LibLink: Vince Cable on industrial strategy

Vince Cable has been writing at CommentCentral under the headline: Industrial strategy is vital to boosting growth. He bemoans the closure of blast furnaces in Port Talbot and Scunthorpe.

He says:

The closures seem to be a mockery of the optimistic story about a future based on green jobs since the closures are prompted by a wish to move the industry onto a less energy and carbon intensive (and more modest) footing, using electric arc furnaces to turn scrap back into steel. The government is putting in £1 billion to help finance the transition.

But critics point to a dearth of constructive ideas for the industry. Britain produces 10 million tonnes of scrap steel a year, less than a third of which is currently recycled (the rest being exported and recycled elsewhere), so why are there no plans to boost domestic production? Why are there no plans to use hydrogen as a reducing agent in updated blast furnaces making use of Britain’s resources of offshore wind to generate ‘green’ hydrogen through electrolysis? Where is the strategy?

He compares the UK with countries such Japan, China, Germany and Israel and praises their industrial strategy.

After a brief flurry of free market discipline, the Coalition was soon forced into reactive intervention to stop large factory closures. I decided to launch a comprehensive, sector based, industrial strategy. Conservative colleagues went along with it, some reluctantly. There was positive engagement from business – and trades unions – and in sectors like vehicles, aerospace, life sciences and creative industries. there were industry-wide strategies that were acted upon.

To my pleasant surprise, Theresa May kept and developed the industrial strategy, under Greg Clark. It couldn’t last. With Boris Johnson came ‘f**k business’ and also pathological short-termism (though Dominic Cummings managed to get the DARPA ‘moon-shot’ project launched). Truss and her free-market fundamentalists like Rees Mogg and Kwarteng had no time for ‘industrial strategy’.

Sunak seems to be going down the same path. In contrast Labour is keen to give industrial policy a central position.

He concludes:

I like to claim that industrial strategy was one of the Lib Dems’ big but unsung achievements in the Coalition government. But industrial strategy depends on shared, cross-party ownership. In that spirit, I would like to see Jeremy Hunt using his Autumn Statement to give his support to industrial strategy as part of his programme for boosting growth.

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  • Jenny Barnes 17th Nov '23 - 4:21pm

    ” Britain’s resources of offshore wind”
    Harvesting ” Britain’s resources of offshore wind” will take a LOT of steel to build the windmills. I understand that recycled steel is often of lower quality that new steel made from iron ore due to the inclusion of impurities like copper from crushed cars. So ideally much of the steel for these wonderful windmills will be new. Oh, it seems that wind power is not so cheap these days.

  • Steve Trevethan 18th Nov '23 - 10:05am

    Interesting ideas!

    Might our party have done more for our country if it had not given so much power to the Conservative at or even before the start of the coalition?

  • Reports are the Conservatives have identified a ‘spare’ £10bn due to the economy doing better than they expected. It seems their idea of prioritising economic growth is to spend it on tax cuts, not real investment in UK industry and infrastructure, okay £10bn is potentially only one out of the circa ten new nuclear power stations we need – to keep the lights on, but we have a very simple choice spend that money on importing pylons (just one example) from China, or recycle the steel already in this country and create jobs…

    Having an industrial strategy would seem to differentiate the LibDems from the Tories…

  • Peter Hirst 25th Nov '23 - 4:26pm

    reusing spent steel seems a core part of any circular economy. Presumably you can mix used with fresh steel to maintain its properties. For a true circular economy or zero waste it needs to be planned and if we can use local people in it so much the better.

  • @peter – it seems the issues are to do with trace elements/metals, controlling the composition of steel produced from ore seems to be easier/cheaper than doing the same with scrap steel. For general purpose steel such as car body panels and white goods this isn’t really a problem, as you note currently scrap is mixed with fresh steel, but for more demanding applications it can present problems.

    From my studies of recycling, the issue is primarily one of monetary cost: recycling requires investment and more work, therefore prices will have to be higher and thus be uncompetitive… In the race to the bottom, the implications of ever lower prices are to be put to one side and dismissed as someone else’s problem.

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