Aid hope for UK steel industry after vote

RULES on state aid for the steel industry could be scrapped as a result of the UK quitting the EU, the industry’s trade body has said.

UK Steel said the Government could now act to support British steel makers who have struggled against cheap imports, mainly from China, and against high fuel bills compared with European rivals.

‘It is possible we will no longer be constrained by rules on state aid and we might also see some changes on energy prices,’ said Gareth Stace, UK Steel’s director.

The Government has already pledged to make ‘hundreds of millions’ of pounds available to ease the sale of Tata UK and is prepared to take an equity stake of up to 25 per cent in the business. It is also planning pensions law changes to reduce the cost of the £13 billion British Steel Pension Scheme, which is running a £485million deficit.

German and French energy prices are significantly cheaper than the UK’s. Germany has paid subsidies worth over €9billion (£7.3 billion) to its most intensive energy users since 2013. Over the same period the UK has paid just £160million.

When Tata said it wanted to pull out of the UK in March putting 15,000 jobs at risk it cited high energy costs as a key concern.

Energy costs are higher in the UK than elsewhere in Europe because of Chancellor George Osborne’s decision to impose a carbon tax on industry emissions in addition to that already imposed by the EU.

It means the price heavy industry has paid for its electricity is on average nearly double the EU average.

UK Steel urged a Remain vote in the referendum, citing fears the UK would be in a weaker position to resist cheap Chinese imports.