Throwing money at British Steel is not the way forward says WMG chief

Lord Kumar Bhattacharyya

THROWING money at Britain’s steel industry is not the way to secure its long-term survival, a Midlands manufacturing expert has said.

Professor Lord Kumar Bhattacharyya, chairman and founder of WMG at Warwick University, said more innovative solutions were required.

Lord Bhattacharyya said if the industry needed inspiration then it should look at what was happening in Coventry and the joined-up approach that was being implemented towards the ongoing expansion of Jaguar Land Rover.

Speaking in the House of Lords, Lord Bhattacharyya, who has close connections to the Tata Group, owner of Tata Steel UK, said decades of under-investment in capital, skills and product research, compounded by the impact of high energy prices and business rates were the main reasons for the industry’s decline.

“Having brought the company to this country, we should somehow or other find a solution. I am hopeful that can be achieved,” he said.

And in an updated analysis, he added: “The Government have been very proactive and I am still confident of a positive outcome.

“Tata is considering its position. By the end of this month there will be decisions made.”

He said there was a need to dramatically increase business innovation spending if the industry was to thrive.

Citing Coventry’s Smart Motor City strategy as an example, he said: “It is no good government just putting money into equipping centres if there is no industrial pull or no room for businesses to grow locally. This requires a strong dialogue between industry, universities, government and councils.

“We have seen this approach work in Coventry’s ‘Smart Motor City’ plan, which has £500m of private business investment.

“It will expand the local skills base, attract new firms to the area and support local businesses and jobs.”

He said this was just the start, and that further inward investment would be attracted in the near future.

“We anticipate that it will lead to £3bn of investment over the next three years,” he said.

“Within five years, Jaguar Land Rover now has 42,000 employees and more than 200,000 indirectly employed employees.

“It spends £3.8bn on R&D each year, and you can see what happens if you do that. The motor industry, combined with Innovate UK’s support for collaborative research in, for example, lithium-ion batteries, has attracted enormous private sector investment from overseas investors and the UK supply chain.

“Where co-ordinating small sums of money triggers a train reaction, the results are clear: record levels of production and thousands of new jobs.”

His comments come as there is mounting speculation Tata may decide to pull the sale of the steel division following a recent pick-up in the market and Government noises to offer loans and changes to the legacy British Steel Pension Fund.

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