Construction industry figures have welcomed plans for a new national steel strategy, but have called for the government to back up its warm words with action.
At the weekend, the Department for Business and Trade opened a consultation on devising a strategy for the UK steel sector, with mooted options including stimulating demand for domestically produced steel and examining the impact of electricity costs on production.
The government also announced it would support the industry with £2.5bn of investment through the National Wealth Fund.
Amid the introduction of a 25 per cent tariff on steel exports to the US from 12 March, the consultation document said the UK would explore ways to “maintain market access” and “minimis[e] trade barriers”. It did not name any specific countries.
US president Donald Trump said the steel tariff would apply “without exceptions or exemptions”. But business secretary Jonathan Reynolds told the BBC last Sunday that the UK and US have a “mutual interest” in negotiating an exemption.
The consultation document also committed to protecting the UK from unfairly cheap steel imports.
Construction Products Association economics director Noble Francis welcomed the strategy.
“Rising uncertainty about the direction in which global trade is going means that having a strong UK manufacturing base for key materials will be critical, especially given that the government has ambitious plans for more and better-quality infrastructure and construction.
“Imports of materials currently benefit from lower industrial energy prices and better business conditions than in the UK,” he said.
Francis called for this issue to be urgently addressed with a clear plan that ensures “businesses can justify the large, upfront investment in UK manufacturing to ensure the security of supply and provide the products domestically that will be needed for the construction needs of the future”.
He added: “The steel strategy may be a step in that direction, but, as ever, the key will be what the government does in practice beyond the nice words, the strategies, the councils, the committees and the workstreams.”
Low carbon call
Richard Selby, director of South Wales-based structural steel specialist Pro Steel Engineering, said the £2.5bn funding announcement was “good news”.
But called for the strategy to help ensure lower carbon steel is manufactured in the UK, to help domestic construction companies make more use of it.
“There is a mismatch currently between the policies of buying British-made steel and buying lowest carbon steel which needs to be unravelled,” he said.
Trade body UK Steel welcomed the government’s plan, calling it a “significant commitment” to tackling the key challenges facing the industry.
It said in a statement that the £2.5bn investment has the potential to transform towns where steelmaking is based.
“This funding will modernise steel production and identify gaps in our steel-making capability to meet future steel demands, ensuring a sustainable and globally competitive UK steel industry.
“Recent developments highlight the government’s growing support for the sector. The Heathrow Airport expansion, requiring 400,000 tonnes of steel – equivalent to the amount used in the Empire State Building – demonstrates the potential for public and private projects to strengthen UK steel supply chains,” it added.
British Constructional Steelwork Association chief executive Jonathan Clemens said the plan follows “years of neglect” of the sector by Whitehall.
He added: “Let’s hope that the government’s seeming commitment to support a foundation industry of the UK, which has been a bedrock of the economy for years, translates into actions to see it thrive once again and cascade down the supply chain to steelwork contractors and other allied industries.
“It is essential that the supply chain is engaged and supported given the jobs and wealth creation manufacturing in the UK creates.”
The National Wealth Fund, which will provide the £2.5bn of new sector investment, was called the UK Infrastructure Bank until October.
Its remit has been extended by the Labour government beyond infrastructure to cover the UK’s broader industrial strategy. It is wholly owned by the Treasury.
The consultation on the steel strategy closes on 30 March.
