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Steel is not a sunset industry – it’s the linchpin of our economy

There is a strategic and economic imperative to back British steel. 

By Stephen Kinnock Stephen Kinnock

The British government has been in a state of denial about the steel crisis, ever since David Cameron moved into Downing Street. They have time and time again failed to act. The steelworks at Port Talbot is the beating heart of my constituency, and in my year in Parliament I have seen a government that has a record of warm words accompanied by absolutely no delivery. It has been a litany of failure.

In stark contrast to the government, the workforce in Port Talbot has always delivered. They have broken production records, and they make the finest steel that money can buy. And this bias towards quality, consistency and added value that we see in Port Talbot is reflected across the entire British steel industry: our steel produces a trade surplus, its investment in R&D, training of employees and productivity are all higher than the norm in the British economy. It therefore has an impact on the wider economy not only through the supply chain of connected industries, but also in terms of skills, employment and demand.

Steel is a not only an economic, but also a social multiplier. Spreading skills, aspiration and employment throughout the area. This is not just the case in Port Talbot, but across Britain as well – the 4,000 jobs at the steelworks in Port Talbot support an estimated 19,000 jobs in the area, and up to 40,000 around the country.

And if that wasn’t enough, steel is a foundation industry – fundamental to the houses in which we live, the offices in which we work, the cars that we drive and the bridges that we cross.

But all of that is now under threat. Earlier this week I flew out to India with Community Union and members of the workforce in Port Talbot for the Tata board meeting on Tuesday. While I was disappointed to discover that Tata intend to sell the Port Talbot steelworks, their decision to sell rather than close the plant means that, if the government act, we can ensure that steel continues to be produced in Port Talbot.

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In the short term we need Tata Steel to hold its nerve and keep its British operations running, whilst a responsible buyer is sought. Once a new owner is in place then we can move forward, get the steelworks back to break even and then, over a longer period, shift it to really operating in surplus again.

Tata have a moral and social responsibility to steel communities and families in Port Talbot and across Britain, and they must co-operate with the unions and the UK government to secure that Port Talbot continues to produce steel.

But just as Tata need to hold their nerve, so we need the government to properly engage. I am glad to see the Prime Minister and Business Sectary returning to the UK from their trips to Spain and Australia. I hope that now they will finally engage, because they have run out of places to hide.

The government must step in to ensure that adequate time is given for a new investor to be found. But there other, equally urgent and important things that they must do. First, they must stop fighting tooth and nail in Brussels against EU proposals to reform trade defence initatives. The EU has sought to give teeth to trade defence rules with plans to remove the existing rule that caps tariffs at 9-16 per cent, but our government have actively campaigned against these changes. Similarly, Cameron has been China’s chief cheerleader for the granting of Market Economy Status (MES), despite the Chinese steel industry being 80 per cent state owned. Granting MES would all but eliminate our ability to impose tariffs on dumped Chinese steel.

So the government must do three things. One, get serious on the dumping of Chinese steel. Action against dumping isn’t about giving British steel an unfair advantage, it is about correcting the market distortions resulting from Chinese dumping. Two, the government must stop undermining the British steel industry in Europe. And finally, they must step up and take action, be it in the form of part nationalisation, soft loans or by guaranteeing bank loans to the steelworks to ensure that there is sufficient time to find a responsible buyer.

My priority is protecting the steelworks in Port Talbot. I don’t care if the steel there has Tata or anyone else’s name on it, because we all know it has Port Talbot at its core. A Port Talbot without steel should be as inconceivable as a Britain without steel. If we are serious about the future of our country and its manufacturing we must do all we can to support the steel industry and Port Talbot in particular. So I will finish with this simple plea, to the government, to Tata and potential buyers: now is the time to hold your nerve, step up and act. Tens of thousands of families across the length and breadth of our country are counting on you.

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