Stressed British Steel Must Not be Allowed to Fail

AS we go to press, UK steelmaking is reeling from the news that British Steel has entered insolvency. Thousands of direct jobs are at risk, and tens of thousands more through the supply chain.

Many in our community are affected, and will be hoping a new owner can be found, saving what is a strategic national asset and setting it on a path towards a sustainable future.

To an extent, the steel industry is a victim of circumstance. Put aside how well owner Greybull Capital has managed British Steel, and producers are still left to deal with high domestic energy prices, the cascade of protectionist measures fomented by US trade tariffs, and the lengthening shadow of doubt cast over potential steel buyers by a never-ending Brexit.

Put all of that aside in search of a silver lining, and there is the Government study from late 2017 that projected UK demand for steel should rise by around £4bn (US$5bn) by 2030. The market is there, and with the Government’s commitment to supporting clean growth, we should expect it to step in if needs be to save what is a foundational industry.

The alternative is that it lets a strategic asset fail, cede security of supply overseas, imports steel with a higher carbon footprint, decimates communities reliant on steelmaking, while paying more in benefits and retraining.

The Government... must stand strong and deliver on its Industry Strategy commitments for greener industry and prosperous communities throughout the UK

While nationalisation is a dirty word for many, and one that political rivals would certainly use to score points against the Government, if the worst comes to the worst, it must stand strong and deliver on its Industry Strategy commitments for greener industry and prosperous communities throughout the UK.

Notably, earlier this year it signalled a desire for a steel renaissance with its investment in a manufacturing research hub led by Swansea University in partnership with industry players, including British Steel, aimed at radically improving the sustainability of steel production and making it carbon neutral by 2040. The stakes are getting higher, but regardless, the support must continue.