Iron and Steel: Manufacturing Industries

Department for Business, Innovation and Skills written question – answered on 9th November 2015.

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Photo of Lord Taylor of Warwick Lord Taylor of Warwick Non-affiliated

To ask Her Majesty’s Government what steps they are taking to support the steel industry in the light of the director of UK Steel's statement that the steel industry is in crisis.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe The Parliamentary Under-Secretary of State for Culture, Media and Sport, The Parliamentary Under-Secretary of State for Business, Innovation and Skills

There is no straightforward solution to the complex global challenges facing the steel industry; however, the Government has been extremely active in advocating for, and supporting the sector. On 16th October, we held a Steel Summit, which was an important opportunity to bring the key players together and since then we have been taking urgent action to address the ‘5 Asks’ of the steel industry, operating through three Ministerial led working groups. We are also supporting the metals sector more widely through the industry-led Metals Strategy, which will provide a platform for Government to work with the industry on some of the most pressing issues holding back the future growth of the sector.

Firstly, we are tackling unfair trade practices where clear evidence exists. We supported and voted for the renewal of EU anti-dumping measures on wire rod, and lobbied successfully for an investigation into cheap imports of Reinforcing Steel Bar. The Business Secretary had meetings with European Commissioners and spoke with key counterparts in other Member States on 28 October, calling for firmer, faster action against unfair trade practices. As a direct result, an extraordinary meeting to the European Competitiveness Council is taking place on steel.

In addition, the Prime Minister discussed steel with President Xi during his recent visit. The Chinese President recognised the UK’s concerns and will be taking action to address Chinese overcapacity

Secondly, the Government has confirmed to the steel industry that it will be able to take advantage of special flexibilities to comply with new EU rules on emissions. These are now awaiting final approval by the Commission.

Thirdly, the steel industry has been invited to present detailed evidence on issues affecting the business environment at the next meeting of the steel working group on competitiveness and productivity chaired by the Treasury Commercial Secretary.

Fourthly, with regard to energy costs, following the meeting between the Business Secretary and the Competition Commissioner on 23 October, we are now expecting to have state aid approval to provide relief to our Energy Intensive Industries for the cost of renewables policy by the end of this year. Further to that, the Prime Minister announced on 28th October that we will make an additional £45m available to commence compensation for the costs of the Renewables Obligation from the date of state aid approval, alongside providing relief to these sectors from the costs of the small Feed in Tariffs. An exemption for the costs of the Contracts for Difference will also commence early next year. This is on top of over £50 million of support already given to the steel industry to mitigate increasing electricity costs.

Finally, we are taking action to drive up the number of public contracts won by UK steel manufacturers and their partners through fair and open competition. The National Infrastructure Plan contains a significant number of projects which will use British steel, e.g. Crossrail – with four UK based companies providing over 50,000 tonnes of steel; and HS2 - where Government has already given notice of the thousands of tonnes of steel that will be needed. Following the first meeting of the steel procurement working group chaired by the Minister for the Cabinet Office, the Government published on 30 October new guidelines for departments to apply on major projects when sourcing and buying steel. The new instructions will help steel suppliers compete on a level playing field with international suppliers for major government projects.

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