The outcome of the EU referendum was a blow to the industry, which had previously indicated that its survival rate was higher if the UK remained part of the EU. In response to the decision to leave, it has published a manifesto laying out the urgent steps the UK Government must take to ensure a successful and sustainable steel industry for the future.
The manifesto identifies over capacity, unfair trade and a lack of parity with European competitors as the key issues the industry faces. In stark terms, these have led to a 60% decline in the number of people employed in the sector since 1995 and a 10% drop in production compared to 2014 with predictions that this will worsen by the end of 2016. At the same time, Chinese steel exports have rocketed by almost 400% since 2009.
UK Steel makes a number of recommendations to the Government, but says that key amongst these is to remove unilateral energy costs, increase the procurement of UK steel, tackle unfair trade, provide funding mechanisms for energy efficiency projects and determine what investment and support is required by the industry in the long-term.
By taking these steps, the steel sector will not only survive, but in the longer-term will also thrive and provide the UK with security of supply as it splits away from the EU.
Gareth Stace, director of UK Steel, said: “The outcome of the EU referendum has fanned the flames of the crisis threatening to engulf our entire industry. In the short-term this means an even bumpier ride, but it also gives the Government added incentive to ensure our sector survives.
“In post-Brexit Britain, self-sufficiency and security of steel supply will be of even greater strategic economic importance – this makes it more important than ever that the Government matches words with actions and takes all necessary steps to support our sector now.
“Everything we are asking for is designed to provide our sector with a level playing field so that we can compete fairly and freely. But this blueprint is also an urgent reminder to Government that it cannot afford to row back on commitments to support the steel industry now. Above all it must not allow the current political turmoil or Brexit negotiations to distract, deter or delay it in making decisions vital to British steel making’s long-term survival.”
He continued: “Despite recent action from Government on delivering compensation on electricity costs, there is still a significant gap in costs that British steel companies pay and what their near competitors pay. We have provided realistic solutions to Government on how this final, but significant, gap can be bridged. It’s now time for it to take action and deliver the level playing field that enables us to compete fairly.”
“Competition based on free and fair trade is crucial for the continuance of the UK steel industry. The UK should, through its negotiations in leaving the EU, ensure that post-Brexit it either remains linked to the EU Commission’s dumping measures or it brings about a swifter, more robust, set of measures to deal with dumping.”
“With our future ability to freely trade with the EU remaining uncertain, Government cannot afford to let up on ensuring that all major procurement projects, from rail to tidal barrages and airports, all use British steel. Government departments and stakeholders need to recognise their responsibility in ensuring local steel content in projects, to not only protect the future of steel, but our wider manufacturing base too.”
Commenting on business rates, Mr Stace said: “Business rates in the UK are an appalling 10 times higher than those paid by our competitors in France and Germany. The removal of plant and machinery from business rate calculations would bring the UK in line with our competitors; this action rests solely in the hands of the UK and devolved governments.”