A Analysis - With No Bias & No Jargon

British Steel near collapse in Scunthorpe - what impact could it have?

The announcement last week that British Steel could soon be closing its plant in Scunthorpe was an all too familiar news story.

Thousands of jobs are at risk in the local area, and the calls for nationalisation of the industry have increased. For many in the town, it signifies the collapse of the security that the steelworks provided. The future for many in the town could now look bleak - the news that the company was being put into compulsory liquidation was not a shock, but it will have consequences for the 4,500 workers in the plant who are now uncertain about their future.

The effect of a potential closure will have large ramifications for a town like Scunthorpe. Local businesses will be hit by the lack of investment in the local area. The loss of jobs will mean that many of those made redundant may look elsewhere for employment. The rapid de-industrialisation of the British economy is now seemingly coming to its conclusion, beginning with the closure of the mines in the late 1980s. This precipitated the need for low-skilled jobs; many of the former miners took stints as call-centre workers, shop assistants and other jobs that were not as secure as their previous occupation. For towns like Scunthorpe, the initial outlook is potentially sorrowful - with the loss of jobs and communities being forced apart.

The potential closure of the plant does also raise another question: is steel production still viable in the UK? The harsh reality for towns like Scunthorpe is that its produce can be found at cheaper rates from abroad. The plant is not as efficient and cost-effective, the huge need for steel means that prices will get lower and lower, and cheaper labour may be found elsewhere. 

There have been many calls for the government to intervene and bail out the company. The alternative, that the plant closes down ‘should be unthinkable to us all’ according to the local Labour MP, Nic Dakin. The question for the government is whether or not British Steel presents a viable economic solution, and whether the huge amounts of money needed would be a fruitful investment in the future of the industry. Scunthorpe may well need the money to keep the town thriving, but a long term solution would point to finding better alternatives than the steel plant. The government is attempting to help to find a new buyer, and one that can keep jobs and livelihoods secure.

That is not to say that the government has an easy decision on its hands. Leaving the enormous site in Scunthorpe to rot away could destroy livelihoods - there must be a contingency plan to protect the town’s community which has for so long depended on the large employer. 

The uncertain future of Scunthorpe also pictures a wider image of the managed decline in post-industrial Britain. The future of the British Steel workers if made redundant should not be consigned to the scrapheap, a fate that the area must also be prevented from turning into. British industry is collapsing, as globalisation spreads; we must always remember the consequences of transformation.

 

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