Every effort should be made to stop the closure of the UK’s last steel plant, argues Jestico + Whiles director Ben Marston
As a child I spent a lot of time in large steel plants in Sheffield; seeing 300 tonnes of liquid steel pour into moulds in the ground is an awe-inspiring sight.
My father Geoff was a retired graduate recruit from British Steel (then called United Steel) before playing his part buying out the business as Sheffield Forgemasters. He was awarded an OBE for services to export in the steel industry.
There are only now two integrated steelworks left in the country with blast furnaces which make steel from raw materials. Port Talbot makes sheet and other products primarily for the motor vehicle industry while Scunthorpe makes all the heavy product for construction.
The British Steel business that went into liquidation last month is primarily the Scunthorpe plant, and some associated works. It was acquired by venture capitalists who reused the British Steel name. This week the deadline for rescue bids was pushed back till the end of June.
We must retain a balanced economy – it hasn’t done Germany any harm has it? – and that must include the ability to produce steel
Scunthorpe is last remaining producer of heavy steel and blooms, which are made into a wide variety of long products. It is therefore at the core of the construction and heavy manufacturing industry.
Its loss would leave the country without the ability to domestically produce at scale those products that are the mainstay of the construction industry, such as sheet piling, steel beams, rebar, railway lines, merchant bar and so on. All these products would largely have to be imported. Think of the implications in terms of supply, logistics and transport. And of course the lower Brexit pound means higher import costs.
The British steel industry has been in decline for many years – faced with headwinds of globalisation, inefficiencies and climate change. It employed over a third of a million people in the 1970s, but less than 25,000 today, as our economy has become predominantly a service one – which I am myself of course part of.
Perhaps it is my childhood that makes me believe we must fight to retain a balanced economy – it hasn’t done Germany any harm has it? – and that must include the ability to produce steel.
Yet there is an excess supply of steel globally. The UK produces 8 million tonnes of steel per year; China 800 million tonnes. My father notes that British steelmakers pay twice as much for electricity as French producers do, and half again as much as those in Germany. High-energy-use industries also have to meet obligations under European climate-change legislation which makes their products more expensive compared to imports from China and India.
This potential closure has far-reaching implications for the UK construction industry
Steel is a key construction commodity like any other – aggregates, cement or plastics, for example. In theory, as we allow our domestic industry to decline, we can of course simply import steel from elsewhere. That’s globalisation. But few other major developed economies have let their heavy industry become so eroded.
It may be an old-fashioned view, but I believe that strategically, an industrialised country like ours should retain its ability to make its own steel. It surely makes sense that the steel beams we use to construct our buildings and infrastructure come from a steel plant in Lincolnshire rather than one in China.
This potential closure has far-reaching implications for the UK construction industry. If all heavy steel construction products have to be imported, it leaves the market less competitive and more reliant on imports. And another northern town decimated.
Not that it will bother those in the service economy in the south. But it bloody well should.
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