Statement on British Steel by Johnathan Dudley, National Head of Manufacturing at the national audit, tax, advisory and risk firm Crowe.
The expected failure this morning of British Steel is a very worrying development for the British manufacturing and construction sector in particular and also, on a strategic level for the country as a whole.
The focus in the headlines is for jobs at risk of course, and rightly so.
However, there is a much bigger subtext here in that, unless somebody, government backed or otherwise, picks up the production capacity before it becomes irrecoverable, this will further shrink our country’s indigenous capability to produce steel without even greater reliance of production and supply abroad.
Uncertainty in supplies of steel has dogged our manufacturing industry, off and on, for years. Just a few years ago, there was a worldwide steel crisis caused by steel production being ‘bought’ by the far east, only for it later to flood the market with surplus thereby creating a rollercoaster in prices.
Maintenance of our own production will help to prevent such artificial ‘spikes’ adversely affecting UK industry. Aside from the risk to our manufacturing base at a time when it already faces headwinds caused by the likes of the world economic slowdown, Brexit uncertainty and issues in the automotive industry, there are so many infrastructural projects planned in the UK which will need heavy steel over the next few years.
Apart from HS2, there are projects nationwide to promote more rail and light rail transport; there is a desperate need to build more homes across the country as well as regeneration projects surrounding the Northern Powerhouse and the Midlands Engine.
Contracts have just been awarded to build the next generation of Fleet Auxiliary ships in the UK and the Navy’s new frigate programme is moving off the drawing board too. This is just in the short term, of course. All of the above, and more, will need steel. They will need security of supply and price to deliver on time and to budget.
Years ago British Steel used to have the strapline, ‘British Steel, British Strength’. Maybe it’s a timely reminder to repeat this mantra to those in the corridors of power.