Any future for the steel industry?

Submitted by Matthew on 8 February, 2017 - 10:57 Author: John Cunningham

I was born in a steel town – Stocksbridge, about 9 miles west of Sheffield. The steelworks were huge and employed at its peak 6,500 workers. The sirens which marked the start and end of shifts, the roar of furnaces, the clanging of shunting trains and machinery, were constant background noise to my early years.

However, as the poet W H Auden once wrote, “The past is another country”. On my infrequent returns to my birthplace I am always struck by how the place has changed. An eerie quiet hangs over everything now, and the river, which once had the colour of oxtail soup and an indescribably vile stench, is remarkably clean. Steel is still produced — although vast acres of the site (now part of the Tata group) stand empty and silent and only about 600 workers are employed in total. I have been told that of the remaining workforce none actually come from Stocksbridge. They all travel in from outside. It is a story which can be repeated up and down the country.

In 1971, the steel industry employed 320,000. Today that figure stands at around 18,000. The recent closures at Redcar and the ongoing uncertainty about the future of steelmaking in Port Talbot are constant reminders, if any were needed, about the precarious position of what is left of the UK steel industry. It is a depressing picture and it was therefore not with any great expectations that I opened the report by the All Party Parliamentary Group on Steel and Related Metal Industries: Steel 2020: Forging a Future for the British Steel industry.

The report is certainly important reading for anyone concerned for the future of the steel industry and the steel communities’ remaining jobs, but there is a sense that we have been here before something that the use of irritatingly stupid jargon such as “catapult” centres and “reshoring” cannot disguise. Central to the report is its condemnation of the dumping of Chinese steel in the UK. Put simply, the Chinese produce so much steel that they cannot sell it via the usual market mechanisms. It is sold at a knockdown price so that Chinese producers get some kind of return.

The writers of the report wax indignant about this “illegal” policy (as if the Chinese authorities are going to lose any sleep over this!) and call for a “level playing field”. A more feeble and useless response couldn’t be imagined — one of the aims of all capitalist enterprises is precisely to create an uneven playing field and the Chinese with their state-directed enterprises are no exception.

In the past the role of the Chinese was played by the Japanese. I remember well a steelworkers’ rally in Stocksbridge in the late 1970s when the Regional Secretary of the then Amalgamated Union of Engineering Workers (AUEW), George Caborn (father of former Labour MP Richard Caborn), thundered on in his inimitable Stalinist fashion about the “Japs” dumping their steel in the UK and calling for tariffs to protect “our” jobs. It went down well, in fact it raised the roof but the result was to deflect from the urgent need for the various steel unions and the plants up to unite in a single workers’ response to the threats of closure.

But the steel unions (notably the ISTC — Iron and Steel Trades Confederation — and the AUEW) never developed a united response and left each plant to fight individually against closure — a hopeless situation which led to inevitable defeat and demoralisation. On a smaller scale this is roughly what is happening today. energy There are calls in the report for a much needed reduction in energy costs — steel production uses huge amounts of electricity. On a wider point the UK does not have a national energy policy and the report wisely calls for a 10 year energy plan. A reduction in business rates is also advocated citing the case of Port Talbot, where £200 million was spent on a new blast furnace which resulted in business rates shooting up. The response of Tata was to lay off 400 workers.

Research and Development, as the Report states, lags behind many other steel producing countries and this has been a long-standing problem in the UK. Tata, it is noted, has centralised its research facilities in the Netherlands Over everything hangs the spectre of Brexit. What, for example, happens to the European Emissions Trading Scheme? Currently 52% of the UK’s steel exports go to the EU.

What is going to happen to this? Or what about the 12% that is exported to the USA; Trump’s protectionist inclinations may make this unsustainable. Although the drop in the value of the pound is good for exports, it has also raised the cost of raw materials: coal, coke, ore, and energy. The report calls on the government to secure the best possible access to the Single Market, but the UK might not even be in it! The government is also urged to make steel a priority in future Brexit talks; But there is no indication that it is listening or that it gives a toss about the steel industry. There is no mention of the renationalisation of the steel industry, although it is difficult to see how many of the measures advocated by the Report can be co-ordinated and implemented without it. Tata or Corus are interested in their profit margins and not much else.

In the late 70s and in the 80s there were attempts, some of them by militants in the steel industry associated with the forerunner of this newspaper, to formulate a workers’ response to the crisis in the steel industry (a National Action Committee was formed for a time). Although it is late in the day, steelworkers in alliance with local people and Labour Party activists can still come together and try to work out a united, UK-wide workers response. This Report provides some much-needed information and some of its recommendations are desirable, but there is no strategy here. As far as I am aware the government has yet to respond to the report and, I for one, am not holding my breath.

• The author worked at the British Steel Corporation, Corby [1969-71] and Hadfields, Sheffield [1976-78]