UK steel industry: 'Little action' taken to combat crisis

Tata Steel plant in Scunthorpe Image copyright Getty Images

"Little action" was taken by the government over the steel industry crisis, a committee of MPs has said.

It was not alert enough to the impact of collapsing steel prices and failed to push for EU action on cheap Chinese imports, the business committee said.

A spate of closures in the UK industry has led to at least 4,000 job losses in the last few months.

In response to the report, the government said the issue was "complex" and it had met "key industry asks".

Steel plants in Redcar, Scunthorpe and Lanarkshire have closed this year, with a combination of factors being blamed: falling demand, competition from China, high electricity costs and a strong pound.

Higher costs

"For too long the government failed to be alert to the alarms raised by the industry and act at home to maintain a steel industry in the UK when other European countries were acting to safeguard their own strategic steel industries," said Iain Wright, chairman of the Business, Innovation and Skills (BIS) Committee.

"Industry isn't looking for a hand-out, it's looking for a level playing field. For too long there was little action from the government, with some asks from the industry taking years, if at all, to deliver."

He added that although measures were now being taken, they were focused more on those who had lost their jobs rather than trying to keep factories operating.

Speaking to the BBC's Today programme, Mr Wright said that UK steel manufacturers faced cost disadvantages.

"Energy costs are loaded on to British steel manufacturers to the detriment of British steel's competitiveness, and business rates act as a real disincentive to ensuring that people can invest in plant and machinery to make British steel production more efficient and more competitive".

'Clear action'

China has been accused of pricing its imports at unfairly low prices. The BIS committee report said not enough had been done to push for a solution to this at an EU level, and that this needed to be dealt with if the UK was to have a viable future in the industry.

However, the government said that the "steel industry has been subject to complex global challenges which no one simple solution can solve."

A spokesman said that the government was "doing all it can to help the industry" but could not "dictate the commercial decisions, operations or financial performance of private companies".

"We have taken clear action on relief for energy costs, anti-dumping, procurement and EU emissions directives, meeting key industry asks," he added.

Both the Unite union and the steelworkers' union Community welcomed the BIS committee's report.

Gareth Stace, director of UK Steel, called for the "dumping" of cheap Chinese imports to be tackled and for a commitment from ministers on the use of British steel in all major projects, such as rail, tidal barrages and airports.

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