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Steel. Scotland needs an industrial strategy for the future not the past.

There are few things more tasteless than people exploiting personal misfortune to make cheap political points. The row about the “shameful” failure of the Scottish Government/ UK Government to protect Scotland’s steel industry (delete as applicable) is a case in point.

Scotland doesn’t have a steel industry. That ended nearly 25 years ago when the Ravenscraig steel mill was axed. Scotland isn’t in this game any more and shouldn’t pretend to be. China produces half of all the world’s steel, and there is no way we could compete with that.

But there is a lingering industrial romanticism that afflicts our politicians when there is a plant closure. They talk as if the last 30 years had never happened.

Once upon a time, Ravenscraig was Western Europe’s biggest producer of strip steel and produced slab for the Dalziel plate rolling mill (which still exists) and the Cambuslang processing plant, which provides specialist steel products for the likes of North Sea oil platforms.

It’s the rolling and processing that is being mothballed by the Indian owners, Tata, with the potential loss of 270 jobs.

This has been caused by a glut of steel on the world market, mostly from China which is largely beyond any government’s control. But this hasn’t stopped both sides in the Scottish independence debate trying to turn this into a constitutional issue.
“So this is what they meant by ‘better together'”, say erstwhile Yes supporters. But the idea that these closures would have been prevented had Scotland voted Yes last year is absurd. Independence wouldn’t have insulated Scotland from world market conditions or resurrected a dead industry.

Equally nonsensical is the idea, touted by the Unionist side, that the Scottish Government should have ordered Scottish instead of Chinese steel for the new £3 billion Forth crossing. We don’t do steel fabrication any more.

Perhaps the Scottish Government could have twisted the arm of Transport Scotland and forced some plate steel into the bridge project, but this would have been tokenism. It wouldn’t have saved the mill from closure by Tata even if EU competition rules allowed such state subsidy.

Kezia Dugdale appeared to suggest that the plants could have been nationalised like Prestwick Airport. But would that be a legitimate use of public money? There is a case for monopoly utilities such as rail to be in public hands, but not random parts of multinational companies. Civil servants can’t run steel rolling mills.

Of course, politicians have to care and be seen to care. 270 jobs lost is a tragedy; any job loss is a tragedy. But more jobs have almost certainly been lost recently in other sectors that don’t receive the same attention; nor do the thousands of jobs that have been lost in retail as the internet has wrought havoc on the high street.

Some 65,000 jobs have gone in the UK offshore oil industry in the last 20 months alone, according to Oil and Gas UK. Not all of these will be Scottish, of course, but we need to have a sense of scale.

You can’t base economic decisions on nostalgia. What Scotland needs is an industrial strategy for the future, not for the past. In fact, any industrial strategy would be a start.

Ideally, a plan for reviving British manufacturing industry would involve the entire UK as the Scottish and English economies have been integrated since the industrial revolution. But that isn’t going to happen.

Industrial strategy went out with regional planning and nationalised industries 30 years ago. Margaret Thatcher and successive governments used revenues from North Sea oil to cut taxes, bolster the UK balance of payments and encourage the growth of a financial services economy largely based in the south east of England.

The priority for the Conservatives was destroying the political power of the trades unions and, since they were based in industry, Margaret Thatcher decided manufacturing was expendable.

Yes, this was industrial vandalism. And the story of North Sea oil is one of epic mismanagement of a natural resource. Clearly, if Scotland had been like Norway, or even the Canadian State of Alberta, it would have built up a sovereign wealth fund of prodigious proportions. But Scotland gave its oil away, and it isn’t coming back.

The Scottish Government needs to develop a knowledge-based manufacturing strategy and, to be fair, there have been serious attempts to do this by both sides of the constitutional fence. Fifteen years ago Labour’s life-long learning minister, Wendy Alexander, tried to get Scotland’s universities and colleges to work together to build a “smart successful Scotland”.

We have more universities in the top 200 than Germany or France. And universities such as Edinburgh and Dundee have been trying to make Scotland smarter. Since Dolly the Sheep was cloned, Midlothian has become a global centre of life sciences while Abertay University in Dundee has made a name in computer games.

Alex Salmond placed too much faith in Scotland’s banks but he also sought to build the renewable energy into an industrial sector. The tide appears to be going out on wave and tidal energy, but these are still important sectors for the future.

The SNP doesn’t have magical powers any more than its Labour predecessors. The question of whether economic development is best in the hands of Westminster or Holyrood is highly complex and largely irrelevant at present. In the absence of a coherent strategy from London – and the Heathrow expansion has confirmed that Scotland is as remote from decision making as ever – Scotland is condemned to going it alone.

Cutting business rates, which seems to have been the SNP’s panacea in recent years, may achieve something at the margins, but there is no way Scotland can replicate Ireland’s “great leap forward”. Instead, Scotland’s knowledge economy needs to be rebooted.

Smart Successful Scotland was on the right lines, but things have changed. The internet is disrupting industries such as retail but it is also creating huge opportunities in areas such as informatics, automation, games and 3D printing.

The priority for Scotland should be modernising our digital infrastructure and somehow bringing broadband to the entire country. Future internet based jobs are going to be footloose, and if they can’t get the bandwidth they can’t do business.

At the other end of the scale Scotland’s ageing population will be a large part of the economy of the future. This needs people, not bandwidth: workers who will come here and do the necessary jobs.

And, like them or loathe them, financial services will remain an important part of Scotland’s economy employing more than 100,000 people. Perhaps if the Government asks nicely they’ll invest some of it in industry

But we mustn’t descend into industrial miserable-ism and defeatism. This country has incredible advantages. For many Scots the referendum campaign was a revelation: they discovered that Scotland was still one of the wealthiest countries in the world. Indeed, many started to wonder why they weren’t getting a piece of it.

Manufacturing is now a relatively small part of this economy, and it needs to be bigger. But a mass steel industry isn’t part of it.

From Herald 22/10/15

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About iain2macwhirter

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