The UK government has announced a plan to support the steel industry. It aims to reduce costs, boost domestic production, and protect jobs. Moreover, officials want to prevent cheap foreign steel from undercutting UK suppliers.
This announcement follows US President Donald Trump’s decision to impose a 25% tariff on steel imports from March 12. As a result, UK steelmakers fear major trade losses.
Government’s Plan and Financial Support
Business Secretary Jonathan Reynolds launched a consultation to address long-term challenges in the steel industry. In addition, the government has pledged £2.5 billion in financial support. Reynolds stated this will “protect our industrial heartlands, maintain jobs, and drive growth.”
On the other hand, Shadow Business Secretary Andrew Griffith criticized the government’s silence on the tariff issue. He urged officials to engage with the US, calling it “our closest trading partner.”
Key Measures in the Plan
The Department for Business and Trade (DBT) outlined several steps to strengthen the industry. Specifically, the plan includes:
- Expanding domestic steel production.
- Increasing the use of UK-made steel in public projects, such as the Heathrow Airport expansion.
- Improving scrap processing facilities.
- Investing in electric arc furnaces, which use less energy and cut carbon emissions.
Furthermore, officials will review electricity costs to help UK steel compete globally. At the same time, they will explore ways to prevent cheap foreign imports from flooding the market.
No Immediate Response to US Tariffs
Despite growing concerns, the UK government has not yet announced a response to the US tariffs. Meanwhile, Canada and the EU have already threatened retaliatory measures.
Earlier this week, Reynolds told the BBC that the UK should be exempt from the tariffs. He argued that British steel exports to the US are small and mostly used in defense projects.
Industry Leaders Warn of Economic Damage
According to UK Steel, the industry body, these tariffs would be a “devastating blow” to the UK’s £400 million steel trade with the US. The UK sends only 10% of its steel exports to the US.
However, steelmakers fear that if other nations can’t export to the US, they will dump excess steel in the UK at lower prices. Consequently, this could harm UK manufacturers and put jobs at risk.
Government Moves to Secure Jobs
The plan aims to protect jobs in Scotland, Scunthorpe, Lincolnshire, Rotherham, and Redcar. Since these areas have a long history of steel production, officials want to ensure their future stability.
To fund these efforts, the government will use the National Wealth Fund, which combines public and private sector investments.
Moreover, the DBT said it is “wasting no time” in helping UK steel. For example, officials pointed to support for Heathrow Airport’s expansion, which will require 400,000 tonnes of steel.
Steel Industry Faces Heavy Job Losses
The UK steel industry has faced significant job losses in recent years.
For instance, in 2023, British Steel shut down blast furnaces in Scunthorpe, leading to 3,000 job cuts. Likewise, Tata Steel closed traditional furnaces at Port Talbot, Wales, replacing them with electric arc furnaces. This decision cost 2,800 jobs.
Union and Industry Reactions
The GMB union welcomed the government’s plan, calling the funding “desperately needed.” According to Andy Prendergast, the union’s national secretary, steel production is vital for the economy and national security.
Similarly, UK Steel Director-General Gareth Stace praised the government’s commitment. He said the new steel strategy, expected in the spring, could “reverse the sector’s decline.”
Nonetheless, Andrew Griffith stressed that lowering energy costs must be a priority. He warned that high prices are putting “intolerable strain” on UK steelmakers.
The government’s Plan for Steel aims to protect jobs, boost production, and counter foreign competition. In the coming months, officials hope these measures will strengthen the industry amid growing global challenges.
