As Port Talbot’s future hangs in the balance, is propping up the UK steel industry in the national interest?
Adam Marshall, acting director general of the British Chambers of Commerce, says Yes.
Assuring domestic production of steel is vitally important to the UK’s future growth prospects, and to our aspirations for the manufacturing and construction sectors, which are having a hard enough time in an uncertain global market as it is.
While there is nothing wrong with being part of global supply chains, there is something very wrong with losing domestic production and skills in a strategically important industry. If we were to lose steelmaking, we would risk becoming more vulnerable to global shocks, with dangerous consequences across the economy.
Decades ago, we let our nuclear industry slip away, and we must not repeat the same errors with steel. There is a clear case for further government action to protect our steelmaking capacity, as it underpins so much of British manufacturing and construction. Our global competitors would not hesitate on an issue like this, so it is in our national interest for government to act quickly and decisively to find solutions.
Tim Worstall, senior fellow of the Adam Smith Institute, says No.
Neither the economy nor the national interest are aided by the propping up of industries or firms. It is at least theoretically possible that intervention is justified at times of chaos – we’re all rather happy that we still have a banking industry, for example. But a distinction must be made. A company or industry in secular decline must be allowed to decline, or we are drawing resources from more useful pursuits to prop up one on the way out. This makes us all poorer.
When it comes to steel, we must of course support those who lose their jobs. But the closing plants are the blast furnaces. As we all recycle more steel through arc furnaces, this is indeed an industry in secular decline. This has been the case in the West for decades now, and it isn’t going to stop either.
A steel industry? We have one and will continue to do so. Steel workers? Support and retrain, of course. Blast furnaces like Redcar and Port Talbot? Dying technology. Necessary to manage that extinction, perhaps, but no more.