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SOS: Steel Makers Blame Tory Government For Uncompetitive Energy Prices

The Daily Telegraph

Steel makers are calling on the Government to deliver on promises of “remorseless” support for the sector by cutting power prices for the energy-intensive industry.

The demands come as 25,000 jobs hang in the balance with British Steel last week being placed in compulsory liquidation and put in the hands of the Official Receiver.

Energy costs faced by Britain’s steel makers are some of the highest in Europe, with the industry paying twice as much for power as competitors in France and 50pc more than those in Germany.

According to data from trade body UK Steel, British steel companies pay £65.07 per megawatt/hour (MWh) for power, compared with £30.92 for rivals in France and £43.11 in Germany.

Speaking as British Steel collapsed, Greg Clark, the Business Secretary, pledged to “pursue remorselessly every possible step to secure the future” of the company.

Now major players in the sector are challenging Government to come good on these promises by reducing power costs, which are driven up by policies such as decarbonisation initiatives.

They also say tax policies which discourage investment to improve facilities need to be re-examined, as the companies face higher business rates if the pump money into steelworks.

Insiders says that without action, British Steel could be a warning of the future faced by the wider industry.

Luis Sanz, chief executive of Celsa, said the company’s Cardiff plant has one of the most energy efficient furnaces in Europe.

However, he warned: “No amount of energy efficiency can make up for the gap in the unit cost of electricity.”

Steel making in the UK has “every reason to expect a vibrant future”, Mr Sanz said, “once the right business environment is constructed to compete on a level playing field”.

The view was echoed by Tata Steel UK. Deirdre Fox, its director of strategic business development, said that UK steel makers are at an “immediate disadvantage” to rivals in Europe.

“This is a disadvantage which could be changed and would allow the UK sector to attract international investment rather than watching it go to markets with more favourable conditions.”

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see also GWPF coverage of the UK steel & energy crisis