Steel bosses meet new business secretary as worries mount over Brexit, decarbonisation, procurement and electricity prices

New business secretary Kwasi Kwarteng met steel bosses to set out the government’s path to net-zero - and was asked about sky-high electricity prices and demands for the government to buy British.

By David Walsh
Tuesday, 9th March 2021, 10:03 am

Mr Kwarteng, who took up the post in January, said the forthcoming ‘Industrial Decarbonisation Strategy’ would show how manufacturing could thrive despite the ‘huge challenge’ of transitioning to low carbon.

The UK government has signed up to a legally-binding target of making the UK carbon neutral by 2050.

He also highlighted government financial assistance including a £250m Clean Steel Fund and £500m to help make electricity costs more competitive.

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New business secretary Kwasi Kwarteng.

And he re-stated the government’s commitment to levelling up the country and protecting jobs ‘as we build back better from the pandemic’.

The meeting came two days before Liberty Steel’s lender collapsed into administration raising fears for 5,000 jobs.

UK steel producers pay 86 per cent more for electricity than their competitors in Germany and 62 per cent more than in France, according to UK Steel.

Gareth Stace, UK Steel director general, said the sector had also been hit by Brexit and reform of procurement rules were needed. But he welcomed the meeting.

David Bond, CEO at Sheffield Forgemasters International Ltd.

He said: “That the Steel Council met is an indication that the Government understands the importance of our industry to our wider ambitions on decarbonisation, particularly in the year of COP26.

“It’s clear that any agenda for a zero-carbon economy is an agenda for steel – 8 of the 10 steps in the Government’s Green Ten Point Plan require steel.

“Like all industries, we have faced challenges due to COVID-19 and the EU exit changes in trading conditions for the movement of goods.

“We are also hamstrung by industrial electricity costs significantly higher than those of our European competitors and face the continuing threat of import surges that could undermine our domestic competitiveness.

“Our industry still needs action from government; action to tackle the electricity price disparity, action to reform procurement so that our steel producers are able to contribute to national projects and continuing support to ensure that the steel sector can continue to thrive and develop as a key part of our economy as we look to minimise our environmental impact and build a zero-carbon Britain.

"That future requires more steel made in Britain – not less.

“We’re working with the government to deliver on public procurement through the Steel Procurement Taskforce and will continue to work with them on our other sector priorities as well.”

A BEIS spokeswoman said a new UK Steel and BEIS Procurement Taskforce would meet ‘shortly’ to explore difficulties in securing major public contracts and what the government can do to address them.

The meeting was attended by steel bosses including the heads of three in South Yorkshire: CEO of Liberty Steel Jon Ferriman , Forgemasters managing director David Bond and David Scaife, director, Outokumpu.

David Bond, CEO at Sheffield Forgemasters, said: “It was pleasing to meet the new Business Secretary and we recognise how important the UK steel sector is to Kwasi Kwarteng and his team, with this engagement taking place early in his tenure.

“It was a constructive meeting and we discussed the challenges of how the UK steel industry makes the transition towards a zero carbon future for the UK, in line with the Government’s net zero carbon agenda.

“Sheffield Forgemasters believes that UK Steel can emerge from this transition as a globally competitive leader in the green economy, with routes into civil nuclear, hydrogen power and offshore wind power initiatives offering great potential to develop those industries.”

Representatives of the trade unions and the devolved administrations were also there.

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Thank you. Nancy Fielder, editor.