Britain must maintain “at least one” blast furnace, Reform UK has insisted as the Government prepares to support the construction of a new generation of electric arc furnaces.
A £2.5billion strategy to secure the future of British steelmaking is out for consultation but comes as President Trump has announced 25% taxes on steel entering the United States.
The Government says the expansion of Heathrow will secure orders for Britain’s steel industry for years to come but there are fears that the country’s high energy costs will mean the sector will struggle to compete against intense international competition.
The industry is shifting towards electric furnaces which melt scrap steel. But there are concerns about Britain losing the capacity to make “virgin steel”.
Reform UK deputy leader Richard Tice said: “Steel is of strategic national importance. We must maintain at least one blast furnace to manufacture the strongest, highest quality steel.”
He warned that electric arc furnaces will “struggle due to our very high electricity price” and pressed for the push to net zero carbon emissions to be axed.
Blast furnaces remain in operation at Scunthorpe but plans were announced in 2023 to switch to electric arc technology.
Heathrow has pledged to use British steel wherever possible in its expansion plans. This could involve 400,000 tonnes of steel, which the Government boasts is “enough to build the Empire State Building”.
Business Secretary Jonathan Reynolds insisted the UK industry has a “long-term future”.
He said: “We said that during the election, and we are delivering on it now. The deal announced by Heathrow this week will secure a strong industry pipeline for years to come – and we are putting the full weight of Whitehall behind the industry to build on this success.
“Britain is open for business, and this Government has committed up to £2.5billion to the future of steel to protect our industrial heartlands, maintain jobs, and drive growth as part of our plan for change.”
The GMB union warned the ability to make steel is vital to the country’s security.
National secretary Andy Prendergast, GMB said: “After years of dithering, today’s plan provides desperately needed funding for our once proud, now beleaguered steel industry. As the world becomes more volatile, primary domestic steel making capacity is vital for both our economy and domestic security.”
The consultation will look at issues including Britain’s high electricity costs and “unfair trading practices” with the goal of protecting “jobs and living standards in the UK’s industrial heartlands”.
The £2.5billion is expected to be invested in regions including Scunthorpe, Rotherham, Redcar, Yorkshire, and Scotland.
Gareth Stace, director-general of UK Steel, said: “Developing the Steel Strategy must be a collaborative process, and the consultation is an open invitation for all stakeholders to help shape the future of UK steel. The Government’s commitment to our steel sector is both vital and welcome.
“A robust, bold, and ambitious steel strategy has the power to reverse the sector’s decline, particularly as we face increasing competition from imports benefiting from more favourable business conditions. By setting out a clear business plan and roadmap for investment, the Government can secure a brighter future for our industry, safeguard jobs, and support steelworkers and their families.”
