Steel losses: The role of government

Almost exactly seven years ago to the day, I was standing outside the steelworks in Llanwern the last time the industry in Wales lost a thousand jobs.

Back then there were very different circumstances as the country dealt with recession.

The response from the government at the time was wrapped up in a more general approach to problems in manufacturing.

Now the response will be far more tailored to the steel industry, and there's likely to be more political blood-letting as the losses have occurred months before an assembly election and possibly before an EU referendum.

Tata's announcement also comes less than a fortnight after the chancellor George Osborne was in Cardiff warning about the dangerous cocktail facing the British economy.

Chinese steel

Many saw that as a warning which, in the context of a possible departure from the EU, would help the cause to remain in as people become wary of change.

The counter view is that, after this hammer blow for the steel industry, voters begin to feel angry with Brussels for failing to tackle cheap Chinese steel imports, and question our very membership of the EU as a result.

The losses will also form the backdrop to much of the campaigning on the economy for the assembly elections.

Carwyn Jones went about as far as he could when he told a news conference that while he didn't want a political battle with Westminster, he also said that the losses could have been avoided if the UK government had acted with more urgency on Chinese imports and the cost of energy.

He'll be looking to tap into criticism of the UK government that it has appeared to be in crisis management on steel, failing to stay ahead of the curve.


The UK government response has been two fold: firstly that it is trying to address concerns over energy and imports, and secondly that this is, above all, a problem caused by over-capacity in the world supply.

In other words, there will always be limits to what any government can achieve in a situation like this.

In the short term, the Welsh government will concentrate on re-training for the hundreds being made redundant.

In the longer term, a debate will get underway in Cardiff Bay about what levels of financial support should be committed by the Welsh government to the steel industry when everyone realises that it is ultimately a bit-part player in the drama that has been unfolding.

Plaid say some form of state-ownership should be considered. Whatever, the proposals, it will always come down to the same question of risking resources on something you can't control.


One final point on the difference now, compared with seven years ago. As bad as things got in 2009, deep down there was always a sense that staff were dealing with vagaries of a cyclical industry.

When I spoke to senior Tata managers last last year, the real concern they had was that this is now the new reality for the industry and it's going to have to cut its cloth accordingly.