Secretary of State Jonathan Reynolds addresses the UK Steel Parliamentary Summit
6 December 2024
Now is the once-in-a-generation opportunity for UK steel
“Let’s look at this as the moment we can say ‘this is the time we got it right’” – this was the message the Rt Hon. Jonathan Reynolds delivered to the UK Steel Parliamentary Summit on Monday.
In his first public address on the upcoming UK Steel Strategy, Reynolds emphasised the importance of reshaping the sector, and that he wanted to make it “the best strategy it could be… an absolute turning point in the industry,” marking a decisive moment for steel. While acknowledging the tough global challenges ahead, Reynolds stressed the need for a “hard-headed” pragmatic approach focused on the UK’s national interests.
UK Steel’s Director General, Gareth Stace, highlighted the difficulties facing the global steel industry, particularly excess capacity, the design of the Carbon Border Adjustment Mechanism and rising energy costs. However, he framed the UK Government’s understanding and investment in steel as a beacon of hope, urging that this represents a once-in-a-generation opportunity to secure the sector’s future.
The Steel Strategy should focus on addressing key challenges - reducing electricity costs, incentivising investment, supporting domestic production, and ensuring fair competition. Both Jonathan and Gareth underscored the importance of collaboration between government, industry, and trade unions to build a sustainable, competitive steel industry that drives economic growth and environmental progress.
Steel Strategy and National Wealth Fund Priorities: UK steel procurement and reclaiming market share
The Summit panel discussion, chaired by Gareth, explored the opportunities for the UK steel sector, highlighting the need for a strategic approach aligned with other Government policies. Alongside the wider Industrial Strategy, just this week Defence Secretary John Healey announced Defence Industrial Strategy plans. There is also a National Infrastructure Strategy in the works, Trade Strategy and Long Term Plan for Housing, and the Clean Power 2030 mission in development.
Panellists, including Liam Bates, President of Long Products at Marcegaglia Stainless Sheffield, Roz Bulleid of Green Alliance, Roy Rickhuss CBE of Community Union, Tim Pick MBE of the Clean Power Mission 2030, and Jonathan Brash MP, all stressed the potential for growth with the right strategy.
Tim Pick outlined a significant opportunity for UK steel in offshore wind, citing a “£21 billion, 25 million tonne market”. However, Gareth noted that foreign steel currently dominates 68% of the UK market, a share that has grown year-on-year. Liam also highlighted that steep electricity costs, lack of investment and concerns such as national logistical capacity created an uncompetitive business environment where foreign imports undercut domestic steelmaking. The panel agreed that the UK should aim to reverse this trend, ensuring national steel producers supply the majority of the market in the next decade.
Roy Rickhuss highlighted challenges in procurement, where Community members have noticed a tendency to favour foreign steel and bureaucratic barriers often hinder the use of UK-made steel. Indeed, it was commented that there is no policy incentive to choose ‘British business first’ in the purchasing cycle. The panel agreed that Government procurement practices must prioritise homegrown steel, provided steelmakers are equipped with the necessary support and investment, as outlined in the forthcoming Steel Strategy.
As Jonathan Reynolds said in his keynote, “When you look across G7 economies and look at the size of their steel sector, normally it’s relative to the size of their economy, except in one case and of course, that is the UK. That tells you that we’re missing out on something. It tells us that we could clearly do better.”
Jonathan Brash said that protecting and growing the UK’s sector is a political decision about “value”, crucial for national projects and security of supply. The UK Steel report published last week included five recommendations to help Government improve its procurement practices and uplift the UK’s industry through purchasing, thus improving market share.
Can you put a price on the value of UK steel?
Jonathan Brash MP, new Chair of the APPG for Steel and Metals Related Industries and MP for Hartlepool, highlighted the need to recognise different types of value in the steel industry. He argued that value extends beyond monetary considerations, highlighting the social value that can accompany economic growth. Marcegaglia’s Liam Bates added that UK steel companies have roots to the earliest production in the UK, and this proud history should be maintained. By supporting the sector through the Steel Strategy and strengthening homegrown steelmaking, both Government and businesses can foster robust communities, create well-paid jobs, and offer promising careers for thousands across the UK.
Steel trade measures, emissions, and carbon borders
The Secretary of State underlined the need for the UK to adopt a sharp approach to trade, recognising the power of key markets like the US, EU, and China, while prioritising national interests: “Following the presidential election, trade will be quite a significant political issue across most European countries in 2025… We’ve got to be hard-headed about our own national interests in exactly the same way other countries will be hard-headed.”
The discussion shifted to the challenges posed by imports, offshoring, and industrial emissions. While the UK steel industry is rapidly decarbonising and paying for its emissions, most global steel producers, including China, do not face comparable carbon pricing. Gareth highlighted that 91.8% of global production faces minimal or no carbon pricing. This leaves the UK vulnerable to high-emission imports undercutting on price despite their carbon footprint, particularly from China, which is expected to export 100 million tonnes this year alone with no carbon pricing applied.
Roz Bulleid agreed that the UK cannot ignore emissions, stating that decarbonisation is the route to a sustainable steel future. Audience members reflected in the discussion that low-emission steel is increasingly required by customers to reduce the embodied carbon of a product or project. While competitors abroad produce large quantities of high-emission steel, the international market, particularly in Europe, races to produce low-emission steel to meet this new demand - UK steelmakers cannot be left behind.
In his keynote, Reynolds stressed the importance of strong trade measures to protect the UK market, with UK Steel already working with the Department for Business and Trade on future measures.
Stephen Kinnock MP spoke from the audience and supported the introduction of the UK Carbon Border Adjustment Mechanism (CBAM), a key component of the Steel Strategy, but lamented that the Treasury’s current approach was inadequate. Kinnock said we cannot ignore that buying imported steel means the UK is simply offshoring manufacturing and emissions.
UK Steel is advocating for a more robust CBAM that ensures fair treatment for domestic producers who are decarbonising while paying for their emissions. The global market is also bracing for changes as President-elect Trump prepares to take office, which could impact trade dynamics.
Collaboration for the future
The UK Steel Parliamentary Summit provided a platform for diverse parts of the industry, including energy, unions, steelmakers, and supply chain players, to unite in support of UK steel. Chairing the audience discussion, Anna Turley, MP for Redcar, expressed confidence that the expertise and passion in the room could create a successful strategy. Roy echoed this sentiment, showcasing the need for collaboration to achieve the best possible outcome. Liam supported these words, but warned that Government must do its part to provide clarity on the Steel Strategy’s implementation and how it will invest the £2.5bn National Wealth Fund, as past funding had been difficult to unpick.
As the Steel Strategy develops, it is clear that all industry stakeholders are eager to contribute and work together towards a stronger future for UK steel, and we at UK Steel look forward to collaborating on the Strategy as it develops.