Labour says weak procurement is undermining UK steel ©  Monty Rakusen/Getty Images
Labour says weak procurement is undermining UK steel © Monty Rakusen/Getty Images

Labour calls for stronger UK steel procurement rules

30 March 2021

The Labour party has called on the government to bolster steel procurement policies to favour local suppliers. 

The party urged ministers to establish “stronger Buy British guarantees in procurement notices” across all infrastructure projects to support UK steel production.

It said that UK steel content targets should be set and there should be "preference for the use of UK produced steel through the contracting process".

The move comes against the backdrop of trouble for Liberty Steel, which was refused a £170m bailout from the government, though options including nationalisation are under consideration.

Labour said if local content guarantees were strengthened 50,000 jobs could be safeguarded in the sector and the UK economy and steel supply chain could benefit from a £4.4bn boost. Carbon emissions would reduce due to less imports.

Labour said the government's steel pipeline 2020, which includes plans to use nearly 5m tonnes of UK steel over the next decade, did not go far enough.

Lucy Powell, shadow minister for business and consumers, said: “Having domestic steelmaking capacity is a cornerstone of our national security, economic prosperity and our fight to tackle the climate emergency, yet ministers are failing to back UK steelmaking with weak procurement practices that undermine these efforts.

“The pandemic has shown that we need to rebuild the foundations of our economy, and ensure we have resilient supply chains that support jobs and capacity here.

“Labour is calling on ministers to put UK steelmakers and workers first, with stronger Buy British guarantees in procurement notices, to maximise the benefits of infrastructure spending across our country, safeguarding and creating jobs and supporting our recovery, whilst reducing carbon emissions.”

Analysis by Labour found in 2018-19 UK producers missed out on a minimum of £25m of government funding for infrastructure projects, with over 111,000 tonnes of steel imported for UK projects.

The Department for Business, Energy and Industrial Strategy (BEIS), said the proportion of steel procured within the UK for public projects was 77% in 2020 – up on 40% in 2019 – and contracts with UK suppliers  increased in value by 20%, from £67m to £81m.

A BEIS spokesperson told SM: “The Government is currently reviewing its public procurement rules to ensure the system better able to meet the needs of this country now we have left the European Union.

“This month we established a new Steel Procurement Taskforce to address the challenges the sector faces in competing for and securing major public contracts.”

In 2016 a procurement policy notice sought to ensure UK steel companies “compete on a level playing field” for public procurement contracts. This included mandating government to provide a future pipeline of steel requirements.

BEIS signed the UK Steel Charter in 2019, pledging to facilitate the use of UK produced steel in construction and infrastructure projects.

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