Steel strategy – cautious welcome

Steel is a vital product, yet the future of the industry in Britain is continually threatened. The government has recently set up a steel council and launched a steel strategy. This is an opportunity to make changes and secure the industry’s future – but only if high energy prices are tackled.

The publication of a green paper is the beginning of the consultation on the strategy and it follows the announcement in January of a steel council. This council will help steer plans for the industry and will be backed by £2.5 billion of investment – at least according to government.

Welcome

Trade unions cautiously welcomed the launch of the steel strategy on 16 February. Steel union Community said that the green paper set out the main challenges and opportunities for the sector and marked a firm commitment after years of neglect.

Unite the Union was also encouraged by the strategy. Unite general secretary Sharon Graham said, “…[it] is a critical landmark for a foundation industry, whose success is essential to the wellbeing of our economy and our national security.” She called for linking investment to solid job guarantees.

The government lists a dozen priorities. For the trade unions and the companies in the sector, the issue of energy prices is far and away top of the list.

Energy costs

Community said that high energy costs have long been a burden on the steel industry. Action is needed to address the disparity in industrial energy costs between Britain and other producers. Community and Unite are calling for immediate action on those energy costs.

Likewise UK Steel, which represents employers in the sector, put the question of electricity prices as their first comment in their response to the launch of the strategy.

‘An effective steel strategy is impossible without a coherent energy policy.’

The point is simple: unless the government addresses energy costs the strategy will be worthless. An effective steel strategy is impossible without a coherent energy policy to support Britain’s industrial production.

Other “priorities” in the government’s plan constitute a long wish list. These include: financial support; assess the viability of new technologies to produce primary steel; improve scrap metal processing capability; identify market opportunities; protect against dumping by other countries; stimulate demand for domestic steel; make new sites readily available; use Britain’s research and development capabilities to benefit the sector; ensure the sector can attract and retain workers with the right skills.

All are important, although it remains to be seen how the government will go about achieving those aims.

Conflict

But inevitably it gives equal space to green objectives: how the industry will “play a role in the UK’s decarbonisation mission”; and “how to best prevent carbon leakage”. These goals will run right up against and conflict with the necessary calls to fix energy costs. As Sharon Graham said, the strategy is a start, not an endpoint.