Ed Miliband and the UK’s net zero target are being falsely blamed for the UK’s steel crisis, experts have said.
On Saturday, parliament passed a law containing emergency powers to gain control of the last remaining maker of mass-produced virgin steel in England, based in Scunthrope, after its Chinese owner, Jingye, declined government support to keep the plant running over the next few weeks.
Some parliamentarians and media commentators placed the blame for Britain’s declining steel industry on the energy secretary, claiming that his net zero policies and lack of support for a proposed coalmine in Cumbria had made the energy and coking coal used to make steel more expensive.
During Saturday’s debate, the shadow business secretary, Andrew Griffith, said: “No one is more responsible for this than the energy secretary and the prime minister who appointed him.”
Andrew Neil blamed Miliband and what the broadcaster described as “net zero nonsense”, saying: “And now Miliband has the audacity to pose as the saviour of British steelworkers. In truth, the British political class has shamefully failed them, none more so than net zero zealot Miliband.”
The rightwing media were critical of Miliband, with calls for him to be reshuffled from his position and several pieces blaming the energy secretary for the perilous position of the Scunthorpe site.
But experts have said this characterisation is completely false. Prof Rob Gross, the director of the UK Energy Research Centre said: “The clean power mission can actually help save the steel industry.
“High energy prices in the UK undoubtedly play a role in the problems faced by steelmakers. But high energy prices are absolutely not created by net zero policies. Britain is acutely exposed to fluctuations in gas prices, and the gas price also drives UK electricity prices more than in other countries.
“Britain’s amazing wind resources offer the potential for cheap, stable energy prices. We need to build the infrastructure of clean power so we can have cheap power for decades. The drive for clean energy also creates a large demand for steel, for wind farms, nuclear power stations and pylons.”
Conservative and Reform UK MPs claimed the cancellation of a coalmine in Cumbria had led to the decline of British steel. The Tory MP Graham Stuart said: “We have a government which is shipping coking coal from Japan when it was perfectly possible to have the greenest production of coking coal in the world in Cumbria with thousands of jobs.” Richard Tice, the deputy leader of Reform, said the government had “declined” the “opportunity to use British coal from Cumbria”.
But the coking coal that was to be produced from this mine would not have been of a high enough quality to be used in the Scunthorpe steelworks, with at least 85% of it earmarked for export. This is because of its high sulphur content.
Jess Ralston, the head of energy at the not-for-profit Energy and Climate Intelligence Unit, said: “Lingering but persistent high energy prices, triggered by gas prices soaring around the invasion of Ukraine, have been the final straw for Scunthorpe and Port Talbot. The reality is that net zero actually means energy independence from volatile gas markets influenced by foreign actors like [Vladimir] Putin.
“British Steel itself admitted that it couldn’t use coking coal from the proposed coalmine in Cumbria on its own because the sulphur content is too high, and the mine operators admitted that 85% of the product would be exported, so it’s far from the silver bullet that some are claiming it is.”
Ralston added that the British steel industry had been in long-term decline since the 1970s, when Miliband was a child, and decades before net zero was signed into law. In 1971, there were approximately 323,000 steel workers in the UK. By 2014, that figure had dropped to 34,500.
A Labour source pointed out that UK Steel said last year: “The main driver of the price disparity is now wholesale electricity costs, driven by the UK’s reliance on natural gas power generation.” They added that gas set the price 98% of the time in the UK, compared with about 40% on average across the EU.
The source said: “Our mission is for clean power by 2030 because clean, homegrown energy is the best way to protect billpayers and boost Britain’s energy independence. We are already bringing energy costs closer in line with other major economies through the British industry supercharger, which reduces network charges by 60%. This fully exempts eligible firms from certain costs linked to renewable energy policies, particularly those exposed to the high cost of electricity, such as steel.”
Other countries including Germany, Sweden and China have industrial strategies to subsidise steel and keep the industry going. Experts said the UK’s failure to have a strategy for steel was the problem, rather than net zero.
Sam Alvis, associate director for environment and energy security at the IPPR thinktank, said: “It’s a nonsense to think that the struggles of the steel industry are because of climate policies, let alone those of someone who’s been in the job since July. Steel has struggled because of nearly two decades of mismanagement and rising global competition.
“Energy prices might be a contributing factor but those are driven by gas, not net zero – and the rising cost of inputs like iron ore and coking coal are also to blame. The steel industry has been crying out for strategic direction for years. The government’s clear commitment to clean manufacturing and supply chains and therefore low-[CO2] steel finally brings that much-needed clarity.”
