UK Steel statement ahead of Select Committee enquiry

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The head of UK steel will tell MPs later today that British steel is at a critical crossroads, and ministers must decide if they are prepared to do everything they can to prevent further trauma for the industry.

Gareth Stace, the Director of UK Steel, will address MPs at the BIS Select Committee inquiry into the spate of steel industry job losses.

He is expected to warn MPs that time is short and ministers and officials will have to move quickly to shore up the industry which is facing the double impact of high energy costs and the unfair dumping of steel from China.

Mr Stace will be giving evidence hours before the Business Secretary, Sajid Javid, travels to Brussels for high level talks with senior EU commissioners in an effort to clear the way for a crucial compensation package for steelmakers in Britain, who have been penalised by so-called unilateral UK green levies which make the cost of electricity much higher than their European counterparts. The Commission will only give the scheme the green light if it is satisfied that it doesn’t breach ‘state aid’ competition rules.

Gareth Stace said:

“Ever since the Business Secretary called for the emergency steel summit two weeks ago the clock has been ticking. Time is rapidly running out and the steel industry needs assurances from Government that it is going to deliver on its promises. Ministers, up to and including the Prime Minister, are saying all the right things about compensation, making sure there is action on unfair dumping of steel and ensuring building projects in the UK use British steel – but the practical reality is that these measures must be driven home and delivered.

“Time is not on our side. The industry needs to see results to give it the confidence to push on. Failure to do so could have disastrous consequences for the remainder of the industry.”

According to UK Steel, there are five key actions that the Government can take in the short-term to demonstrate its commitment to the UK steel industry:

  1. Fully implement the Energy Intensive Industry Compensation Package, ahead of April 2016. The sector is currently still paying 70% of the policy costs that the full Package aims to address

  2. Bring Business Rates for capital intensive firms in line with their competitors in France and Germany. UK companies are currently paying between five and 10 times more than their EU competitors

  3. Fully consider derogation requests from the sector on a realistic timetable to meet increased commitments under the Industrial Emissions Directive. Under current proposals, the cost of meeting revised permits for the sector are estimated at up to £500m by 2019

  4. Continue to back EU-level action on anti-dumping measures which support the UK steel sector against the rapid rise in global imports

  5. Support local content in major construction projects.

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