Energy costs threaten steel

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Chancellor of the Exchequer George Osborne has been accused of threatening Sheffield region steelmakers by dragging his feet over promises to cut green energy taxes.

Speaking in the Cutlers’ Hall, at the end of the Global Manufacturing Festival, Tata Steel’s European chief Karl-Ulrich Köhler hinted that the UK faced losing hi-tech steel production, concentrated in the region, unless the Government changed its policies.

Dr Köhler said companies like Tata were paying 50 per cent more for their electricity than competitors in France and Germany simply because of government regulations.

In the Sheffield area alone, Tata was paying £20 million more than competitors in Europe and things would become even worse next month, thanks to new regulations.

“In his Autumn Budget Statement the Chancellor pledged to grant relief from measures like the Carbon Price Floor,” said Dr Köhler.

“But even after yesterday’s Budget, there remains an almost total lack of clarity about how the mitigation package for energy-intensive industries will work in practice.

“All we know is that the competitive gap in electricity costs between us and our European peers is rising alarmingly – and is set to rise even further.”

Dr Köhler warned that a huge range of Tata Steel’s UK customers could suffer if the Government failed to act.

“Without the support of an advanced metals supply base here in the UK, all these supply chains will themselves suffer. We must not let that happen,” he said.