The closure of the iconic blast furnaces proves we need an industrial strategy fit for the modern age, says Virginia Sentance
For generations, two blast furnaces shaped Port Talbot’s skyline. This year they are shutting down, threatening 2000 jobs, not to be replaced with an alternative until 2027.
Despite talks with the Government, trade unions, and the steel giant Tata, politicians have failed to ask what truly went wrong with Port Talbot – and why.
Yes, falling prices, global oversupply, increased electricity costs, and an uncompetitive UK business environment are partly to blame, but from the outset successive governments have failed Port Talbot.
Over the past 14 years, the Tories have never developed, or stuck to, a strategy that asked how UK steel could thrive in the decade ahead.
Port Talbot has seen nine Business Secretaries, seven Chancellors, five Prime Ministers, and has been shunted between at least five Whitehall departments.
The steel industry was, throughout this chaos, ignored. And it’s not just steel. Former Business Secretary Greg Clark’s Industrial Strategy Council, designed to insulate his 2017 Industrial Strategy White Paper from political uncertainty and build partnerships with industry, was unceremoniously shut down only four years later following another Conservative leadership change.
Boris Johnson’s 2020 Ten Point Plan for a Green Industrial Revolution centred the UK’s industrial strategy around the net zero transition.
However, it failed to recognise the interaction of sectors’ supply chains, like the importance of home-grown green steel to our wind turbine and electric vehicle goals.
These blunders might characterise our recent past but they do not need to define our future. That’s why business is turning to Labour.
An industrial strategy of today must be long-termist, acting on the generation-defining trends affecting economies today. It must provide certainty that works for industry. And it must take a whole-of-system approach to partnerships, investments and regulation.
The Tories are not incapable of doing this – they simply chose to leave the British steel industry to fail.
Contrast that with what was nearly a textbook case of modern industrial strategy for the UK’s Vaccine Taskforce.Rather than seeking to pick a winner, the government set an ambitious mission. Private sector partnerships were essential. The understanding of the industry was deep, with venture capitalists and research scientists in charge.
Government investment and procurement promises de-risked and drew in private-sector backing. Approvals were streamlined. UK manufacturers were prioritised to secure supply chain resilience. Research and production was enabled at a pace unseen in the industry.
The rollout of the Covid-19 vaccine was deployed with unprecedented success. Britain was, briefly, world leading.
Despite that progress, the Taskforce was recklessly shut down in 2022. So now, the full potential of this approach will never be realised by the UK life sciences industry.
It doesn’t have to be this way. Around the world, other countries are showing that there is a better approach to industrial strategy. President Biden’s legislative package is an industrial strategy that plans for the major changes heading our way across net zero carbon, technological transformation, and care.
It commits to not leaving industry fully to the forces of the market, and instead uses investment and regulation to, in the words of the National Security Adviser Jake Sullivan: “unlock the power and ingenuity of private markets, capitalism, and competition to lay a foundation for long-term growth”.
Germany has long built its strategy and policies around long-term plans like ‘Industrie 4.0’ which focuses on shaping the digital transformation in manufacturing, and ‘Energiewende’’, designed to transition to a low-carbon energy system.
Both have been in place for over a decade and, though not without fault, provide a vital signal to industry, through targets and legislation.
In Britain, we have nothing of the sort today. Instead, we have the sad spectre of Port Talbot.
A different way is possible. Should Labour’s commitment to industrial strategy be pursued in government, Port Talbot’s steelworks might be remembered as the moment we changed course: a cautionary tale, rather than a prediction of the future of British industry.
Virginia Sentance MBE is director of industrial strategy and clean energy at Labour Together
Port Talbot is what happens when governments let industries fail
10
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26.03.2024
The closure of the iconic blast furnaces proves we need an industrial strategy fit for the modern age, says Virginia Sentance
For generations, two blast furnaces shaped Port Talbot’s skyline. This year they are shutting down, threatening 2000 jobs, not to be replaced with an alternative until 2027.
Despite talks with the Government, trade unions, and the steel giant Tata, politicians have failed to ask what truly went wrong with Port Talbot – and why.
Yes, falling prices, global oversupply, increased electricity costs, and an uncompetitive UK business environment are partly to blame, but from the outset successive governments have failed Port Talbot.
Over the past 14 years, the Tories have never developed, or stuck to, a strategy that asked how UK steel could thrive in the decade ahead.
Port Talbot has seen nine Business Secretaries, seven Chancellors, five Prime Ministers, and has been shunted between at least five Whitehall departments.
The steel industry was, throughout this chaos, ignored. And it’s not just steel. Former Business Secretary Greg Clark’s Industrial Strategy Council,........
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