Britain says government contracts must consider local steel firms

Thomson ReutersA union banner hangs from a fence in front of the Tata steelworks in the town of Port Talbot

LONDON (Reuters) – Britain said on Sunday that all public sector contracts that involve steel supplies must specifically consider UK steel companies as part of plans to find a long-term solution for the country’s steel industry.

The government is looking for ways to support domestic steel producers after India’s Tata Steel put its British plants up for sale, putting thousands of jobs at risk.

Prime Minister David Cameron has said there was no guarantee of a buyer for Britain’s biggest steel producer, but a state takeover was not the answer.

Under its support measures, the government will create an approved supplier list specifically for steel companies wanting to bid for public sector projects, such as Britain’s 55 million pound (55.00 million pounds) high-speed rail link, which will need two million tonnes of steel.

Business Secretary Sajid Javid said on Sunday he was determined to secure a sustainable future for the British steel industry and find a solution that supports workers and the wider community.

“By changing the procurement rules on these major infrastructure projects we are backing the future of UK steel – opening up significant opportunities for UK suppliers and allowing them to compete more effectively with international companies,” he said in a statement.

The introduction of measures to ensure British steelmakers are considered for government contracts could take six to nine months, a spokeswoman for the Department of Business, Innovation and Skills said.

The government has said it is working to broker a deal with potential buyers after Tata Steel’s decision to pull out of its almost decade-long venture in Britain, which employs 15,000 people, and which has been hit by high costs and Chinese competition.

Cameron’s government has faced criticism over its response to Tata’s action, with opposition politicians saying it was “asleep at the wheel.”

The prime minister has said he wants Britain and China to work together to tackle over-capacity in steel and that the G20 could be a good forum to address it later in the year.

Britain imported 826,000 tonnes of Chinese steel in 2015, up from 361,000 two years earlier, according to the International Steel Statistic bureau.

Last week, China imposed anti-dumping duties of up to 46 percent on specialist steel products from Japan, South Korea and the European Union.

(Reporting by Li-mei Hoang. Editing by Jane Merriman)

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