International industrialist and trader Sanjeev Gupta argues that the current steel crisis is a by-product of Britain’s confused attitude towards manufacturing, but he believes we can still turn the tide and give our industry back its mettle.

Let’s face facts: Britain invented modern steel yet a staggering 80% of the 21 million tonnes of steel we consume every year comes from abroad.

That’s right; only a fifth of the steel we need is actually made on these shores. We’re more dependent on steel imports than any of our competitor nations and that situation looks likely to get much worse if we don’t do something about it soon.

Steel is right at the heart of the manufacturing eco-system so, if we can’t make steel competitively here, then we’re far less likely to hold onto industries that make products from this iconic material.

But the reverse is also true. If we can find a way to make steel profitably in the UK, we can not only preserve and increase the number of jobs in the steel industry itself but we can develop a whole host of high-value sectors that feed off this most versatile of metals.

I believe we can do exactly that. We can turn the tide and almost double the amount of steel made here. Based on that we could welcome back many manufacturing industries we’ve lost over the years and we could develop a host of advanced new products based on British metals expertise and innovation. And we could do it all in a green and sustainable way.

Ultimately that would generate hundreds of thousands of new skilled jobs nationwide.

If we’re prepared to reform our steel industry, far more of the coil, plate, tube and bar that goes into our buildings, vehicles and household appliances would originate here and we would tighten our grip on the supply chain that makes end-product manufacturers want to locate here. It’s not all about our labour costs versus foreign competitors. Having a strong native supply chain is even more important to many producers.

So how can we stem the flow and restore the long-lost competitiveness of our steel industry?

Crucially we need to start capturing and recycling the mountain of used steel emerging beneath our feet. A recent University of Cambridge report predicted that the amount of steel scrap generated by the UK economy will soar from 10m to 20m tonnes a year over the next decade.

That’s the equivalent of Hyde Park filled to a depth of 12 feet every year and is equal to what Britain’s total steel industry was making back in its 1970s heyday.

We need to get a proper balance between the amount of brand new steel we make in blast furnaces – currently at uncompetitive prices using imported coal and iron ore – and the amount of scrap we melt in modern electric arc furnaces for recycling and upcycling into advanced products.

Scrap is a low cost, abundantly available ‘raw material’ that we currently waste by sending most of it away for melting in places like Turkey – effectively exporting thousands of jobs. The main reason we do this – and our competitors don’t - is because of our high industrial energy prices.

That’s a core problem we need to fix. Because of the way we structure our carbon tax regime, industry here ends up paying nearly twice as much for its electricity as, for example, the French and the Germans do.

Thankfully that’s an issue the Government is now starting to address so we can realistically start looking at building more of our steel industry on the recycling model, just as the Americans already do very successfully.

Longer term though we need look at how we power our steel industry from green energy, making it both competitive and environmentally sustainable. That means more Government support for renewable sources such as biomass, gasification of waste and, crucially, tidal lagoon power; that huge untapped resource that laps up on our shores each day.

This is what we at Liberty call the ‘GREENSTEEL’ path to restoring the UK steel industry; a strong end-to-end supply chain containing a healthy balance between recycled and new liquid steel, and an integrated network of steel-related industries, each adding value along the way.

Over time the balance would tip more strongly towards recycled steel melted in arc furnaces and, short-term energy price reform would lead on to the development of a transformed industry powered by low-cost green energy.

Liberty is already well ahead on this path. We’ve invested in steel-making and steel processing plants – saving over 1,500 jobs in the past six months alone – and we’ve got advanced plans for power generation from biomass, waste and tidal lagoon.

But for this vision to work for Britain as a whole we need a national strategy for industry; something that’s been missing for a long time. We need a roadmap that allows us to reclaim much of what we have lost during those years when we couldn’t make up our mind how we felt about manufacturing.

Today’s steel crisis is a wake-up call. We are at a crossroads. If we make the right choices now, we’ll not only save the tens of thousands of jobs currently on the line but we’ll open the doors to create hundreds of thousands more.

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