Government should set a target for how much British steel will be used in big projects like HS2, says Labour

Ministers are being urged to set a target for the amount of British steel used in big infrastructure projects like HS2 as they unveiled plans to change government policy to spark a "renaissance" in domestic shipbuilding.

Labour is calling on government to set targets for UK steel content for major public works with a guarantee to state a preference for the use of UK produced steel through the contracting process.

It comes amid calls to consider taking Liberty Steel, which employs hundreds of people in Yorkshire, into public ownership to protect 5,000 jobs after the firm’s key lender went into administration.

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A worker tends to the furnace producing ferrotitanium during a visit to Tivac Alloys by UKIP leader Nigel Farage to see first hand how the global steel crisis is affecting small businesses on April 18, 2016. Pic by Getty Images.

And yesterday Defence minister Jeremy Quin told MPs the naval procurement policy will be changed to make clear the option to "choose to procure warships of any description here in the UK".

He said this shift towards supporting UK industry would spark a British shipbuilding "renaissance" and added that small and medium-sized companies must also have a "fair chance" to secure work.

In the Commons Mr Quin came under pressure from Hull MP Diana Johnson over the renewal of the Red Arrows fleet of Hawk trainer aircraft, made at BAE Systems in Brough in the East Riding, in 2030.

Dame Diana said defence procurement was about supporting domestic manufacturing and skilled jobs, adding that there was "no greater ambassador for global Britain" than its aerobatic display team.

Labour analysis shows that 24p in every pound spent on steel for government infrastructure projects went abroad in 2018/19, the last year that figures are available.

If government had prioritised UK steelmakers, the industry could have benefitted from a £25 million boost, creating and safeguarding 1,110 jobs, Labour say.

The Government’s steel procurement pipeline shows plans to use nearly 5 million tonnes of steel over the next decade in infrastructure projects including HS2 and the expansion in offshore wind generation.

Lucy Powell MP, Labour’s Shadow Business Minister, said: “Having domestic steelmaking capacity is a cornerstone of our national security, economic prosperity and our fight to tackle the climate emergency, yet ministers are failing to back UK steelmaking with weak procurement practices that undermine these efforts.

"The pandemic has shown that we need to rebuild the foundations of our economy, and ensure we have resilient supply chains that support jobs and capacity here.

“Labour is calling on ministers to put UK steelmakers and workers first, with stronger Buy British guarantees in procurement notices, to maximise the benefits of infrastructure spending across our country, safeguarding and creating jobs and supporting our recovery, whilst reducing carbon emissions.”

In the Commons yesterday, Business Secretary Kwasi Kwarteng said the steel industry was "a vital part" of the Government's decarbonisation strategy.

Asked by Ms Powell if he would consider taking Liberty Steel into public ownership, the Conservative replied: "(Ms Powell) will know that we have a repeated and often stated commitment to decarbonisation in our industry - it was only last week that we published the industrial decarbonisation strategy.

"She will also appreciate that the steel industry is a vital part of that decarbonisation strategy."

A Department for Business, Energy and Industrial Strategy spokeswoman said: “Whether for offshore wind farms, nuclear power stations or electric vehicles, steel will play a critical role in providing the infrastructure necessary to drive a green economic recovery and project jobs.

“We are actively supporting the UK steel sector to ensure it is in the best position to benefit from British opportunities – estimated to be worth £3.8 billion a year by 2030 - and this month established a new Steel Procurement Taskforce to address the challenges the sector faces in competing for and securing major public contracts.

“The Government is currently reviewing its public procurement rules to ensure the system is better able to meet the needs of this country, whilst complying with our international obligations.”