British Steel: How Britain can ensure steel and wider industry can best thrive in the future

THE news that the official receiver for British Steel has now entered into exclusive talks with Oyak, the Turkish Army Assistance Fund, will be welcomed across the North-East and Lincolnshire, as well as companies in the supply chain.

Oyak - whose subsidiary Ataer Holding is the largest stakeholder in Erdemir, one of the world’s largest steel producers - looks to be a good fit for British Steel, combining what is known in the industry as “upstream capacity” in the UK transforming materials into steel, alongside Turkish “downstream capacity” processing the end products.

• Turkey's military pension fund to buy British Steel

There seems to be a willingness to invest, with press reports of up to £900m investment in new low carbon technology from the new owners and a potential £300m support package from the UK government.

The role of government in rescuing British Steel, supported by the Tees Valley Mayor, Teesside MPs and trade unions, has been welcome and essential, contrasting with the painful collapse of SSI at Redcar in 2015.

Let us now use this unwanted crisis as an opportunity to ask how Britain can ensure steel and wider industry can best thrive in the future.

Steel is special. Global demand is increasing year on year. Without UK steel, key British industries such as automotive, aerospace and engineering would come to a standstill.

However, in my experience, delivering research and technology to the steel industry across the world, the UK is alone with so many questioning the essential need for industries such as steel and ship building, for economic success and sovereign capability.

This makes life for UK steel makers uniquely difficult as they compete in a global market with competitors supported by their national governments.

For the sake of workers in the foundation industries, the health of our communities and wider economy, we need a new long-term approach.

First, get energy right. A lack of competitive, zero carbon energy makes life challenging for our major industries. Steel, cement and glass, are significant energy consumers, yet users in the UK pay more for electricity than any other EU country, with prices over 50 per cent higher than in Germany and over double that of France.

UK prices should be more equal with European competitors and – crucially - the future for energy must be zero carbon. That means investment in renewables, including exciting new technologies such as hydrogen, where our region has the opportunity to strike an early international technological advantage.

Second, make choices about core industries such as steel and advanced materials. It should be a national priority to invest in technologies that extract and reuse materials within our own economy, creating an environmentally sustainable ‘circular economy’ in metals and materials.

Forward thinking will best protect sovereign capability. New industries like electric vehicle manufacturing, for example, should not be dependent on cobalt for batteries that is extracted through unethical practices and child labour in places such as the Democratic Republic of Congo when we could develop British renewable sources.

Third, support small and medium sized companies in the industrial supply chain. The potential impact of losing British Steel was estimated at 5,000 direct jobs and up to a further 20,000 in the supply chain. Whilst not household names, these smaller companies are generally significant, creating a positive impact in their communities.

Fourth, prepare for the impact of industrial change coming faster than ever before. New technologies are creating a new industrial revolution in automation, artificial intelligence and robotics, that is fundamentally changing the way we live and work. Not only industry, but all of us, will need support in investment, retraining and lifelong skills to adapt to this new world of work.

Fifth – let’s champion the commercial potential of UK industry. In the past five years, as well as working with every UK steel company, just our one not-for-profit innovation institute in Redcar has exported services to the USA, China, India, Russia, Australia and South Korea.

I keep being told about the “sunset” of British industry but give us a level playing field and we will thrive. There are many more firms across Durham and the Tees Valley who can say the same.

As British Steel is on the cusp of rebirth, under new ownership and with a different strategy, it is time for us all to wake up to the opportunities in developing the essential industrial base of our economy. Making it fit for the challenges of the future and ensuring that it can continue to provide the essential infrastructure, goods and jobs that our country needs.