Published on November 29, 2024
As the country’s largest steel buyer, UK Steel is urged to support the domestic industry by prioritizing local steel in public procurement. According to a UK Steel Industry Association report, a third of the steel purchased by the government is currently imported. This reliance on imported steel costs British taxpayers approximately £1.5 billion annually. The association highlights a unique opportunity for the government to strengthen the UK steel sector and ensure economic benefits for the country.
Economic Impact of Imported Steel
The significant amount of imported steel used in government projects has a substantial economic impact. Over the next decade, the government’s steel needs will be projected to exceed £4.3 billion. This figure does not consider major initiatives such as carbon capture and storage, hydrogen infrastructure, nuclear power, and offshore wind power. The potential for economic growth and job creation within the UK steel industry is immense, provided the government shifts its procurement policies to favor local steel producers.
Opportunities in Major Projects
One of the most promising areas for the use of domestic steel is in major infrastructure projects. For instance, investments in offshore wind energy around the UK coast will require up to 25 million tons of steel over the next 25 years. This segment alone is estimated to be worth approximately £21 billion (nearly $26.5 billion) in procurement. This enormous demand presents a significant opportunity for the UK steel industry to secure a substantial portion of the supply chain and reap the economic benefits.
Recommendations from UK Steel
UK Steel, the industry association, has put forward several recommendations to increase the use of local steel in public infrastructure projects. These recommendations include:
1. Public Procurement Contracts: The government should design public procurement contracts that prioritize the use of domestic steel. By doing so, they can ensure that taxpayer money is used to support the national industry.
2. Strategic Requirements: Implementing certain requirements for using local steel in government contracts can help boost the economy, preserve well-paid jobs, and revitalize the industry.
3. Collaboration and Strategy Development: The UK steel industry is ready to work with the government to develop a robust steel strategy that prioritizes local production. This collaboration can lead to strategic procurement decisions that turn taxpayer investments into economic wins for the country.
Strategic Procurement and Economic Benefits
Strategic procurement of local steel can transform taxpayer investments into a powerful economic engine. By supporting domestic steel production, the government can preserve well-paid jobs and contribute to the revitalization of the industry. Gareth Stace, CEO of UK Steel, emphasizes that a strong steel strategy that prioritizes local production is crucial for the future of the UK economy.
The government’s new Industrial Strategy and Sovereign Wealth Fund aims to provide stability for investors and support the manufacturing base, including the steel industry. These initiatives can further bolster the efforts to prioritize local steel in public procurement.
Conclusion
In conclusion, the UK government has a unique opportunity to support the domestic steel industry by giving preference to local steel in public procurement. By making strategic procurement decisions, the government can ensure economic growth, job preservation, and the revitalization of the UK steel industry. The recommendations from UK Steel highlight the importance of prioritizing local production to turn taxpayer investments into long-term economic benefits. Supporting local steel is about boosting the industry and building a stronger future for the UK economy.
Leave a Reply