Tax breaks for steel industry

Amidst news of steel producers across the country laying off workers and closing facilities, Business Secretary Sajid Javid has hinted at tax breaks for the beleaguered industry in a bid to cut costs and prevent closures.

The first news was when SSI Steel closed its blast furnace and coke ovens in Redcar, and Tata Steel cut jobs at its sites in Scunthorpe and Lanarkshire, meaning the likelihood of the loss of thousands of jobs.

Manufacturing generally is suffering, with official figures suggesting that the sector had shrunk by 0.8 per cent in August on a year-on-year basis, although the figure was slightly ahead of July’s. Unfortunately, the CIPS Market UK Manufacturing Purchasing Managers’ Index (PMI) suggested that September had also been a weak month.

However, of all the manufacturing industries, steel has been the worst hit, with the industry blaming this on relatively high electricity prices and the extra cost of climate change policies. In addition, there are allegations that the Chinese have been selling steel in the UK at unrealistically low prices.

Now, with the threat of even more job losses at Caparo in the Midlands, which has gone into administration, Mr Javid said that tax breaks could be given to steel producers to prevent the slide of the industry.

Speaking in the Commons this week he suggested that the Government could cut business rates for steel producers and would try to ensure that UK steel producers won contracts to provide steel to major infrastructure projects. However, he added that no government can change the price of steel in the foreign market.