A prominent former advisor to Margaret Thatcher has strongly criticized the current government’s intervention in the steel industry, labeling it a “tragedy” that is detrimental to both workers and taxpayers.
Concerns Over National Security and Cost
Lord Redwood, who previously headed the Iron Lady’s policy unit, ed grave concerns about the UK’s ability to secure essential steel for defense purposes if domestic production capacity is lost. “If the UK abandons blast furnaces, every time we need steel for a warship or for defence supplies, we will need to find enough old saucepans and end-of-life cars to put the steel into the melting pot,” he stated.
Last year, emergency legislation was enacted, including a rare Saturday sitting of Parliament, to prevent the closure of British Steel’s blast furnaces. This legislation enabled the nationalization of the company. reports the public accounts committee indicate that by the previous month, the financial support provided to the company had reached £484 million.
“The British Steel tragedy is costing UK taxpayers a fortune at a time when the government needs to control its spending and get better value for money,” Lord Redwood remarked. Analysis by the National Audit Office in March revealed that the daily cost of keeping British Steel’s Scunthorpe site, home to the UK’s last two blast furnaces, operational is approximately £1.3 million.
Worker Uncertainty and Policy Criticisms
Lord Redwood highlighted that the government is facing “two expensive fronts: to cut the operating losses and to see off Chinese demands for compensation.” He added a further point of concern: “Worse still, the employees who were told their jobs are saved are in the dark about how long the government will go on operating these furnaces and paying the bills.”
The Conservative peer criticized the government’s approach, deeming it “bad for taxpayers, bad for the employees and bad for the ministers that took the bad decisions.” He emphasized, “We all want to keep the jobs and keep UK virgin steel making capability. This is not the way to do it.”
Net Zero Policies and Energy Costs
Turning his attention to the government’s net zero policy, Lord Redwood argued that it is significantly increasing energy prices, thereby sacrificing key industries. “Our steel industry, like ceramics, petrochemicals, glass, fibreglass and much else, is being sacrificed on the altar of decarbonisation and dear energy,” he asserted. “The losses at Scunthorpe are greatly magnified by our energy being so much dearer than Chinese or US energy – countries that have no restraint on burning coal, oil and gas when needed.”
He further contended that the UK’s commitment to net zero, while preventing domestic fossil fuel use, leads to increased global carbon dioxide levels through the import of goods. “The UK’s mad net zero dogma says we should not burn it ourselves but should import all the things that need someone to burn fossil fuel instead. This of course increases world [carbon dioxide levels] by the all the extra diesel and aviation fuel burned to get the things to us.”
Tariffs and Future Outlook
While acknowledging that more steel imports will face tariffs from next month, Lord Redwood ed skepticism about the effectiveness of this measure for UK steelmakers. He warned, “Adding high tariffs to imported steel as the government is now doing to try to protect the nationalised business will drive more UK steel users out of work and their employees out of jobs.” He concluded, “The government needs to change its stance quickly while there is still some steel industry left to save.”
Government Response
A spokesperson for the Department for Business and Trade stated, “Securing the long-term future of the UK steel sector is in our national interest. While this will require both public and private investment, we’ve taken the first step towards securing steelmaking by introducing legislation which will grant us powers to take ownership of British Steel. We fully recognise the challenges the sector is facing on the cost of energy, which is why our modern Industrial Strategy is cutting electricity costs for industries across Great Britain, including steel.”
