part of a Thai industrials group.  

Like Redcar, the Scottish works were renowned for the high quality of their specialised output. Tata has also indicated it will mothball. But in spite of the industry’s previous track record in weathering the peaks and deep troughs of economic squalls, the re-start question is a tough ask.

David Cameron indicated he would take up the issue of dumping with the Chinese side of this inequitable triangle during President Xi Jinping’s visit to the UK – ironically, and as intensely debated in the media, a tour focused on securing our future affordable mainstream energy supplies from nuclear sources, part financed and engineered by a Sino/French partnership.

Given the pomp and ceremony and the £40 billion of long-term business deal announcements, you can’t imagine these talks being anything more than a whisper for fear of lifting the convivial veneer over a considerable piece of newer economic expediency.

Needs must, yet steel is a primary industry we DO need; standing by and doing nothing is an unacceptable and unnecessary flipside to the UK/China concordat. Scotland and the rest of the UK is re-emerging as a major high-end manufacturing location, routinely employing thousands of workers in higher value jobs. In order to continue to sustain and increase employment, one element manufacturing needs is cost and supply stability in raw materials.

Admittedly not all of these materials can come from the UK, and international commodity markets can be volatile but it’s clear a degree of control over basic needs is desirable. The same argument is at the heart of concerns by some that the Chinese could have undue influence over our key energy resources. There is a Scottish Steel Task Force, initiated by First Minister Nicola Sturgeon to attempt to secure future opportunity in Scottish steel making. Scottish Government moves to assist employees in the immediate aftermath have already swung into action.

But many of these jobs are as specialised as the products.  Manufacturing, shipbuilding and other (very) broadly similar engineering environments won’t take up the slack in the short-term. Longer-term, skills will be lost. If there is a rising from the dead at some point in the future, who will operate all that expensively recommissioned kit?

Those employees will be looking at their options. Another job within Tata, retrain with a different employer in a related sector, move away, get lucky with an early local job offer at similar money, start a small business – or take often readily available call centre work with the resolve that it’s only for the “interim”. 

The last mentioned does not represent sensible deployment of knowledgeable people who may then slither at gathering pace towards other, perhaps better paid but in reality less economically important occupations.

Looking at a crystal ball, can we allow ourselves the hope of relighting the home fires and bolstering these jobs? Perhaps. Protecting the assets is the first stage – and Tata seems willing for the time being.

That offers time to the Scottish Steel Taskforce to consider the shape of any useful interventions which, remember, will be important to other Scottish businesses and the communities around these mills reliant upon their local business generation and resulting secondary employment. 

There is a precedent for an enterprising outcome. A week ago, the Liberty mill re-opened in Newport, Wales after being mothballed by another Indian-based owner. The 150 staff had been kept on the payroll at reduced rate for two and a half years, but allowed to undertake other employment while awaiting a more stable landscape for their employer’s rolled steel strengthening bars used in a reviving construction sector.

However, with a Europe-wide threat from subsidised Chinese imports, the EU – as a shoulder-to-shoulder economic peer of China – needs to examine reasonable measures to discourage such trading. Otherwise even Germany’s less exposed and more mainstream steel industry will contract and shed workers.

It would also be a visible demonstration of the value to key businesses of continued UK membership.