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Iron and Steel: Manufacturing Industries

Answer

The Government is committed to minimising energy costs for businesses to ensure that the UK economy remains strong and competitive. We recognise that the UK’s industrial electricity costs are currently higher than those of our competitors, and so we have taken steps to reduce the cumulative impact of energy and climate change policies on the price of industrial electricity for key industries, such as steel. This includes providing the steel sector with over £285m of compensation since 2013 for the indirect costs due to the EU Emission Trading System, carbon price support mechanism, Renewable Obligation, and small-scale Feed-in Tariff.

The steel sector is actively engaged with UK Research and Innovation in shaping the Industrial Strategy Challenge Fund: we are providing up to £66m for the ‘Transforming Foundation Industries Challenge’, subject to industry co-funding. In addition, up to a further £170 million has been provided to develop a ‘net-zero carbon’ industrial cluster, that will help heavy industries – including steel – to share expertise and innovate low-carbon solutions as we move to a greener, cleaner economy. We have also created an important new fund – the Industrial Energy Transformation Fund – which is worth up to £315 million, and supports businesses with high energy use to transition to a low carbon future, and cut their bills in the process through increased energy efficiency. Recently, we have launched an informal consultation, and are seeking views and evidence on how we can design the fund to maximise its benefits whilst ensuring value for money.

The Government published information from departments, and their arm’s length bodies, on the amount of steel procured over the last financial year, and the application of the steel procurement guidance. Departments have confirmed that, where applicable, the guidance for steel procurement has been fully complied with on major projects, and we will continue to work closely with these departments and arm’s length bodies to improve procurement guidance awareness, and the quality of the information provided. We have also published an update of the Steel Pipeline, signalling upcoming steel requirements for national infrastructure projects to UK producers and suppliers.

The Government has carefully considered the case for removing plant and machinery (P&M) from business rates valuations, but has decided against doing so. Most process P&M is not rateable, and removing service P&M from rating would mean exempting equipment which is integrated into buildings such as heating, lighting, and plumbing.

Secondary information

Type

Written question

Reference

239886

Session

2017-19

Subjects

Finance Electricity Iron and steel Manufacturing industries Business rates Procurement Prices

Link

View this Written question on www.parliament.uk