Energy price spikes and lack of Government action has created a hostile environment for industrial investment in the UK, says UK Steel Director General, Gareth Stace
UK Steel welcomes reports that the Business Secretary, Kwasi Kwarteng has submitted a formal proposal to the Chancellor, Rishi Sunak, which he has said addresses the damaging effects of current energy price spikes faced by energy intensive sectors, such as steel.
Whilst the Business Secretaries swift intervention are to be commended, we must see the details of such a proposal, to assess whether these measures will be sufficient to deal with the immediate problems we face. For UK Steel and its members, the key measure of success for this proposal is whether it places UK steel producers on a levelling playing field on energy costs compared to the European counterparts.
Key to this will be a mechanism that shields steel producers from the extreme wholesale price spikes we’ve seen in recent weeks, whilst also looking ahead to measures that reduce the excessive policy and network costs UK producers have long been saddled with.
If any package delivers less than this and we still continue to pay more for energy than French and German steel producers and we remain at a competitive disadvantage. Steel producers here in the UK will continue to have to pause steel production, will be less efficient, and will lose margins and market share.
This is a hostile environment for industrial investment in the UK and for the Government’s levelling up agenda. Our message directly to the Prime Minister is please don’t just apply a sticking plaster to what is a significant long-term problem. Action can and must be taken now to secure the foundations of British Industry.
We need a fair deal for UK Steel