Government Launches Steel Council to Revive Industry

Business Secretary Jonathan Reynolds said steel communities ‘have had enough of lurching from crisis to crisis.’

Tata Steel's Port Talbot steelworks in south Wales on Sept. 15, 2023. Ben Birchall/PA Wire

The government has launched the Steel Council to advise on how to safeguard the future of the industry, following thousands of job losses last year.

The Steel Council, which convened for the first time on Tuesday, will also discuss the allocation of up to £2.5 billion pledged by the government to support the sector’s growth.

Business Secretary Jonathan Reynolds and chairman of the Materials Processing Institute, Jon Bolton, will jointly lead the council. It will bring together industry figures, such as the CEOs from Tata Steel and British Steel, trade unions, devolved governments, and experts to work on how to secure the long-term future of steelmaking in the UK.

Reynolds said on Jan. 7 that steel communities “have had enough of lurching from crisis to crisis,” blaming the previous Conservative government for the neglect of the sector.

“This government will take the action needed to place steel on a secure footing for the long term. With the launch of the Steel Council we’re placing workers and local communities at the heart of our plans as we bring forward up to £2.5 billion of investment to secure growth right across the country,” he said.

The Steel Council will meet regularly ahead of the government’s planned launch of the Steel Strategy in Spring, which will aim to increase investment, production, and jobs creation.

‘Sustainable and Resilient Industry’

Bolton said that he has worked in the steel industry for 40 years and “it’s clear this sector has faced many challenges.”

He continued: “However, I believe the UK has all the essential elements to attract investment into the steel industry: demand, skills, technology, unrivalled research and development and, critically, a supportive government having announced up to £2.5 billion of support.

“I see the Council’s task being to develop a strategy that details the core elements of that investment plan and to establish a roadmap towards a rejuvenated, competitive and environmentally progressive industry.”

UK Steel, the trade association for the steel industry, said the establishment of the Steel Council was a “defining moment” for the future of the industry.

Gareth Stace, director general of UK Steel, said, “The Council represents a crucial step towards creating a comprehensive Government Steel Strategy – one that lays the foundations for a sustainable and resilient industry.”

Thousands of Jobs Lost

The announcement came after recent years saw the planned closures of the UK’s most well-known steel mills, resulting in thousands of job losses.

Indian multinational Tata Steel announced that it would cease traditional steel production at the Port Talbot plant in Wales in September 2024. The closure of the blast furnaces came ahead of Tata Steel’s transition to a greener form of steel production using an electric arc furnace, which produces fewer carbon emissions and conforms to net zero targets.

While the government has committed £500 million to secure some 5,000 jobs, up to 2,800 people found themselves out of work at the plant when the last blast furnace closed, because the electric arc system will take years to construct and when it is completed, will need fewer workers.

Since then, the government has launched other initiatives to sustain the Port Talbot steel community, including doubling a fund to support supply chain businesses and workers to £30 million. Former employees are also being offered financial support to start their own businesses.

Steam rises from the blast furnaces at the Tata Steel processing plant in Port Talbot, Wales, on Jan. 15, 2015. Matt Cardy/Getty Images

In 2023, British Steel, owned by the Chinese conglomerate Jingye Group, announced that it would be closing its blast furnaces in Scunthorpe, to replace them with an electric arc furnace.

Dozens of other steel mills have closed across the UK in the last 70 years, but the recent closures have meant that the UK has now become the first G20 nation unable to make virgin steel using iron ore, coke, and limestone. The new electric arc furnaces make recycled steel from scraps of steel.

Energy, Oil, and Automotive Industries

The energy, oil, and automotive industries have also been affected by net zero targets, with jobs being lost or put at risk.

On Sept. 30, the UK’s last coal-fired power station at Ratcliffe-on-Soar near Nottingham was shut down, in line with government policy to end coal-fired power generation.

An employee inspects a car at the Vauxhall vehicle production plant in Luton, Bedfordshire, England, on Feb. 18, 2015. Toby Melville/PA Wire

Petroineos confirmed on Sept. 12 that Grangemouth, Scotland’s only oil refinery, would cease operations in 2025 and would transition to a finished fuels import terminal and distribution hub. The refinery’s owner had said in 2023 that the site faced “significant challenges due to global market pressures and the energy transition.”

And in November, Vauxhall owner Stellantis said it plans to close its van-making factory in Luton, with the company saying the decision came amid the government’s “stringent” green targets.