Opinion: Let's beat the doubters with a confident new dawn for UK steel

Opinion: Let's beat the doubters with a confident new dawn for UK steel

By Chris McDonald, CEO of the Materials Processing Institute

The announcement by Tata Steel seeking bids for two of its Hartlepool tube mills raised the stakes for the industry in our region once again following the terrible loss of the SSI works last year and recent questions around the sale of Tata’s UK-based steel assets.

It will be a worrying time for employees and their families, and some commentators will cite the sales as further proof of inevitable structural decline for an industry that once stamped the legends of North East towns and companies on global icons from Winston Churchill’s Cabinet War Rooms to the Sydney Harbour Bridge.

But whilst we wait to see what potential buyers may emerge, let’s also be clear that the siren voices could not be more wrong: the fundamentals of the tube mill business, its product and its workers, are world class and will maintain their historic profitability with the right leadership.

Indeed, they should be a reminder to doubters that Britain and North East England continues to excel in manufacturing and specialist industries from chemicals to plastics, ceramics and beyond.

It is a critical time then to welcome South Bank-born Greg Clark as Prime Minister Theresa May’s new Secretary of State for Business, Energy and Industrial Strategy.

It is certainly welcome to have a Teessider shaping the focus of the British government’s enterprise policy. More widely, the reshaping of his department offers a new focus on how business-led initiatives can drive down consumption and costs in energy-intensive industries, and for the welcome news that government acknowledges the vital importance of industrial strategy for the success of UK plc.

It is here that Mr. Clark will receive a supportive message from the region’s industrial leaders about the importance of a confident approach and decisive actions. Fundamentally, that starts with government, industry and investors alike being clear that steel remains vital for British economic and national security.

The UK’s newly-invented steels and foundation industries are the “economic enablers” that keep Britain’s advanced manufacturing sectors of automotive, aerospace and rail at the cutting edge of productivity and international competitiveness. The backbone of future success in the fourth industrial revolution.

National media attention has focused on Port Talbot, but wider loss of assets like those in Hartlepool would threaten wider UK industry supply chains and jeopardise British sovereign capability in energy, defence and parts of the Trident replacement programme.

Not risks we need right now as the country embarks on the journey to leave the European Union partners and change terms of access to their markets.

Chris McDonald

So we must all take on the defeatists. After all, who would have argued 30 years ago that Britain’s car industry would once again lead the world? Yet today, Nissan and Jaguar Land Rover are national champions and two of the UK’s leading exporters.

Standard bearers for the skills, experience and productivity of workers and new management in the “Northern Powerhouse” and “Midlands Engine”, their operations are enhanced with components from many of the UK’s 30,000 small and medium-sized enterprises across the metals and materials sector.

This success teaches us that a different strategy led by different owners can deliver different results.

It is here then, to maximize the opportunity, Britain must play its trump card: innovation.

UK metallurgy and materials research is world class and driven by universities from Cambridge to Teesside, expert centres like the Royce Institute and also business, particularly small and medium-sized entrepreneurs who can often be overlooked by civil servants in Whitehall.

Their innovation and inventions are the potentially game-changing opportunities to drive the new products and productivity opportunities that keep British industry internationally competitive ahead of our global competitors.

However, ideas and fundamental research must be unlocked and upscaled to make an impact on the balance sheet. That is why industry and academia alike are asking government to back the proposal for a new enterprise-led catapult for the metals and materials sector.

Supported by the CBI, Federation of Small Businesses and UK Steel too, this government-backed innovation intervention would ensure that world-leading UK ideas and inventions get beyond the concept stage to market, and create profit and new British jobs in steel, alloys, metals like aluminium and titanium, and materials including ceramics, plastics and glass.

Teesside MPs’ case to government from the opposition benches plus James Wharton's positive intervention in the House of Commons in his previous role as Northern Powerhouse Minister offer a quick win for Mr Clark and the new department on behalf of Britain’s foundation industries.

After all, for plants like Hartlepool tube mills, this “Materials Catapult” could drive new innovation to manufacture the next generation of North Sea wind turbines and technology. The theory already exists but government support is needed to reduce financial risk and bridge what industry calls the “valley of death”. That will bring commercial success and support for the nation’s sustainable energy supply too.

Similar opportunities exist for creating new export markets such as selling British specialist steels to China to meet their needs in high speed rail that cannot be supplied by their low quality domestic market. Or elsewhere to upscale and fully exploit exciting new materials like graphene, or to better reuse and recycle valuable metals and critical raw materials in what experts call the ‘circular economy’.

That’s why I’m an optimist. We know that industrial challenges remain but regions like the North East also possess unique skills and facilities to innovate and export our way to success. With the right industrial strategy and a confident approach, we can compete successfully with anywhere else in the world.