Tees Valley Mayor Ben Houchen has claimed the Civil Contingencies Act could be used by the Government in a last-ditch bid to keep steelmaking alive in the UK.
Mr Houchen said he had suggested such a move – which could effectively lead to a nationalisation of the industry – to officials in “looking at all eventualities”, but regarded it as “not a plan B, but a plan Z”. The Civil Contingencies Act gives the Government emergency powers to make temporary special legislation in certain scenarios, for example where a threat to national security has been established.
The Conservative mayor was answering questions from councillors at a meeting of the Tees Valley Combined Authority’s overview and scrutiny committee over the fate of an electric-powered steel furnace previously proposed for land at Lackenby by British Steel, amid reports it has been cancelled.
Government ministers have been in negotiations for months with British Steel owner, Chinese firm Jingye over potential investment in its plans to convert two traditional coke-fired blast furnaces at its main Scunthorpe site into an electric one, while also establishing a similar facility at Lackenby, agreement so far having failed to be reached. The move is part of an effort to secure a “green future” for UK steelmaking by reducing carbon emissions.
British Steel’s accounts for 2022 showed losses of £408m, while the beleaguered steel industry was hit by another blow last September when Indian company Tata stopped making steel using traditional methods at its site in Port Talbot, Wales, and was subsequently given permission to import steel slabs from abroad to make steel products instead.
Mr Houchen said it was “absolutely true to say that no decision had been made” over Lackenby, but went on to issue warnings over the future of the industry in the UK. He also claimed steelmaking unions had been “agitating quite heavily” for investment in Scunthorpe, where 4,000 jobs are based, and where latest reports suggest two electric arc furnaces could in fact go.
The mayor said: “We need to protect steelmaking in the UK. If British Steel goes bust, we will no longer fundamentally be producing our own steel in this country, which would cause huge national security implications.
“We don’t really build any more the likes of warships and nuclear submarines from our own steel and this would further expose us to global markets.”
He added: “We have to have that indigenous steelmaking capacity and I have said to the Government they should be looking at all eventualities. That could be looking at something like the Civil Contingencies Act if the Chinese aren’t doing what they need to do to keep sovereign steelmaking in this country. Enacting that would take it off them all together.
“This would be a last/worst case scenario for everybody, but if it comes to it…We would all admit that, irrespective of political colour, steelmaking is so important to so many industries and our national security that even if for the short-term to keep that capability the Government needs to do all it can.
“I have recommended this to the Government, I hope they are exploring it, I’d be surprised if they weren’t exploring it.”
Mr Houchen said the Government had to keep some form of steelmaking going as a “bridge over” to the new electric arc furnaces.
Jingye previously said its proposals were subject to appropriate support and “swift and decisive action” was needed to ensure a sustainable future for British Steel. In contrast to blast furnaces, electric furnaces generate heat from an electric arc between electrodes with the steel produced being formed from melted scrap metal.
An artist’s impression of how the building at Lackenby that would house the electric arc furnace could look
(Image: Tees Valley Combined Authority)
Mr Houchen said of the Teesside project, which could create 250 new jobs along with many more in the supply chain, that we “have to keep banging the drum”. He said after planning permission was secured and design work finished on the planned build at Lackenby, the project entered the due diligence phase in terms of potential sign off from the Government only for last July’s earlier than anticipated General Election to interrupt the process.
Mr Houchen was asked by Councillor Andy Kier what would happen if the Lackenby project did not proceed, as many now expect, and whether sufficient lobbying was taking place by local politicians to push the case for Teesside. He replied: “If it wasn’t to happen, from an economic growth, investment, job creation point of view, I am not that concerned.
“There is a pipeline of investors [in the area] coming through, but our biggest issue at the moment is that we are about to run out of land at Teesworks with all the deals that are currently in legals and will be announced shortly.
“There may be new investors that come. But that window is shrinking because as Teesworks continues to sign off more deals and investment the land bank becomes very small.
“The footprint of where the electric arc furnace was to go, a substantial amount of it is on British steel land, but not all of it [some of it is on the Teesworks site]. That land could be allocated to another investor, creating just as many, if not more jobs on good wages.
“What are we supposed to do, wait around for five or 10 years on the never never and see the steel investment not happen at the expense of another great investment? The window continues to close.”
Mr Houchen also referred to a recent letter by Labour MPs based in the Tees Valley, which said they were “absolutely committed” to the steel industry on Teesside, which still employs about 800 people, while also being understanding of the Government’s determination to secure steel jobs in Scunthorpe through new electric arc furnaces. The letter said: “This only the first step in a long-term plan to rebuild the UK’s steelmaking capacity.
“Teesside’s case for an EAF is incredibly strong, and we are committed to pushing for its inclusion in the next phase of the steel strategy.” Mr Houchen said he was “disappointed” by the letter and said “the fight is now”, while also predicting “there won’t be a phase two”.
This week a British Steel spokesman said: “We are in ongoing discussions with the government about our decarbonisation plans and the future operations of our UK business. While progress continues, no final decisions have been made.”
Meanwhile, the Government has pledged £2.5bn from the National Wealth Fund to invest in the steel industry and recently announced the launch of a reconstituted Steel Council, drawing membership from across the UK, to map out a future steel strategy.
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