Articles
Whenever large factories and thousands of jobs are on the line, reporting and analysis of industrial issues become emotionally charged. It’s one of the rare times when industrial matters become dramatic enough to warrant rolling 24-hour news coverage.
In the case of Tata Steel UK’s sale, the effect is magnified because the potential impact of the company going under completely is massive. The IPPR think-tank estimates that 40,000 jobs could be lost, 15,000 from the business itself and 25,000 from the supply chain. Coverage has focused on the Port Talbot works, but the “potential divestment” of Tata Steel UK would also include sites at Rotherham, Corby and Shotton.
The job cuts in the steel sector have continued unabated. Tata announced 3,000 job cuts during 2015. In October, 2,200 jobs were lost when SSI announced it was to close its Redcar plant, and 1,700 jobs were put at risk when Caparo Industries went into administration, although most were saved. Around 20,000 jobs are thought to have been lost in the past 20 years. The steady decline of steelmaking in the UK is not a new trend.
But the closure of the Port Talbot works would be a hammer blow to the heart of manufacturing. Strip steel of the type produced at Port Talbot and Llanwern is used to make countless products: body panels for cars, ships, trains, appliances such as fridges, washers and dryers, packaging and construction components. Some have questioned if the UK could call itself a manufacturing economy at all without this basic steelmaking capability.
If large-scale steel manufacturing is allowed to disappear completely there are also hard questions to be asked about the UK’s capabilities in areas such as infrastructure and defence. Construction of HS2 is expected to start in 2017. A new fleet of nuclear power stations needs to be built to ensure the country has enough low-carbon energy. A piece or two of steel may be required for both endeavours.
The impact on defence is perhaps less obvious but nonetheless important. The government strives to maintain British engineering capability for equipment such as fighter jets, submarines and warships, funding research and procurement programmes. Without the basic construction materials to produce these things, what use is the knowledge and expertise about how to make them?
The defence sector is a special case. The knowledge and expertise that engineers have across different sectors won’t vanish instantly if steelmaking ends in the UK, but the long-term effect could be detrimental. The profession already struggles to impress young people about the benefits of careers in engineering, and regard for the value of manufacturing and engineering could slip further down the scale if steelmaking ceases.
The crisis in the industry has been brought into sharp focus by the threat to the Port Talbot steelworks. It’s not clear at the time of going to press where a buyer will be found for Tata Steel UK, or to what extent the government will intervene. It’s also unclear what the overall impact of the loss of steelmaking would be. Regardless, the local and human impact on people’s livelihoods is colliding with national interests, international politics and trade in an emotional way, which will have serious ramifications in the longer term.