UK government accused of inaction over steel industry

The Government has been accused of failing to be alert to alarms raised by the steel industry before firms starting cutting thousands of jobs.

Tata announced its intention to close the historic Dalzell steel works in Motherwell in October. Picture: John Devlin

A committee of MPs said other European countries took action to safeguard their steel industries, but there was “little action” from the UK Government.

The Business, Innovation and Skills Committee also criticised UK governments for failing to push for European Union action, which it said left firms exposed to the dumping of cheap imports from China and a global over-supply of products.

The European Commission last week approved state aid compensation for energy-intensive industries which is estimated to be worth £300 million a year, including £45 million to steel companies.

The Government said the move would give steel firms greater certainty around energy costs.

But the committee said Whitehall did not have effective warning systems in place to detect and tackle mounting problems in the industry.

Thousands of jobs have been lost in recent months, including the closure of the SSI plant in Redcar, and cuts in Scunthorpe and Lanarkshire.

The report said the Government’s initial response focussed on compensation for the workers rather than trying to save the plant.

Committee chairman Iain Wright said: “The steel industry is now on the verge of terminal decline. For too long the Government failed to be alert to the alarms raised by the industry and act at home to maintain a steel industry in the UK when other European countries were acting to safeguard their own strategic steel industries.