en.Wedoany.com Reported - Amanda Brooks, Interim Permanent Secretary of the UK Department for Business and Trade (DBT), has warned that the upcoming new steel import tariff policy could force some small and medium-sized enterprises (SMEs) that rely on imports to close down.
Brooks stated at a Public Accounts Committee (PAC) meeting on Monday (June 22) that the steel tariffs, originally designed to bypass small businesses, may ultimately still impact companies that depend on imported products such as specific types of steel pipes. These businesses will need to use quotas and pay over-quota tariffs.
When Labour MP Clive Betts, representing the Sheffield South East constituency, asked whether this would jeopardize the survival of some businesses, Brooks responded that this was likely the case. Under the new rules, from July 1, the total steel import quota will be cut by 60%, and the import tariff on steel will rise from the current 25% to 50%.
During the parliamentary meeting, Betts noted that some companies in his constituency have no choice but to purchase imported steel, as UK domestic companies are only willing to sell a year's supply in a single batch. Betts emphasized that these businesses cannot afford to pay this amount upfront and lack storage space. He stated that SMEs may have to raise funds from shareholders to purchase steel, further increasing costs. Betts cited an example of a small company with very low profit margins, warning that it would go bankrupt if this continued. He called on the government to consider measures to protect SMEs, acknowledging that they are effectively unable to avoid the impact of the measures introduced.
Brooks said she would look into the matter and acknowledged that the department is dealing with a highly challenging situation, needing to balance the interests of downstream users and domestic producers. Previously, industry leaders had criticized the tariff increase. Mark Reynolds, Chairman of Mace Group, described the announcement in March as untimely and unhelpful.
The PAC meeting also discussed the government's May decision to nationalize British Steel. The National Audit Office estimates that this process could cost up to £1.5 billion. When asked about the cost to taxpayers and the timeline, Brooks stated that she could not provide a strict timeline, as the department needs to take over the business, appoint a board, and improve the company's financial situation. She noted that the turnaround work cannot be resolved at an extremely fast pace because the transformation work being understood is very complex.
Lorna Gratton, On-Site Managing Director of UK Government Investments (UKGI), added that UKGI is a company wholly owned by the Treasury, acting as a shareholder on behalf of the government in major corporate entities and projects. The construction timeline is also a variable, depending on multiple factors, some of which are not directly within the government's control. Ministers still need to decide how to operate during the transition period and whether to replace blast furnaces with electric arc furnaces.
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