Posted: 23 January, 2017 at 12:36 pm
The All Party Parliamentary Group on Steel and Metal Related industries, of which John Healey MP is a member, has published a report it commissioned into the future of the steel industry in the UK.
The document, titled ‘Steel 2020’, is the product of an inquiry conducted in collaboration with the University of Leeds Business School. Testimony was collected from industry experts ranging from business leaders, R&D specialists, and the workforce, through to the European Commission, international trade body representatives, politicians, and local authorities.
Seven key areas of policy and regulatory reform have been identified, setting out key recommendations for the Government to incorporate into its industrial strategy.
1. A radical reshaping of the energy market to reduce uncompetitive energy costs faced by the steel industry, improving energy efficiency and spreading out the burden of decarbonisation policies.
2. Ensuring free and fair international trade by developing a clear UK post-Brexit trade strategy to minimise uncertainty. This should include trade defence instruments against Chinese dumping, as well as maintaining single market access vital to steel and related sectors such as automotive.
3. A positive procurement policy to ensure domestic steel is used as far as possible in public projects, including enforceable rules and greater use of the ‘Kite Mark’ certification system
4. A national review of business rates, removing the perverse incentives that punish investment in capital by steel producers, while compensating Local Authorities to ensure no loss of income.
5. Supporting supply and value chains within steel and the wider manufacturing sector. The Government should take a more strategic view, incentivising key areas of supply chains to re-shore in the UK so fewer steel products are exported abroad for final processing.
6. For advanced economies like the UK, industry needs constant innovation to improve productivity and remain competitive. The Government must take a strategic role in supporting R&D and upskilling of the workforce, while also ensuring support for skills retention and “short time working” tied to training and up skilling, enabling companies to respond to fluctuations in the market without cutting jobs. The report calls on the government to provide support for investment by creating a National Bank for industry. A Steel Catapult is essential to provide a base for new ideas and the report calls on the Government to override vested interests to support this.
7. A more collaborative relationship between industry and the trade unions, working together to develop a national industrial strategy which includes worker representation on boards. The report also calls on the Government to provide financial support for mothballing in incidents of plant closure and for the workers made redundant to ensure skills are not lost.
The report from the cross party group of MPs representing steelmaking communities offers a blueprint for how the UK Government and the devolved administrations could reshape policy to turn the fortunes of the steel industry around.
Steel is a ‘key foundation industry’ crucial to a ‘renaissance for British manufacturing. It is though at risk from ‘a future of perpetual crisis and decline’ if the trading and regulatory environment is not reformed to allow a cutting edge industry to thrive.