Politicians and industry figures struggle to solve UK steel crisis as sector awaits further subsidies
Government and industry figures yesterday admitted that there was no firm solution to the UK steel crisis, as the struggling sector awaits EU approval for further subsidies.
Factors cited for the decline of the sector include the flood of cheap steel arriving from China, combined with high business rates and energy costs.
Gareth Stace, the director of trade body UK Steel, said that government action on taxes would be “helpful” for the industry, but would not be enough without addressing the flood of Chinese exports – an issue currently without a solution. Another factor hurting UK exports is the strong pound, but Stace said the UK government is unlikely to address it.
“The government view is that the changes the industry is asking for will not be enough [to make the sector competitive] due to global issues,” a spokesperson from the Department for Business, Innovation and Skills told City PM. “The SSI plant in Redcar had never been profitable, as it could never compete with cheaper products from China.”
Steelmakers have received £50.4m from the government since 2013 to compensate for the indirect costs of environmental levies.
The UK is awaiting EU state aid approval for its proposed Energy Intensive Industry Compensation Package, which will provide hundreds of millions of pounds in subsidies for energy intensive industries, including steel, over the next few years.