Often industries are accused of crying wolf to plead for special measures but today the crisis in our steel industry is irrefutable. Over the last six month this has been vividly illustrated with the closure of Redcar in my own constituency and the uncertainty for workers at the TATA works in Scunthorpe, Lincolnshire. However, we must not make the mistake of thinking this is solely a UK issue. The European steel industry, and more widely the European base metal industry, is also in crisis. Across the continent, from Liège in Belgium to Florange in France to Bochum Germany - sites are closing and our ability to produce steel and other base metals is being lost.
Yet steel and base metal production is vital for Europe. It is a strategic product that is irreplaceable. These products are not just used for industrial production, they are vital components of thousands of products which we own and use on a daily basis, from our telephones, to our cars, to the wind turbines and power-plants powering our lights. Steel was a key element of the second industrial revolution and (along with coal) one of the products that the original European community was formed around. Not only does the steel industry directly provide 330,000 jobs, it also supports millions of jobs in supply chains across the continent and is often a vital piece of the local economy in many EU regions.
Many of Europe's steelworks have been open over 100 years and once lost, it is practically impossible to redevelop and regather the necessary skills and knowledge to re-open a steel works.
It is clear that we need to save our steel and we need to do it now.
But how? Is it not inevitable that our steel manufacturing will be transferred to other regions with lower production costs?
This week in the European Parliament we will be setting out our proposals for solutions to the challenges faced by the EU's base metal industries, with a vote on a report by my colleague and former-steelworker Edouard Martin MEP. Edouard, who is a socialist from the East of France, spent over a decade working in the Florange blast furnace and has written an excellent report based on his extensive professional experience and knowledge. The report offers concrete steps to help achieve what should be our ultimate goal - to provide a fair playing field for European metal manufacturers.
There are many ways in which we can help our industries; short, medium and long term.
In the short term, national governments could offer support to steel producers who are struggling against steel from other regions which is being dumped in the EU, most notably from China. This would not mean simple handouts, but investment in modernising a strategic industry, and would offer support to many towns and cities where steel production is the centre piece of the local economy. It would allow them time to adjust during a period of exceptionally low steel prices. Action to tackle steel dumping could be taken now but as was confirmed to me last week in the European Parliament, the UK government is still blocking key reforms of EU trade defence measures.
The fact that the Conservative Government has cried crocodile tears whilst taking no action is quite simply a travesty and shows that they are more interested in sticking to an unworkable ideology than helping British citizens or industry. The fact they are claiming this is not allowed under EU rules is both false and is an example of the Government's ideological position on state intervention and latent Euroscepticism, while British people suffer.
In the medium term, we should ensure that we utilise public procurement effectively. Major infrastructure projects, such as HS2 or CrossRail, demand huge quantities of base metals. These could and should be sourced as locally as possible, and new EU procurement rules allow the use of environmental and social criteria in tendering. Moreover, we need to learn from the Germans and Swedes about how high energy costs can be distributed to ensure investment in energy efficiency is promoted without jeopardising sites.
In the long term we have to ensure we create a market that is fair. This means ensuring a policy framework which allows European steel manufactures to compete on an even keel with global rivals. For example we need to ensure that any steel that comes into Europe has met the same environmental standards as our producers, if not, it could be subjected to a levy, which acts an equalizing factor. Only by creating such a level playing field will we allow the European steel to thrive without support from the state.
If we let the steel industry fail with production offshored, Europe will be significantly economically weaker and it will continue the unsustainable imbalance in our economy, between manufacturing and service industries. We need action now. This week the European Parliament is setting out its stall, the British Government needs to rise to the challenge and up its game.Suggest a correction