A third of UK steel makers’ electricity bills are green taxes. This is set to rise to half by 2020.
British steel makers’ costs far outstrip those of Continental rivals, while the European Union’s response to Chinese steel dumping is inadequate, bosses and unions will tell MPs this week.
They will appear before the Business, Innovation and Skills Select Committee on Tuesday, as the MPs look at an industry where thousands of jobs have been lost in the past month and more are under threat.
Tata Steel said 1,200 jobs will go at its plants in Scunthorpe and Scotland, while SSI in Redcar went into liquidation with the loss of 3,000 jobs.
Dark day: Tata’s plant in Scunthorpe is closing with the loss of 1,200 jobs
The industry believes green taxes, high business rates and weak regulation from the EU are worsening the situation.
China’s economic slowdown has seen it export millions of tons. Nicola Sturgeon’s Scottish Government, which offered its support to the steel industry, faced embarrassment last week when it was revealed that Chinese steel will go to build much of the new Forth Bridge.
Green taxes are key to the Chancellor’s plan to fund renewable energy sources, and are charged per ton of carbon dioxide emitted. This is on top of the EU’s carbon tax, which has been falling. German steel firms are mainly shielded from green taxes because Berlin acted on their behalf years ago.
By contrast a third of UK steel makers’ electricity bills are green taxes. This is set to rise to half by 2020. Jeremy Nicholson, head of the Energy Intensive Users’ Group, said business rates were high too.
‘They are based on buildings in Germany and France. In the UK it’s on their contents, adding £800 million a year to manufacturers’ costs,’ he said.