The election arms race is on - but what role for Yorkshire steel?

Joseph Ward - ESRC Postdoctoral Fellow, Department of Politics & IR, University of Sheffield

Gregory Stiles - University Teacher, Department of Politics & IR, University of Sheffield

It might be argued that the UK is singularly ill-equipped to implement a ‘defence-led industrial strategy’, or indeed any industrial strategy, in a post-Brexit context characterised by greater regional integration. Indeed, this challenge is made more all the more acute by Von Der Leyen’s Commission ramping up its commitment to a similar strategy throughout the EU.

However, given the historic and contemporary significance of firms such as BAE Systems and Rolls Royce in UK manufacturing, defence might not be the worst place to start. BAE Systems remains one of the largest manufacturers in the UK and the largest defence firm in Europe. Amidst growing pressures around issuance of arms export licenses following IDF attacks on civilians and aid workers in Gaza, indications suggest British defence exports have benefited from the global boost to defence spending, with £70.6 billion of licenses issued in 2022, the highest on record.

Despite the centrality of steel production to the arms industry, this issue has been conspicuously absent from Sunak and Starmer’s bidding war over defence spending. Last week saw Tata Steel reject the latest plan from union representatives to keep the UK’s final blast furnaces at Port Talbot open. Though closure of Port Talbot in advance of the transition to greener electric arc furnaces might be read in terms of modernisation and decarbonisation, uncertainty around the plant also potentially signals the latest episode in the collapse of UK steel, portending another ‘Thatcher-era’ shock of deindustrialisation in an already impoverished area.

Steel also arguably illuminates the contours of the UK’s strange political-economic hybrid in the current moment. Despite the declining competitiveness of the sector, the British state has intervened in steel in various ways over the course of the last 20-25 years due to its strategic significance. These interventions illustrate the ad-hoc approach of successive governments towards industrial strategy, with international conglomerates Liberty and Tata Steel granted repeated subsidies to keep plants open.

This substitutive state model not only pertains to steel, with preservation of a UK government ‘golden share’ in BAE Systems, for example, illustrating the wide variety of means the British state has utilised to protect and preserve the defence industry as a competitive exporter. The example of Sheffield Forgemasters goes further than supporting export-led industry, with the government takeover of the company seen as integral to providing a sustainable source of steel for the supply of Royal Navy ships and submarines.

Placed in the context of the decline of steel and failures of industrial strategy, however, the current politicking around defence spending appears as just that: politicking, not serious policy. The increasing dependency of the UK on imports of core materials and products has heightened the sense of potential vulnerability in the event of conflict with no clear strategic vision on how this vulnerability might be addressed.

Yet by returning to Sheffield and South Yorkshire, once the heart of British steel, we can see the green shoots of a revived industry specialising in highly sought after but niche products. South Yorkshire electric arc furnaces – which use scrap metal as opposed to iron ore – have now produced the high quality steel only thought capable of blast furnaces, required by the aerospace industry. Meanwhile the now nationalised Forgemasters has broken new ground with the industrialisation of Local Electron-Beam Welding, offering the potential for a significant productivity leap in the nuclear sector. 

The role of small-medium sized businesses across these sectors is also vital to consider. Here too, South Yorkshire’s steel industry is reversing the national trend with Rotherham-based MTL Advanced supplying the steel for the UK’s Boxer armoured vehicles, buttressed by government expansion of the programme through the acquisition of a new mobile artillery variant. Meanwhile, the ongoing war in Ukraine has led the UK government to issue a major contract with the William Cook Group, based in Sheffield, to reverse engineer and manufacture Soviet-era tank tracks for the Ukrainian armed forces, alongside the continued manufacture of Challenger 2 tracks also deployed in the war.

For these reasons, and Sheffield’s deep structural and historical connections with steel manufacturing, perhaps it’s time to re-examine the relationship between the University of Sheffield’s own Advanced Manufacturing Research Centre’s (AMRC) links with steel and defence as a central part of SPERI’s work in understanding what the local can tell us about the national.