British steel unions and industry have welcomed the UK government’s plans to change its procurement rules governing the use of steel in major public sector projects, in a boost for the sector including Tata Steel’s UK operations.

The government will extend procurement guidance to projects below £10 million, and those from local and health authorities, Business Secretary Greg Clark announced on Tuesday. This will require projects below this threshold to consider the social and economic impact of the steel used.

“I don’t want contracts going abroad if the best value for money bid is a British bid with all the social and economic benefit that it brings,” he said in a statement. “By updating our procurement approach on these major infrastructure projects we are creating a level playing field for the UK steel industry.”

Govt-funded projects

The move would “ensure that more UK produced steel will be used in a greater range of government funded projects,” Gareth Steel, Director of UK Steel, said in a statement.

The projects likely to be included are rail and road infrastructure, the construction of public buildings such as prisons, hospitals, and schools, flood defenses, and energy related projects. “We welcome today’s change to procurement rules as another step towards a joined-up industrial strategy that supports our steel industry,” said Roy Rickhuss, General Secretary of the Community Steel Union, who added that it was an issue that industry and unions had raised with the government over many years.

“The changes the government made last year were a step in the right direction and showed they were starting to listen to the voices of steelworkers and their employers. Now we need to see today’s changes put into practice so that UK companies are winning contracts and we can continue down the path towards a sustainable future for our steel industry.”

Britain’s steel industry has gained from the drop in the value sterling since the Brexit vote but remains under pressure from high energy prices and “dumping’ of steel on the European market from countries such as China.

It has long campaigned for a national industrial strategy that addressed the high cost of energy, and other costs such as business rates (taxation on business properties), and has pushed for the public sector to support the sector more through using British produced steel in infrastructure projects.

The government will also publish indicative future steel requirements annually to help the sector plan and bid for government requirements. Data published on Tuesday showed that three million tonnes of steel would be used in infrastructure projects by 2020.

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