Labour calls for stronger Buy British steel guarantees as failure to back steel industry exposed

Labour is today calling on ministers to back British steelworkers by guaranteeing they want to see UK steel used in all government infrastructure projects.

Analysis by the Party 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.

UK Steel analysis shows that sourcing steel from domestic producers has demonstrable economic, social and environmental benefits. In 2018/19, UK steelmakers missed out on a minimum £25 million worth of government funding for infrastructure projects with over 111,000 tonnes of steel imported for UK projects.

If government had prioritised UK steelmakers, the industry could have benefitted from a £25 million boost, creating and safeguarding 1110 jobs, boosting steel communities by contributing £100 million to the UK economy, and reducing carbon emissions by tens of thousands of tonnes on imported steel from the EU or China.

The Government’s steel procurement pipeline shows that the Government plans to use nearly 5 million tonnes of steel over the next decade in infrastructure projects including High Speed 2 (HS2), the construction of Hinkley Point C, the maintenance and upgrading of the UK’s motorway network and the expansion in offshore wind generation.

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.

If the government put in place stronger Buy British steel guarantees it could equate to a boost to UK businesses, workers and communities of:

• 50,000 jobs safeguarded and created;
• A £4.4 billion boost to the UK economy including steel businesses and the supply chain;
• Reduction in carbon emissions from imported steel of between 750,000 tonnes (EU) and 2,800,000 tonnes (China)

If the Government fails to ensure that UK steelmakers benefit from UK infrastructure projects, hundreds of millions of pounds of business, and thousands of jobs will be at risk.

Lucy Powell MP, Labour’s Shadow Minister for Business and Consumers, 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.”

Ends

Notes to Editors:

Analysis of the latest government data on the departmental breakdown for steel procured for 2018/19 shows:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/925356/steel-pipeline.pdf

UK Steel analysis shows that for every 1,000 tonnes of UK produced steel used in a public project delivers:

• 4.5 jobs in the steel industry, 10 jobs when the supply chain is included

• £383,561 direct contribution to the UK economy, £876,712 when the supply chain is included
• 150–560 tonnes of CO₂ of emissions reduction compared with importing from the EU or China respectively

If 100 per-cent of the steel accounted for had been from UK steelmakers, it would equate to:

o Safeguarding and creating 1110 steel industry and supply chain jobs

o Contributing nearly £100 million to the UK economy (97,631,840.03)

o Reducing carbon emissions from imported steel by tens of thousands of tonnes of CO2 (16704 (EU) 62,362 (China))

Future prospects

The government’s Steel procurement pipeline 2020 shows future steel requirements for national infrastructure projects. The steel pipeline shows how the government plans to use nearly 5 million tonnes of steel over the next decade on infrastructure projects such as, High Speed 2 (HS2), the construction of Hinkley Point C, the maintenance and upgrading of the UK’s motorway network and the expansion in offshore wind generation.

If all this steel was produced in the UK it would equate to a boost to UK businesses, workers and communities of:

• 50,000 jobs safeguarded and created;
• £4,383,560,000 boost to the UK economy including steel businesses and the supply chain;
• Reduction in carbon emissions from imported steel of between 750,000 tonnes (EU) and 2,800,000 tonnes (China)

https://www.gov.uk/government/publications/steel-public-procurement-2020

UK Steel

UK Steel has called on the government to maximise the use of UK steel in government infrastructure projects including:

• Set targets for the UK steel content of major public projects^[1], starting with HS2
• Establish a stated preference for the use of UK produced steel, with a requirement for developers/contractors to provide reasoning where UK steel has not been used
• All steel specifications to be published in UK norms rather than European
• The Procurement Policy Note (PPN) on steel should stipulate that the tendering process for steel works contractors should include requirements for them to provide supply chain plans, advertise steel supply opportunities and report on the origin of steel ultimately used
• CfD energy projects should be brought within the scope of PPN
• All UK Government Departments should sign up to the UK Steel Charter^[2]