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Beg borrow or steel

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January 28, 2025

TLDR: Discussion on the potential future of Scunthorpe Steelworks, owned by Chinese company Jingye, and its impact (2500 jobs) on UK economy, with views from various government, politician, and journalist figures.

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In the latest episode of the New Statesman's podcast "Beg, Borrow or Steel", Kate Lamble hosts a discussion on the precarious future of Scunthorpe's steelworks, the last primary steelmaking facility in the UK. With insights from industry experts and stakeholders, this episode delves into the steel industry’s struggles, government policies, and potential pathways for a greener future.

The State of the Steel Industry

  • Scunthorpe's Steelworks: Once home to three steelworks, Scunthorpe now only maintains its two blast furnaces, Queen Anne and Queen Bess, which are under threat of being mothballed, risking 2,500 jobs. Despite this, production continues as negotiations between Jingye Group and the UK government unfold.

  • Job Loss Implications: Martin Foster, a union representative, emphasized the interconnectedness of jobs, families, and communities tied to the steelworks, noting past redundancies and their emotional toll.

Challenges Facing British Steel

  • Economic Pressures: The episode identifies key challenges affecting the UK steel industry:

    • High Production Costs: It costs approximately $200 to create a ton of British steel compared to $10 in China, making competitiveness extremely difficult.
    • Lack of Investment: Historical underinvestment has hampered modernization, leading to an outdated and inefficient production process.
  • Environmental Goals vs. Economic Reality: The conversation reveals a tension between decarbonization initiatives and the need for economic viability. The steel industry represents over 13% of the UK's manufacturing emissions, prompting discussions on the transition to greener practices.

Transitioning to Sustainable Steelmaking

  • Electric Arc Furnaces: A promising alternative to traditional blast furnaces, electric arc furnaces rely on electricity that can be sourced from renewables. Potential projects are underway in Port Talbot and Scunthorpe, focusing on melting scrap steel instead of using raw iron ore.

  • Concerns over Workforce and Production: Transitioning to electric arc furnaces raises concerns about job security, as these technologies require fewer workers. Critics argue that the shift could lead to increased reliance on steel imports, potentially compromising the UK's industrial capability.

A Political and Economic Crossroad

  • Government Strategies and Economic Policy: Insights from Sam Alvis of the IPPR highlighted the importance of long-term industrial strategies that consider the foundations of the UK economy. He stressed the need for comprehensive planning to address both environmental issues and job security.

  • Political Dynamics: The landscape in Scunthorpe reflects broader electoral concerns. Labour MP Nic Dakin previously lost his seat to the Conservatives, who have now returned to power, complicating the future of steel policy. Both parties are navigating public sentiment regarding job preservation and environmental responsibility.

The Call for a Comprehensive Steel Strategy

  • The Role of Unions and Community Voices: Union representatives express the need for a solid industrial strategy that prioritizes not only steel production but also the welfare of the local community.
  • What Comes Next?: There is a pressing need to establish clearer guidelines for the government's role in supporting the steel industry during these transitions, particularly as it relates to job training and securing investments for new technologies.

Conclusion

The current state of the UK steel industry, particularly centered around Scunthorpe, presents significant challenges intertwined with the urgency of achieving climate goals. As discussions unfold, it is clear that both industry stakeholders and political leaders must collaborate to ensure that the future of British steel is sustainable, inclusive, and economically viable. The episode calls for a more coherent strategy to overcome both the immediate challenges and longer-term transitions that the steel industry will face in the years to come.

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