Supplementary written evidence from the Department for Business, Innovation and Skills (UKS 06)

Thank you for your letter of 4 November. Further to my oral evidence session on the UK steel industry on Tuesday 27 October and correspondence of 5 November, I have addressed each of your points in turn.

Issues in the Industry:

What specific steps were taken to address the key challenges facing UK steel after meetings with the sector in May?

The initial meeting I referred to in oral evidence session on 27 October was with UK Steel and EY and took place on 1 June.

That meeting underlined that there were longstanding and substantial difficulties in the steel sector. I undertook further meetings over the summer, including with steel companies and visits to steel plants, to understand more about their specific problems.

Where the government could act quickly, we did. In July, I ensured the UK voted in favour of extending anti-dumping measures on Chinese wire rod products, in recognition of the acute difficulties facing the steel sector.

Energy Prices and Business Rates:

What progress has been made bringing the package of measures for energy intensive industries into effect?

This government has already implemented a number of compensation packages for energy intensive industries which has resulted in over £50million being paid in compensation to steelmakers for energy costs.

Support for workers affected by site closures

Can you provide a full breakdown of how the £80m support fund is being allocated? (How much to which projects and who are these projects aimed at?)

I would like to refer committee members to my response provided in my initial letter of 5 November to the Committee which sets out the breakdown of the £80m package in detail.

The majority of this funding (and all of the requests for spend in 2015/16) has now been transferred to the accountable body for the SSI Task Force. They are beginning to implement their planned programme of interventions. I have been clear that the Task Force has flexibility in their use of this funding, and have asked them to provide regular updates on these spending plans. I am sure that the Task Force will be willing to share this information with the committee when it is available. If you would like this information, please contact the Task Force chair (Amanda Skelton).

Procurement

Will the Govt adopt the Charter for Sustainable steel? What specific measures will Govt introduce to ensure that there are improved opportunities for UK steel to be successful in major UK procurement projects?

We support efforts to ensure responsible sourcing of steel. We are currently exploring with industry the potential role of the Charter and of other standards in helping to achieve this. The issue has been discussed with Ministers at Steel Working Group meetings, and officials are meeting with industry representatives in the next week to consider further .

We have successfully renegotiated EU procurement rules to allow wider social and economic considerations to be taken into account, and we were the first country to put these into action. We want to go further and drive up the number of public procurement contracts won by UK steel manufacturers. That is why on Friday 30th October, we published new guidelines for departments to apply on major projects when sourcing and buying steel. These new

instructions, spearheaded by the Steel Procurement Working Group, chaired by the Minister for the Cabinet Office, will help steel suppliers compete on a level playing field with international suppliers for major government projects and stimulate competition. They will also provide better visibility of opportunities on major projects and programmes such as HS2 and Network Rail, so that UK steel suppliers will be able to bid.

The Steel Procurement Working Group is currently considering with industry what more could be done through procurement regulations, what increased visibility can be given of upcoming steel opportunities in the National Infrastructure Plan, as well as the aforementioned consideration of standards .

Rt Hon Anna Soubry MP

Minister of State for Small Business, Industry and Enterprise

13 November 2015