Lack of European action left the UK steel sector having to compete with cheap Chinese exports

UK government blamed for steel industry failure

A committee of MPs has accused the UK government of failing to take action following earlier concerns raised by the steel industry about the state of the sector which led to thousands of job losses.

The Business, Innovation and Skills Committee said in a report that while other European countries made moves to safeguard their steel industries, the UK government did little to prevent the decline.

The committee also criticised it for failing to push for European Union action, which it said left firms exposed to the dumping of cheap imports from China and a global over-supply of products.

Last week, it was announced that energy-intensive industries, including steel firms, were to be given £300m in annual compensation by the government through not having to pay renewable energy subsidies.

The measure will be worth £45m annually to the steel sector alone and the government said the move would give firms greater certainty around energy costs.

However, this came too late to prevent significant job losses in UK steel including 250 redundancies at the Tata Steel plant in South Wales in August, followed by another 1,700 dismissals at the SSI steel factory in Redcar in September.

The committee said Whitehall did not have effective warning systems in place to detect and tackle mounting problems in the industry, and that its initial response to the closure of Redcar focused too much on compensation for workers rather than trying to save the plant.

Committee chairman Iain Wright said: "The steel industry is now on the verge of terminal decline. 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.

"Industry isn't looking for a handout, 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.

"The government have now woken up to the steel crisis and have begun to take action, but this recent activity still needs to translate to concrete results for the industry and the communities they sustain.”

Gareth Stace, director of UK Steel, said: "This is a welcome and supportive report from the committee which highlights the highly damaging cocktail of factors which have hit the steel industry during the course of this year.

"The key is for Government and all stakeholders to work together on delivering action to ensure we have a sustainable future for the steel industry in the UK. It is essential we do not lose the current momentum.

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