I want the government to find a means for a new owner or owners of our steel industry to keep open our current plants and to maintain a steel capacity in the UK. There are ways government can and should help bring about a new settlement that offers hope of continuing steel production. Government can and should respond to demands over business rates, energy costs, anti dumping actions and public sector steel purchases.
The Welsh government could give Port Talbot rate relief, as business rates have shot up in recent years. Very high energy costs have been a problem for sometime. The government says it is doing something, but it needs to do more as I have been urging. The EU has taken some action to deal with dumping by Russia and China, but has imposed lower tariffs than some other countries around the world. More allegations of dumping are being investigated. This is entirely an EU competence, so we rely on them for action.
The UK government is working to secure more orders for UK steel works. the large building programmes it has for railways, utilities and property all require substantial quantities of steel. It needs to ensure UK bidders have good access to the possible contracts.
They need to help the management and workforce negotiate with the current owners, Tata, over the terms of transfer of ownership. If no-one emerges for early purchase Tate will face large closure costs, so government can help persuade it to include a dowry with the plants for the new owner which will still leave Tata better off and free of future liabilities.
The problems of our steel industry has led to exchanges over Brexit. What is clear is membership of the EU has not protected our industry, and some EU policies have made the problems worse.
To those who think nationalisation offers a simple solution, I suggest they read the sad history of nationalised British Steel from its establishment in 1967. Government had a bold vision of five new large coastal works to produce and sell 35 m tonnes of steel by the end of the 1970s. They embarked on a huge capital investment programme to construct the plant necessary for the task. The private sector industry they took over produced and sold 27 million tonnes in 1965. Output from the nationalised industry slumped from that figure, despite the large investment in new capacity. In 1972-3 British Steel Corporation produced 25.1 million tonnes, in 1975-6 just 17.2 million tonnes, and in 1978-9 17.3 million tonnes. In the early 1980s a new Chairman concluded he had to plan for just 14.4 million tonnes of output, 59% less than planned output under the investment programme.
Thousands lost their jobs both under the Labour government of 1974-9 and the Conservative government from 1979 onwards. The workforce of 250,000 in the early days of nationalisation became just 50,000 in the early 1990s. Large numbers of redundancies were needed both because capacity had to be reined in so much and because UK steel productivity was well below US and Japanese levels. Bilston, Cleveland, Consett and Corby all had to be closed. There was still far too little work for the five main new coastal facilities which ran up colossal financial losses for taxpayers. The Conservative government decided to keep Ravenscraig open despite advice from the Corporation that they had too much capacity and Ravenscraig had the highest cost base.
Today of course the EU rules on state aids would not allow any government to pay the huge losses successive governments paid for in the 1970s and early 1980s. They would not allow the £2bn of public dividend capital which turned out to be free money for the business nor the large capital write offs which BSC enjoyed in the 1970s.