Senior Tory Lord Houchen furious over end of steel making in UK

UK Steel Industry Faces Uncertainty Amid Furnace Closure Concerns

A prominent Conservative figure has criticized ministers regarding the potential cessation of steel production in Britain. The Tory figure asserted that Labour yielded to union influence and supported a “non-viable” location for cutting-edge furnaces, escalating apprehension about the future of UK steel industry.

Teesside vs. Scunthorpe: The Battle for Steel Production

Lord Houchen’s Teesside Proposition

Lord Houchen, the Tees Valley Mayor, argued that groundwork to establish an electric arc furnace at the former Redcar Steelworks site in Teesside could “commence immediately.” He highlighted that the land, part of the Redcar Steelworks closed a decade prior, has been cleared and possesses existing power infrastructure.

However, Lord Houchen alleges that Labour prioritized the construction of two electric arc furnaces in Scunthorpe to safeguard employment, succumbing to union lobbying.

British Steel’s Scunthorpe Predicament

These plans are now facing significant challenges. Jingye, the Chinese proprietor of British Steel, has indicated it can no longer sustain the current blast furnaces at Scunthorpe. These furnaces are reportedly incurring losses of £700,000 daily.

Earlier this week, the company declined the government’s £500 million subsidy offer, deeming it inadequate. Subsequently, it initiated consultations regarding the closure of these furnaces – Britain’s last operational virgin steel producers – and potential redundancies affecting up to 2,700 employees.

Abandoned Teesside Plans

Initial proposals involved constructing one electric arc furnace in Teesside and another in Scunthorpe. Despite securing planning consent in April of the previous year, the Redcar proposition was abandoned in January.

The revised strategy focused on developing both new furnaces exclusively at Scunthorpe.

Viability Debate: Scunthorpe’s Suitability Questioned

Lord Houchen contended that ministers are attempting to force an unsuitable solution by insisting on steel production returning to Scunthorpe. He believes this is an attempt to mitigate job losses in the area, rather than focusing on the most viable locations.

Speaking on BBC Radio 4’s Today Programme, Lord Houchen stated, “The reality is, the Government is attempting to politically manipulate investment towards Scunthorpe.”

He elaborated, “British Steel submitted a financial proposal to erect a steel production facility on Teesside. We possess the necessary planning approvals and could commence construction imminently. This plan was consistently in place until union intervention and subsequent Labour Party endorsement.”

Redcar’s Readiness vs. Scunthorpe’s Hurdles

Lord Houchen’s office communicated to the Mail that developing furnaces at Scunthorpe lacks commercial viability. The Scunthorpe site requires clearing and the installation of a suitable electricity supply.

Conversely, industry sources suggest Redcar’s primary obstacle is the absence of a skilled workforce, whereas Scunthorpe already possesses one. Maintaining the existing furnaces in Scunthorpe until electric arc replacements are operational is seen as crucial to preserve this workforce.

Government’s Response and Future Steel Strategy

A spokesperson for the Department for Business and Trade refuted Lord Houchen’s assertions. “We dispute Lord Houchen’s claims. We acknowledge the deeply concerning situation at British Steel. This Government has consistently affirmed a positive outlook for steel production in the UK, pledging up to £2.5 billion to revitalize the sector where others have faltered,” the spokesperson stated.

The spokesperson added, “We will soon release a comprehensive Plan for Steel. This plan will detail our strategy to secure a sustainable future for workers, the industry, and local communities, including Teesside.”