The constructional steelwork sector has given a lukewarm reaction to the government’s new steel strategy.
Business and trade secretary Peter Kyle announced the new steel strategy on a visit to Tata Steel in Port Talbot.
It sets the ambition for up to 50% of steel used in the UK to be made in the UK. From 1 July 2026, overall quota levels for steel imports will be reduced by 60% compared to current arrangements, and steel coming into the UK above these levels will be subject to a 50% tariff.
But Jonathan Clemens, chief executive of the British Constructional Steelwork Association (BCSA), warned that the strategy will increase costs for the construction sector.
“For all the rhetoric about sovereign capability and backing British industry, this strategy will make essential products more expensive for the downstream businesses that actually turn steel into buildings, bridges and infrastructure,” he explained.
“The strategy accepts that imports will remain vital because the UK can’t supply every product the market needs, but proposes a regime that will raise costs across the supply chain.
“The result will be higher costs across construction, including projects commissioned by the government itself, while also making steel a less attractive option in the very sector where its use should be encouraged as part of efficient and low-carbon building.
“Higher steel costs will put downstream businesses, already suffering from extortionate and turbulent energy costs, under even greater pressure, ultimately leading to job losses across the constructional and fabrication sectors.”
Investment in the steel sector
The government strategy promises to use the National Wealth Fund to provide up to £2.5bn of financing for investment in the steel sector this Parliament.
The announcement also described electric arc furnaces (EAF) as the future of British steelmaking. Sir Robert McAlpine is building an EAF at the Port Talbot plant.
A cross-government working group will be formed to ensure a sustainable supply of scrap metal for UK steelmakers.
Kyle said: “Making steel in the UK is vital for national security, critical infrastructure and the wider economy. Steel-making is a cornerstone of our modern industrial policy that deliberately focuses support for key industries, technologies and strategically important sectors.
“With this strategy, we are closing the decades-long chapter of destructive deindustrialisation and committing instead to strengthening and sustaining Britain as a steel-making nation.”
