As I See It
Has Holyrood played its part in the demise of steel?
The steel industry in Scotland has 45 days to save itself. Short of a buyer (Jim McColl anyone?) coming forward to buy the assets, it looks like we will be counting down the days until the gates are locked.
Scottish business minister Fergus Ewing is now leading a task force announced immediately after Tata made its decision. The speed of the statement being issued, with details of the committee membership, shows that the Indian company’s verdict on the future of the Clydebridge and Dalzell works was expected.
Government support in these circumstances is obviously welcome, but it is potentially hopeless. Tata has tried and failed to find a buyer. The circumstances it faces – high electricity costs, currency exchange etc – will also trouble another owner.
European rules – notwithstanding the benefits outlined by the CBI today – are another negotiating issue, particularly in matters of state aid.
Mr McColl, who bought the Ferguson Shipyard and is in the process of reviving commercial shipbuilding on the Clyde, has not commented on any potential interest, although he has committed previously to sourcing local materials.
Another potential route could be to refocus steelmaking around recycled material which avoids the high costs of blast furnaces and has a plentiful supply. A Welsh steelmaker is thriving after moving into this sector.
The Scottish Government, while acting in the interests of Scottish workers, is not wholly guiltless in the demise of the industry. It will not be lost on those 270 workers about to be jobless that the same administration handed one of the biggest steel contracts in the country – 37,000 tonnes for the Forth Crossing – to companies in Shanghai, Poland and Spain.
China is accused of flooding Britain with cheap steel, its UK ambassador claiming that the problem is inefficient UK plants, while avoiding the issue of state subsidy.
However, how can EU members Poland and Spain manufacture steel for the Forth and Britain cannot?
The issue is high electricity costs made worse by the UK’s commitment to climate levies. While the aim of the levy is laudable, it does little to help Britain’s industrial competitiveness and because of the need to import steel it actually negates the gains in carbon footprint.