They’ve been forging steel
here since 1866,
it’s one of the oldest steel
manufacturing facilities in the U.K.
But now experts say the threat of a no-deal Brexit
could mean that the safeguards that have
helped prop up prices for British steel could
vanish alongside European union membership.
Steel was vital to Britain’s industrial
advancement in the 19th century.
It helped support the country’s
railways, bridges and buildings.
And in Europe, after the Second
World War, steel played a major role
in the continent’s rebuilding,
both physical and political.
Six European countries, who'd fought
on different sides of the war,
agreed to set aside their commercial differences and
share centralized authority over steel production.
That decision really marked the first step
in the formation of the European Union.
But since the 1950s British government hoped
to nationalize the U.K’s steel industry,
it did not initially sign up to the new
European “club” and only joined much later.
But experts say that it’s European Union
membership that in recent years
has provided bigger benefits to steelmakers,
in terms of propped up prices
and increased employment,
than to any other U.K. industry.
So with Brexit now so close, how
might the British steel sector
react to a change in the U.K.’s
relationship with Europe?
The short answer…
Not well.
In the event of a no-deal Brexit, the percentage
of total U.K. steel exports facing trade restrictions,
including tariffs, could swing from
15 percent to a whopping 97 percent.
Higher shipping and admin costs could total
£70 million, or $92 million, a year for steel exporters.
And let’s not forget President
Trump’s steel and aluminum tariffs
that have separately
threatened the industry.
Basically, the timing could
hardly be worse.
Alex Cross has spent most of his adult life
around giant slabs of molten metal.
He’s the production director at Somers Forge, it's one
of the oldest steel manufacturers in Great Britain.
How many people work here overall?
What’s your total workforce?
There’s around about 120
people who work at Somers.
And while the products may ship
out looking shiny and new,
the furnaces here are
more than a century old.
And at this family-owned firm, that dates back to 1697,
business is booming - despite all that Brexit uncertainty.
It’s turbulent times at the moment, for the
U.K., and to have such a robust company,
with a strong healthy order book into the
future, of course, we’re extremely proud.
Somers produces highly-specialized steel products used
in submarines, ships and right across the energy sector.
We have the capabilities to process a piece
of material that’s over 60 tonnes in weight,
we heat that up to temperatures in excess
of 1,200 degrees, and we have the ability
with our 4,000-tonne press, to
manipulate that steel into a shape
which can prep it for machining
further down the line.
However, many in the steel industry
aren’t equipped to bounce back
from Brexit, Trump and
trade tariffs quite as well.
In 2016, the steel sector virtually crashed,
since then it’s on a steady journey of recovery.
Tammy Inglis is the
Finance Director here.
She admits that U.S. tariffs
have hurt her bottom line,
but a hard Brexit, she insists, could mean
much harder times for many of her peers.
Steel prices I think would fall,
the steel industry would suffer.
Do you feel like you’ve had a partner in
government, in a sense, that's helped you plan?
No, I don’t think we’ve had the
visibility that business needs.
I think because of the way that Somers operates
we haven’t felt the adverse impact of that.
We’ve been through two world
wars, numerous recessions.
I guess to some degree we feel like we are
equipped and experienced to take it on.
Brexit will just be another chapter
in the Somers history book.
But for those companies with a weaker pedigree,
and indeed a weaker cash position,
in an industry that’s already being squeezed,
there's no politician in the U.K.
who can promise Brexit won’t spark significant,
and lasting, damage for the country's steel.
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