Steel snub would increase 'reliance on imports'

Scrapping the return of steelmaking to Teesside would risk leaving the UK needing to increase imports from China and India, the area's mayor has warned.

The Chinese company behind British Steel, Jingye, is poised to ditch its plan to build an electric arc furnace (EAF) at Lackenby, near Redcar, according to the Sunday Times.

The move would see two such furnaces built at Scunthorpe, in Lincolnshire, rather than one in each location, although British Steel said it had not yet made a final decision.

The government said it had committed up to £2.5bn to "rebuild" the country's steel industry.

The two new furnaces are set to replace British Steel's blast furnaces in Scunthorpe as part of a £1.25bn decarbonisation plan.

Unlike blast furnaces, EAFs use scrap steel as the raw material which means they are less carbon intensive. They are also likely to need fewer workers, experts say.

British Steel was granted planning permission to build a furnace on Teesside last April, with 250 jobs said to be created by the scheme.

Reacting to the news that the plan appears to have been scrapped, Lord Houchen told the BBC: "For whatever reasons, whether it's pressure from unions or politicking, it looks like Teesside is now playing second fiddle with the priority being building the furnaces in Scunthorpe.

"You can build an electric arc furnace on Teesside and start building tomorrow because it's got planning permission.

"What we're going to see is a break in the production of primary steel making in this country. We're going to be exposed to imports from India and China.

"There's a real risk not only do we lose thousands of jobs in Scunthorpe [during the transition] and not create hundreds of jobs on Teesside, but we're also going to see China and India putting political pressure on the UK, which has got huge national security implications."

Lord Houchen criticised six local Labour MPs who he said had welcomed the investment in Scunthorpe "to the detriment of Teesside" - a stance he described as "gobsmacking".

Those MPs - Redcar's Anna Turley, Middlesbrough and Thornaby East's Andy McDonald, Stockton North's Chris McDonald, Hartlepool's Jonathan Brash, Middlesbrough South and East Cleveland's Luke Myer and Darlington's Lola McEvoy - hit back in a letter.

They said: "This government sees steel not as a sunset industry to be outsourced abroad, but as a vital sector with a bright future at the forefront of low-carbon and green innovation.

"We understand the government's determination to secure steel jobs in Scunthorpe through the electric arc furnaces.

"However, this is 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."

A British Steel spokesperson 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."

A Department for Business and Trade spokesperson said the government would "simply not allow the end of steel making in the UK".

He added: "That's why we've committed up to £2.5bn of investment to rebuild the UK steel industry and support communities now and for generations to come.

"We're working across government in partnership with trade unions and businesses, including British Steel, to secure a green steel transition that's right for the workforce, represents a good investment for taxpayers and safeguards the future of the steel industry in Britain."

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