WITHOUT Government intervention, Yorkshire’s steel industry will be lost.
Anna Soubry, Minister for Industry and Enterprise, made her second visit to Rotherham this week to discuss our steel mills.
As she was taken around the site, you could see the realisation dawning that rather than being the dying industry the media and “experts” try to portray, our specialist steel is actually a very viable, flourishing business with a global order book.
To give you some context; every plane that flies has steel from Rotherham or neighbouring Stocksbridge in it and we are the world leader in steel alloy manufacture.
The first time Ms Soubry was here was six months previously for the Steel Summit to address how Government could support the industry against the global challenges it faces.
With the Secretary of State for Business, Sajid Javid, she met with MPs, unions, Tata Steel and UK Steel to find a way to safeguard the industry. At the end of the summit we had four key things the Government needed to address to enable the industry to survive:
1. The cost of business rates.
2. A need to address the high energy prices heavy industry are forced to pay. This is subsidised in other EU countries and is one of the biggest expense for our steel.
3. The use of tariffs on imports, specifically, though not exclusively, in relation to Chinese steel which is hugely subsidised and often poor quality. Again, other European Countries take this approach.
4. A commitment to procure British steel for Government funding infrastructure and defence projects.
It has always been particularly painful when we hear of our Navy vessels being made of Swedish steel and the wind turbines offshore from Hull not using the steel manufactured just a few miles away.
Looking to the future, we are commissioning two aircraft carriers and HS2 – that is certainly a lot of steel!
Following the summit, the Ministers gave us assurances that they were taking our requests seriously and would act with the uttermost haste.
Had those promises been true and our recommendations acted upon, we would not now be discussing ways to prevent the steel industry being lost forever.
On Sunday, Mr Javid said the decision by Tata’s board in Mumbai to sell Tata UK was “unexpected”.
I found this comment offensive.
How can it possibly be unexpected when for years Labour MPs have been holding debates in Parliament to show just these consequences if the Government didn’t act?
Let’s be honest about this, Mr Javid’s position has always been an ideological one – leave everything to the market.
But what he fails to understand is that he has been forcing the UK steel industry to compete with both hands tied behind its back.
China’s steel is state-run and massively subsidised, most European companies have heavily reduced energy costs for industry and the US has substantial tariff rates on imported steel, including steel from the UK.
All we have ever asked the Government to do is level the playing field, then we will be able to compete effectively in the market.
While I’m pleased the Minister for Industry now understands what we actually manufacture in Yorkshire (an unkind soul would say she should have known this already), what concerns me is what will happen next.
Tata has confirmed that the sale process will start on Monday and we have been told that they are looking for a sale within six weeks.
This seems unrealistic to me, particularly if we are looking for a responsible buyer rather than someone planning to simply asset-strip.
If this timetable is fixed, what will the Government do to support the industry in the short term if Tata pulls the plug before a buyer is found?
The other big question is this: will Tata sell parts of the business or does it want to sell it as a whole?
The only buyer on the table as I write is Liberty Steel.
How seriously we should take that interest when the owner, Sanjeev Gupta, admitted his takeover plans had been written “on the back of an envelope” is yet to be confirmed?
Going forward we need to be given assurances that the Government does have a long-term strategy for steel and will also intervene in the short-term.
These acts would give confidence to the market and give a breathing space so we have enough time to find a buyer who is committed to making sure the industry flourishes.
The Government also needs to realise that the four actions raised six months ago at the steel summit still need to be acted upon. If they are not, all that will change is the owner, not the fundamental issues that have brought us to this point.
The time for warm words from the Government is over. We need fast, dramatic intervention from them or our steel industry will be lost forever.
Sarah Champion is the Labour MP for Rotherham.