Yorkshire steel industry enters “critical year”

Business Secretary Vince Cable has been urged to intervene to ensure the likes of Tata Steel are not held back by high energy costs.

In a blunt warning, Yorkshire MP John Healey told Mr Cable that “it is the high energy prices that pose the risk of pricing British steel-making out of business.”

The Wentworth and Dearne MP said the UK steel industry faced clear disadvantages.

He said: “The full cost of energy for large energy-intensive users, such as steel makers, is €77 per megawatt-hour in the UK, which compares with €49 in France, €38 in the US and €33 in Germany. Of course when high-end products go through several processes—melting, casting, re-melting, rolling and finishing—that premium and extra cost is multiplied.

“We need the Secretary of State to commit his Government to bringing in, once state aid clearance is achieved, help with the cost of the renewables obligation—that is imperative.”

Last autumn Tata Steel said 126 jobs would be lost at its Yorkshire steel bar business, with 110 going in Rotherham and another 16 in Stocksbridge.

Mr Healey was backed inn parliament by Rotherham MP Sarah Champion, who said the value of the industry could be seen in the fact that “every five seconds an aircraft reliant on Rotherham steel takes off or lands somewhere in the world.”

She added: “Ultimately, we want steel to thrive in the UK, because it is a critical part of our supply chain, but the future sustainability of the industry will be under threat, unless the Government act quickly and strategically to safeguard UK steel. The industry needs a Government willing to act now on energy tariffs and business rates.”

Mr Cable said he had been “actively pursuing the issue of speeding up state aid clearance” in order to intervene with more cash support for the industry.

He added: “It is all very well to complain about unfair competition, and there may be some, but the most productive steel plants in the world are in Japan, Korea and, potentially, China. For decades there has been massive under-investment in the British steel industry. Tata has invested in blast furnaces in south Wales, but there has nevertheless been chronic under-investment, which is why there is a productivity issue in relation to overseas competition.”