32,000 people work in the British steel industry

“An industry [the steel industry] that has already been decimated over many years. [...] You know, there’s 32,000 people’s jobs at risk.”

Laura Pidcock MP, 8 March 2018

There were 32,000 people employed in the steel industry in Great Britain in 2016. Over half of these jobs are concentrated in Wales, and Yorkshire and the Humber.

Using a narrower definition of the steel industry, which excludes those who work in steel processing, the number of people employed in it has fallen from 320,000 in 1971 to 24,000 in 2016. That’s according to to analysis by the House of Commons Library.

Ms Pidcock’s office told us she was referring to the situation in her North West Durham constituency when she talked about the industry being decimated. Consett, the major town in the constituency, had a steel works with 6,000 employees at its height in the 1960s. 4,000 jobs were lost when it closed in 1980, according to Co-Curate, a community based archive about North East England.

The House of Commons Library lists a number of reasons why the industry as a whole has been declining, including:

• Fewer people are needed to produce the same amount of steel today compared to 1970.

• Other countries now dominate the international steel market (China produced 50% of global steel in 2016, compared to 13% in 1995). Lower labour costs and other overheads mean they can produce steel more cheaply than the UK.

• A lot of jobs in the modern steel industry attract higher salaries and require higher skill levels, but require fewer people overall.

• The rise of the service sector, which accounts for 84% of UK employees.

Are further jobs at risk?

Ms Pidcock’s office told us that UK steel jobs are at risk from increasing tariffs outside the EU or a Customs Union. The Labour Party this week also expressed concern to the government about the the USA signing off 25% tariffs on its steel imports.

Currently, there are no tariffs on exporting British steel to the rest of the EU, as the UK is a member of the Customs Union.

After Brexit, we don’t yet know what tariffs UK companies might face when exporting steel, and this will partly depend on any trade deal the UK negotiates with the EU.

Theresa May has said we will be leaving the Customs Union, which creates tariff-free trade between EU member states and three other countries and sets a common tariff for countries outside. The EU also has trade agreements designed to facilitate trade with a number of other countries, which the UK will no longer be a part of after Brexit.

Under EU State Aid rules, the UK cannot normally use public funds to provide financial assistance to failing companies, as it distorts competition in the EU. Depending on the trade deal negotiated with the EU after Brexit, State Aid rules may no longer apply, in which case the government would have a greater ability to intervene in the steel market if it wished, according to the House of Commons Library.