Call for clear plan over future of British Steel to secure sector and 4,000 jobs

The Government stepped in to prevent the closure of Scunthorpe blast furnaces in April last year, in a bid to save the sector and thousands of jobs. But while it has bought time, there are warnings that ongoing uncertainty raises “further questions” and with costs coming in at £1.3m a day.

Nationalisation does not resolve the underlying problem of profitability, the Public Accounts Committee (PAC) warns today.

Sheffield South East MP Clive Betts is deputy chair of the PAC. He said: “The clear message that came out last year when the Government took control is that we do need a strong steel industry for our future security. We now need clarity about how the Government sees British Steel going forward, about how that is funded, and how that feeds into a steel strategy.

“Whether we can get it to profitability is another matter - if that means we need an ongoing subsidy we need to see,” he added. “It is clear we need to produce more steel to meet our own needs. The danger is we are really at risk from any consequences of being unable to import steel when we need it.”

MPs say a transparent strategy must set out moves towards a competitive sector and to tackle a new steel tariff regime.

Spending on British Steel reached £555m by June this year, reports outline, but the PAC warns that growing costs will only put more pressure on the public purse.

It also calls for a timeline and pathway for governance and, with a new tariff regime set out this summer, there are questions over the impact on smaller businesses.

Alasdair McDiarmid, general secretary for Community Assistant as the union for steelworkers, said it must have a “full seat at the table” to help with planning: “We cannot have a greener, fairer economy without a resilient steel industry.

“It is vital for the Government to act swiftly and ensure a credible and sustainable plan is put in place to ensure the longevity of steelmaking in Scunthorpe.”

And Mr Betts said Government must continue to work “hand in glove” with local authorities and unions to bring about a just, managed transition.

“It means really important jobs, highly skilled and well-paid jobs,” he added. “It’s really important that we keep them - they are of great value to our local economies.”

A Government spokesperson said securing the long term future of steel is in the country’s national interest, and it has appointed a new Board and Chair this month.

“Taxpayer value for money remains a central consideration,” they said. “We are also backing the communities that rely on it through our Steel Strategy to build a sustainable, competitive and decarbonised steel sector for the years ahead.”