I wish I could say that this is the most inexplicable thing to have happened in my three years leading UK Steel. But far from it. In a Westminster Hall debate this week, Anna Turley MP remembered the closure of SSI steelworks in Redcar, citing “Government inaction, in the face of pleas from parliamentarians, industry and the Community trade union, that left the works in a battle for survival.” Stephen Kinnock MP agreed, suggesting that the closure of the blast furnace and coke ovens in Redcar was “an act of industrial vandalism that led to the loss of a strategic asset for our country.”
Three years later, I am still at a loss as to why this tragedy was allowed to happen. But I sincerely hope there has been some lessons learned.
Very often people (usually government officials) tell me that since then, government have spent more than £250 million in compensation specifically for the steel sector and other energy-intensive industries to help to mitigate energy policy costs. How government targets for UK steel use in public sector projects gives the sector a visibility on steel demand. And how they successfully pressed for the introduction of trade defence instruments to protect UK steel producers from unfair dumping.
Of course I hear and welcome these things. However, the electricity price disparity with our EU competitors continues to be a total additional cost to UK steel producers of around £43 million per year, or around 17% of the sector's net earnings. Government procurement guidelines giving minimum quantities of domestic steel use was a huge step forward, but these guidelines have been open to interpretation by every government department and information sharing is still far too limited.
UK Steel works very hard with government to produce trade remedies instruments to protect our market from dumped steel imports. However, while EU dumping methodology has been reformed and had a big impact in reducing the levels of dumped steel in the EU markets, UK proposals fall short of a modernised regime that can quickly respond to the influx of cheap steel liable to flood our shores. As we get ready to leave the EU, and while Trump’s Section 232 Tariffs on steel and aluminium imports and the ongoing threat of retaliation after retaliation brings on a trade war, the UK finds itself in a very vulnerable position.
Preparing for my Cadillac interview I read a blunt, but fascinating article in Tuesday’s FT by Martin Wolf which begins, and I quote, “The leader of the world’s most powerful country is a dangerous ignoramus.” Not something that I was prepared to say while driving around in classic American automobile, but a view worth noting. Mr Wolf demonstrates this by saying that, “Mr Trump is a “disrupter” without clear objectives.” Adding that, “if he had wanted to rebalance the relationship with China, he would not have withdrawn from the Trans-Pacific Partnership and he would not have assaulted his own allies. He would instead have confronted China with a powerful global coalition. Instead, he has started fights with everybody.”
If you watched BBC Breakfast news this morning you will know that I didn’t get to ride around in a Cadillac. Time prevented the excursion, but I was interviewed standing beside the car, got my picture taken sitting in it, and managed to provide some measured comments about the visiting US President: somewhere between Martin Wolf’s commentary and the statement made by our new Foreign Secretary, Jeremy Hunt – that the UK will be a “dependable ally, a country that stands up for the values that matter to the people of this country and will be a strong and confident voice in the world".
You really couldn’t make it up.