Public sector should support the British steel industry

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The government has said public sector construction projects will be pushed to use British steel in a bid to save the industry…

Last week, steel giant Tatarevealed plans to pull its UK operations. Mainly affected will be the works in Port Talbot, which is Britain’s largest steelworks, which employs 4,000 people, but loses some £1m a day.

The UK steel industry is struggling due to cheap Chinese steel flooding the global market. Tata pulling out of the UK would deliver a massive blow to both the sector and employment, with some 15,000 jobs expected to be lost.

Significant debate has raged over what role the government should play in supporting the steel industry. One approach that has been called for is the nationalisation of the sector, but this seems unlikely, with the government declaring this would be an unlikely strategy it would implement.

Speaking to the BBC Business Secretary Sajid Javid said: “It wouldn’t be prudent to rule anything out at this stage, but I think that nationalisation is rarely an answer in these situations.”

However, the government has said it will encourage public sector construction projects to use British steel. The guidance is aimed at organisations such as local authorities and NHS Trusts. It countermands previous instructions that required public sector bodies to take into account the “true value” of British steel.

Javid said: “By changing the procurement rules on these major infrastructure projects, we are backing the future of UK steel – opening up significant opportunities for UK suppliers and allowing them to compete more effectively with international companies.”

However, shadow business secretary Angela Eagle said the government needs to do more to address the issue in the sector.

“The Government has been dragged kicking and screaming to take action to support the steel industry, which is a vital foundation industry and has descended further into crisis on their watch.”

Unite assistant general secretary Tony Burke said if the industry was “to be given a fighting chance then the government and Tata need to come clean on their intentions and prior discussions, because so far all we’ve had is more questions than answers”.

He added: “The apparent lack of urgency from Sajid Javid and absence of a clear plan from the government is disturbing for the tens of thousands whose livelihoods hang in the balance and deeply troubling for British Steel’s 140,000 pensioners.”

The outcome for the British steel sector remains uncertain, but unions are set to meet today to discuss options going forward.

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