The UK steel strategy, that was published today, has set a higher target for the UK to make half of the steel it uses, while placing higher taxes on steel imports.
The Business Department has stated that imported steel quotas will be lowered and anything brought in above that level will be subject to a new 50% tariff.
The UK steel industry, which has been calling for cheaper steel made abroad, has welcomed the measures. However, The Confederation of British Metalforming (CBM) has highlighted the potentially damaging impact of quotas and tariffs on the downstream supply chain, which employs ten times the number of people when compared to steel makers.
The government is looking into a “transitional approach” where its 50% tariff would not apply to goods under contracts agreed before 14 March and imported between July and September.
These measures were announced by Business Secretary Peter Kyle in Port Talbot, in Wales, where Tata Steel is building an electric arc furnace to make steel by melting scrap metal.
Steve Morley, President of the CBM, which represents the interests of 200 members, employing 40,000 people in the UK, said the following: “This long overdue steel strategy is welcome.
“Government now needs to ensure the steel companies are fully accountable in delivering against investment targets and the much-needed upscaling of production. Starmer and co must demand that UK infrastructure projects source domestically and that these same steelmakers are fit and able to deliver the required volume of product on time.
“Whilst all those involved in the Steel Council will welcome the content of the strategy, it must be recognised that it follows a backdrop of many years of underinvestment and successive Government’s that have failed to consistently back industry. In fact, the ‘powers that be’ have actually made it worse by failing to address rising energy costs and employment policies that are strangling the economy.
“As the CBM has consistently requested, had representatives from downstream manufacturers, stockholders and consumers of steel been included in earlier discussions, respective Governments would have received a far more balanced and rounded perspective of the entire British steel supply chain.
“The fact these voices have been omitted means it is no surprise that the strategy now plans sweeping and draconian trade measures that will only harm British manufacturing, employment and the economy – until domestic steelmakers are truly fit and able to effectively support their customers.
“It’s a crazy decision when you consider the downstream supply chain employs ten times as many workers (many with decades of acquired skills) than UK steel producers. Thanks to decisions made to supposedly boost British industry, hundreds of firms now face severe disruption in the form of highly restrictive quotas, and potentially fatal cost increases driven by 50% tariffs.
“These costs will cascade throughout the economy and will ultimately harm UK consumers. Moreover, British manufacturers, who contribute hugely to UK export earnings, will be rendered completely uncompetitive in global markets.
The CBM, together with other interested parties, will seek concrete assurances from the UK Government that the implementation of these trade measures will accurately reflect the current capabilities, and not future aspirations, of British steelmakers.”
Mr Kyle denied the new tariffs were a protectionist measure that would push up prices for manufacturers who use foreign steel and their customers.
He told the BBC, “I’m announcing really ambitious targets for use of British steel in the British economy, from 30% to 50%, But also, I need to defend the sector from anti-competitive behaviour from elsewhere in the world.”
Gareth Stace, director general of UK Steel, added that for too long the UK has lacked a coherent plan for steel, which he said “underpins our national security, our energy transition, and the delivery of critical infrastructure”.
“This is a crucial moment: with global markets distorted by overcapacity and subsidy, a clear and ambitious domestic strategy is exactly what is required to ensure steelmaking not only survives in the UK but thrives.”
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