The recent Westminster Hall debate on the future of the steel industry will be a chance for MPs to consider that lies ahead for an industry which has been in crisis for some time. The House of Commons Library has put together an information pack for MPs to bring them up to speed on the headline issues that have appeared in the media, or been discussed in Parliament to date. The Manchester Institute of Innovation Research’s Jonathan Aylen has a few additional pointers for the Members taking their seats on Thursday afternoon.
“The steel industry has been in crisis for the past year. The Thai firm SSI at Redcar collapsed a year ago, despite investment in new technology. This was soon followed by Caparo, a Midlands based firm devoted to finishing steel. Low world steel prices and high UK energy prices were blamed for this turn of events.
Tata Steel put its whole business up for sale, and did sell its Scunthorpe based long products business to a newly reconstituted “British Steel”. Tata wavered over the sale of their Strip Products Business, centred around Port Talbot, only to finally reveal they were in negotiations with Germany’s ThyssenKrupp Stahl business with a view to merge which would include Tata’s efficient Dutch works at IJmuiden.
But all this is being played out against a dramatic background of boardroom rows worthy of Dallas, the TV soap popular in the 1980’s for its business tussles and family feuds centred on power and wealth.
In late October, Tata and Sons – the Indian conglomerate which owns Tata Steel in Europe – summarily sacked its chairman Cyrus Mistry. He was the first chairman of Tata from outside the founding family who took charge in December 2012. But in true Dallas style, Mr Mistry is connected to the Tata family through his sister’s marriage and has influence over a large shareholding in the company that has just dismissed him.
Concerns over the fate of Port Talbot were said to be at the heart of the dispute with the Tata family keen to see the Welsh works retained and modernised. It is also a bitter irony that the discarded long products division centred on Scunthorpe has now returned to profitability and hired more workers under its new owners.”