Britain’s Economic Revival Will Be Built on Steel

Why does steel hold such an important attachment in the public eye in a way that other industries and sectors don’t?

Why does it matter so much for the rest of the economy, and what does the future hold?

In plain numbers it employs around 33,000 people directly and a further 42,000 people in the supply chain.

These jobs are highly skilled, with the average salary almost a third above the average national salary overall.

In the ‘Red Wall’ areas of Wales and Yorkshire & Humber the salaries are almost half above the regional average.

These may seem small compared to the many hundreds of thousands employed in sectors such as aerospace and automotive.

But the bare numbers mask a far greater importance.

As a vital foundation industry steel is fundamental to a strong UK manufacturing base and the success of a wide variety of other key, strategic industrial sectors.

It boosts innovation across high-value supply chains, serves as a test bed for the UK’s world-class universities and feeds a pipeline of highly skilled talent that benefits the economy.

Critically, it serves as a hub for industrial clustering and will be essential in ensuring the UK meets its ambitious climate targets.

A strong domestic steel sector helps to maximise the economic value to the UK from every pound spent on major infrastructure projects.

It contributes £2.1billion directly to national output, indirectly another £2.7billion, and £1.7billion to the balance of trade.

Steel will be critical to delivering the Government’s commitment to levelling up, especially through investment in new and upgraded infrastructure projects.

Ministers must look at the bigger picture. Such a vision recognises that steel demand continues to grow, representing an additional £4billion a year opportunity for domestic supply alone by 2030.

In other major developed economies such as Japan and Germany, the sector continues to be strong. Just as it is there, steel production can be part of a highly developed, balanced economy in the UK.

First, the Government can address barriers to investment and make the UK the best place for international steel companies to place their capital investment.

This means removing the eye-wateringly high electricity prices faced by producers compared with their French and German counterparts.

It means embracing UK-made steel wherever possible for domestic infrastructure projects, and driving reform of procurement down the supply chain.

This wouldn’t just benefit steel makers, but the whole economy. Government can also act to counter import surges by extending the UK’s steel safeguards, which are due to lapse in June this year.

These were introduced by the EU in 2018 to prevent being swamped by massive influxes of imported steel. Keeping these safeguards protects jobs and protects the environment as they guard against an over-reliance on imports.

A nation that has a strong industrial base and can regulate its carbon output is a nation that can contribute far more to the fight to protect our planet than one that simply imports steel.

An agenda for a green Britain is an agenda for UK Steel.

 

Storey courtesy of Stephen Phipson, Make UK via ThisIsMoney.co.uk

Image courtesy of Ant Rozetsky via Unsplash