The referendum result has huge implications for every part of our economy, and businesses from all sectors will be seeking favourable terms in the Brexit negotiations. Last week’s Nissan announcement was fantastic news for the automotive industry but this must not become a game of who can shout the loudest. Our Brexit strategy must benefit everyone.
For steel, the industry is still in crisis as it continues to battle with the challenges of global overcapacity, falling demand and uncompetitive trading conditions. Some progress has been made, but further reductions in steel jobs and production capacity are a very real possibility if action is not taken. The uncertainty of Brexit adds to these challenges.
This week in parliament we secured a debate on the steel industry to ensure tackling the risks to its future remain a government priority. Many of the industry’s asks remain unanswered and the primary importance of the Brexit negotiations cannot mean that other issues fall by the wayside.
Industry proposals to redress the huge imbalance in electricity costs for United Kingdom steel compared with our competitors have so far not been carried forward by the government, and the delay has cost the sector an estimated £20m since June. The government have also not yet accepted the request for plant and machinery to be excluded from business rate calculations, meaning that French and German steelmakers continue to pay up to 10 times less in rates than their UK counterparts. I sincerely hope that the government are considering that ahead of the autumn statement.
One key positive is Heathrow’s commitment to use British steel in the recently approved airport expansion. The same support for local materials must be present in other major construction and infrastructure projects, including High Speed 2 and 3, the new fleet of nuclear submarines and Hinkley Point.
With more than two-thirds of UK steel exports going to the European Union in 2015, it is vital that freedom to trade in the single market is maintained. Steel is also a crucial foundation industry, underpinning the manufacturing sector as a whole which itself relies on single market access, both for the export of completed goods and the import of parts and raw materials. The assurances given to Nissan were positive for the steel industry, particularly as they are the biggest automotive customer of UK steel. However, the automotive sector has a large supply chain and those companies also need the same assurances that they will not be hit by tariffs when we have left the EU. It cannot be the case that the biggest companies who shout the loudest secure special protection.
On Teesside every single one of our boroughs voted for Brexit. I spoke to lots of people during the referendum campaign who were motivated to vote Leave by anger at the loss of our steelworks and the idea, wrongly pushed by the Leave campaign, that inaction in Europe was to blame. They are now looking for the government to be more active in its support for industry and to challenge unfair trading practises by China. When forming post-Brexit trade policies, the UK must implement robust anti-dumping measures to stop the flood of subsidised steel that has devastated the industry in the UK, not push the hands-off attitude suggested by one leading Brexit minister.
Bridging all of this is the need for a long term industrial strategy which supports British industry and manufacturing to be competitive in the global market by creating an environment for investment, innovation and, ultimately, the creation of more highly skilled and well paid jobs. The assurances given to Nissan and the proposal for a 25 per cent government stake in Tata’s UK steel assets are two examples of a more interventionist government prepared to support British industry, which is good to see. It is a marked improvement on their complacency and inaction during the SSI crisis in Redcar; this must be the start of a more proactive approach to industry.
UK steel is still in crisis, but with the right help, its future both nationally and on Teesside can be secured.
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Anna Turley is member of parliament for Redcar. She tweets at @annaturley
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