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British steel industry hammered as key sectors forced to rely on imports

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british steel industry mill - John Giles/PA Wire
british steel industry mill - John Giles/PA Wire

Britain’s defence and nuclear industries are highly reliant on foreign steel, new figures show, as Boris Johnson considers whether to impose new tariffs on imports of the metal.

The UK is buying more than two-thirds of the steel needed for the two key industries from abroad, according to Government figures. The nuclear and defence industries spent £150m on the metal last year, of which just £45m came from British mills.

The disclosures come as Boris Johnson prepares to extend steel tariffs to protect the British industry. The Prime Minister has said the industry needs support as energy bills soar.

Critics say the plan will break international law and could worsen Britain’s cost of living crisis by pushing up costs.

In the late 1960s, the UK was the world’s fifth largest steel producer but it had dropped to 10th by the 1980s and 18th by 2015.

Britain’s steel industry is battling high energy costs and cheap imports from China, the world’s biggest producer.

The ability to make steel at home is seen as critical to maintaining Britain’s car-making, aviation and broader manufacturing industries, because of the expense of moving the metal and growing supply chain worries.

Government figures show only 29pc of steel used in Government-led nuclear projects came from the UK last year. Nuclear used £142m on steel, most of which was spent at the Sellafield site in Cumbria. Just £41m came from local mills.

The Nuclear Decommissioning Authority said: “The procurements were planned and were advertised to the market.”

Almost half (47pc) of steel for defence projects came from abroad because the right grades of steel are not being made in Britain.

Last year, the UK bought a total of £8.25m of steel for defence projects including the new Dreadnought submarine, Type 26 frigate and Type 31 frigate. Only £4.24m was from UK mills.

The Ministry of Defence said it and its main contractor, BAE Systems, buy British steel where they can but that it is not always possible with some grades. For some short production runs for prototypes, it is not seen as profitable enough for local suppliers.

UK steel production peaked in 1970 with 28.3m tonnes a year, but has since slid to just over a quarter of that.

Britain is now the eighth biggest producer in Europe, behind Austria and Belgium. China dominates the industry, making half the world’s steel.

BAE Systems said: “We aim to procure British steel wherever possible. The steel we buy is determined by the technical specifications of our complex military programmes, as well as the financial and schedule requirements of our customers.”

A Government spokesman said: “Ministers want major infrastructure projects to buy British steel where possible. The record volume of UK steel procured for projects over the past year demonstrates how public contracts can play a role in delivering growth in our steel industry.

“The MoD encourages the sourcing of UK steel for defence projects wherever it is technically and commercially feasible and we are backing the future of British steelmaking by co-investing in new low carbon technology, extending energy costs relief for a further three years and doubling the amount of support. This is in addition to more than £600m of support we have provided to the sector over the past decade.”

The nuclear and defence industries are highly sensitive and the Government has stepped in to secure the supply of crucial components in the past. It acts when parts cannot be made elsewhere or where sharing the design of items abroad would be undesirable. Last summer the Government nationalised submarine parts maker Sheffield Forgemasters.

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