The last minute rescue of British Steel is not a win. It demonstrates how uncompetitive our nation has become

15 April 2025, 18:12 | Updated: 15 April 2025, 18:26

By Max Anderson

The collapse - and what looks like the eventual nationalisation - of British Steel is an ominous sign for industry.

That is not to say that the government made the wrong decision.

Keeping at least one plant open that can create virgin steel in the UK is important for our nation’s security and retaining jobs in an already deprived area.

But, the emergency legislation highlights deep, underlying problems with the competitiveness of our nation’s industry.

And, if the government doesn’t take action to fix these problems, British Steel will turn into a black hole of taxpayers' money as it struggles to turn a profit and is stuck on the government’s payroll and risk other British industries following suit.

That means tackling the biggest culprit - crippling energy prices.

For energy-intensive industries like steel, the recent energy crisis has hit them exceptionally hard.

But, even though we have shielded steel and other energy-industry sectors from electricity taxes - such as green levies and most network charges - they still face 50% higher electricity costs than their European competitors.

This is because 97% of the time the wholesale price is set by expensive gas.

If we are to ensure the long-term survival of British industry, we need to reduce our reliance on gas; that means building more homegrown cheap, clean power.

That starts with taking nuclear much more seriously. Delays to funding decisions about the new nuclear programme under this government must be ended immediately.

We should streamline regulatory processes, for example automatically approving nuclear reactor designs from reliable countries, like France and South Korea, to reduce delays and cost.

We should also create clean energy zones.

We should choose areas that need economic rejuvenation and well-paying jobs, and cut taxes and regulation in these zones to encourage private investment to flow into new solar, wind, and storage projects and reduce the costs of building energy infrastructure.

Finally, we need a level playing field for British steel when it comes to trade. Currently, British industry pays a carbon price on their goods, while equivalent imports get away without any charges.

We need a Carbon Border Adjustment Mechanism, or in other words a carbon tax on imports, to enable fair competition.

It makes no economic or environmental sense to shut down steel plants in the UK, only to import higher-carbon steel from abroad.

High-carbon Chinese steel cannot be allowed to come through the backdoor and flood the UK whilst British industries make the long-term, economically sensible and morally responsible decision to become more sustainable.

The last minute rescue of British Steel is not a win. It demonstrates how uncompetitive our nation has become. Although nationalisation might be the answer today that does not mean big government will fix long-term problems.

Tackling the barriers to private investment can end the long-term decline of British industry in a way that will make the UK more secure, bring further economic growth and make us a cleaner, greener country.

Max Anderson is Head of Communications at the Conservative Environment Network

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