Steel crisis: What are the options?

Specialist engineering and construction recruiter Randstad CPE, say steel crisis must be tackled to prevent industrial skills emergency.

Britain’s Steel Crisis could trigger a wider industrial skills emergency, and must be tackled – say specialist engineering and construction recruiter Randstad CPE.

It was revealed that a total of 94% of specialist engineering workers support some form of action by the UK government, to provide support for Port Talbot and the UK steel industry, enabling it to once again become sustainable and profitable.

In a snap poll of specialist engineering workers, more than a third (35%) believe that the best course of action is to impose tariffs on foreign steel exports, for example those from China, which due to low prices, contributed greatly to the closer of the major UK plants.

The second most popular course of action, with 31% of voters support, is mandating all public projects. Projects in the UK including rail, warship and infrastructure, would only be able to use UK steel, rather than imported alternatives. This would eliminate competition and ensure that the UK steel industry is thriving.

A total of 7% of workers say the best way to save UK steel making is by exempting firms from certain green levies, and a further 7% say that the government should exempt steel firms from business rates if this can ensure the security of the industry.

Other possible courses of action that specialists believe are optional include exempting steel makers from business rates, and the more drastic option of nationalisation, which was backed by 14% in the poll.

There are worries that the steel crisis could face a knock on effect beyond the risks of the 24,000 jobs directly involved in the manufacture of steel in the UK, which could affect millions of other jobs in the wider production sector of the economy.

Owen Goodhead, MD of Randstad Construction, Property & Engineering said: “Jobs and skills simply don’t behave like volatile commodity markets. Once you have a skills shortage, it is here to stay. Steel itself could just be the tip of a terrible iceberg – and the start of a far longer industrial skills emergency.

“Today the price of steel is low because of an error of oversupply on the other side of the world. If that was a permanent factor, we might need to think twice about trying to compete. It is not. But as a result we are talking about permanently shutting down our own centres of global engineering expertise.”

With the UK not currently handling its own scrap, production of ready-to-use steel in the UK is not as high as it could be, with the latest figures showing net exports of scrap steel amounting to 6.6 million tonnes leaving the country every year. Scrap surplus has been looking into as a possible solution, along with reviewing the methods of steel-making itself, currently conducted through oxygen-blown furnaces.

Owen Goodhead concludes: “Steel must be profitable and part of a long-term sustainable economic plan for the industrial skills base of the future. How will we have a car industry without steel, or the aspiration and education that goes along with it? How can we have aircraft carriers without steel? How will oil and gas jobs and rail jobs be sustainable without steel? Or a glittering financial services sector in great steel towers, without steel? How will we have the much-vaunted ‘balanced economic recovery’ without steel?”

 

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