Boris Johnson’s ex-aide calls on ministers to slash energy costs for steel firms

The Mirror has been campaigning to Save Our Steel since 2015

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Boris Johnson's former aide has piled pressure on the Prime Minister over high energy costs for the steel industry.

Lord Udny-Lister, who as Sir Eddie Lister was the Premier's chief strategic adviser and later Downing Street chief of staff, also called for a tax on scrap metal to boost the UK sector.

Speaking in a Lords debate, the Conservative peer warned Business Minister Lord Callanan: “The steel industry is badly under-capitalised and needs investment both in labour and in capital so it can modernise.”

He urged the Government to “look again at energy costs because even with the Government's subsidy that has been put in, they are still way above our European competitors – and certainly way above our Far Eastern competitors”.

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The peer was Mr Johnson's chief strategic adviser and later his chief of staff
(Image: Fulham Chronicle)

The Mirror told this year how cash-strapped British metals’ firms pay twice as much for electricity as French rivals and 50% more than German counterparts.

An industry study, The Energy Price Scandal: A Fair Power Deal for UK Steel, showed the average electricity price for steel producers in the UK is about £65 per megawatt hour (Mwh), compared with £31/MWh in France and £43/MWh in Germany.

Businessman and Labour peer Lord Allen of Kensington warned that “energy costs that apply to steel production” were “a very severe problem” for the industry.

They are “far, far higher than our foreign competitors”, he added.

Electricity costs for UK firms are higher than foreign rivals'
(Image: PA)

Lord Callanan insisted: “We have provided more than £550million to the steel sector for their electricity costs, but we keep these matters under constant review.

“We are aware the problems of high electricity prices do cause for the sector.”

Labour hereditary peer Viscount Hanworth urged the Government to help steel firms switch to electric arc technology, which is better for the environment and cuts carbon emissions.

He said: “If Britain is to have an industrial future then it needs a domestic steel industry – and it needs a low carbon one to replace one that is a large emitter of carbon dioxide, as are the foreign industries from which we have been importing increasing quantities of steel”.

The industry is a big consumer of energy
(Image: PA)

Lord Udny-Lister also called on ministers to “look seriously at putting a tax on scrap metal, which would of course ensure that scrap metal stayed in this country and was used in the newer electric arc furnaces and make them viable”.

Keeping scrap metal in the UK would mean it could be recycled here rather than shipped abroad for processing.

Lord Callanan said: “We want to ensure the metals recycling market continues to work effectively for all stakeholders, whether that's metal recyclers, steel producers or the cast metal sector.”

The Mirror has been campaigning to Save Our Steel since the industry was hammered by plant closures and thousands of job losses in 2015.

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