Beg, borrow or steel: the case for saving Port Talbot

Growing up in south Wales, it is hard to escape the past. More than most other tired industrial regions of Britain, there is still a strange nostalgia of days gone by. Heavy industry and manufacturing gave us Tinopolis (Llanelli), Copperopolis (Swansea) and Treasure Island (Port Talbot). Although it is only the latter that has managed to drag itself through economic depression, Thatcherism, and globalisation to the 21st century.

Now, at long last, the day of reckoning fast approaches for Port Talbot’s steelworks. At the start of the pandemic, the plant’s owners Tata Steel pleaded for a £500 million government loan. Then it offered up a £900 million stake in the company to the British state. Whitehall apparently sent in investment bankers to help conjure up a rescue strategy last month. This weekend, the Sunday Times outlined the choice facing steelworkers: a bailout from the Tories or Chinese steel group Jingye. Neither are natural allies of Welsh heavy industry.

As Tata denied it was selling to Jingye on Monday, it left only a Conservative government to act as the saviour of south Wales steelmaking. How times change. Frankly, the politics are of little concern to the 3,500 people employed at the site. Steel is Port Talbot; Port Talbot is steel. It is everything to them. Many steelworkers are second or third generation staff at the plant, which sustains the wider regional economy. Should it collapse, south Wales would face economic catastrophe not experienced since the 1980s.

So why the delay for providing much-needed support? It has been obvious that the pandemic has decimated demand, while the Labour party, led by local MP Stephen Kinnock, has lobbied governments for years to save jobs from disaster. Natarajan Chandrasekaran, chair of Tata Steel's parent company, also warned in January that he was not prepared to continue funding losses. The immediacy of the crisis caused by coronavirus — alongside successive failures by the British government to protect the sector from the dumping of cheap foreign steel — has brought into sharp focus the systemic issues facing Port Talbot and the industry more widely.

There are still looming questions over whether the industry can survive. The Sunday Times noted that ministers are mulling over whether it is worth saving at all. For many, it is a sector fit for the industrial (rather than the technological, digital or green) revolution. Change will undoubtedly be on the way if the government agrees a support package; Boris Johnson's new green energy push could see a compromise with the unions where Port Talbot’s two blast furnaces are converted to electric arc furnaces. This may give the government the environmental reassurance it needs if it's to be serious on its climate goals while supporting jobs.

But this is also an industry on which others critically rely — sectors like aviation, infrastructure, defence, and construction. It is about time that the UK government recognised the strategic importance of the steel industry rather than seeing it is a product of a lost age. If the post-Brexit era is to be one of great renewal, it is only right that Welsh steel forms the scaffolding around which Johnson 'builds back better'.

These are good reasons for the Prime Minister and his Chancellor to save Port Talbot. Yet many sectors need support now and Rishi Sunak has already told us he can’t help everyone. A fair point. Although Downing Street should remember that Port Talbot is an industrial region that has also been left behind; a perfect candidate for its plans to 'level-up' communities long forgotten by London. The boundary of the Red Wall is also nearby, with Bridgend voting Conservative for the first time since 1983. Casting thousands of livelihoods down the drain would certainly lead to the re-drawing of its perimeter at the next election.

In spite of the fact that this government has been generous during the pandemic, it now has an unrivalled opportunity to show its commitment to the steel industry by saving a crucial sector and rescuing a community from economic disaster. Whatever happens, rest assured — just as communities remember what Thatcher did to Welsh coal mines — south Wales will not forget how Johnson and Sunak treat the City of Steel.