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Top construction firms urged to back steel charter as Build UK works on new guidelines

A charter designed to support the UK steel industry will have little impact unless more major construction firms sign up, sources close to the situation have warned.

So far, only two tier one firms – Balfour Beatty and Morgan Sindall – have put their names to the Charter for Sustainable British Steel, which was established last year in an effort to protect domestic producers in the face of a glut of imports, particularly from China.

Last weekend, business secretary Sajid Javid unveiled new procurement guidelines for public sector clients that encouraged them to buy British steel after the industry was rocked by the news that Tata Steel will sell its UK businesses, putting up to 17,000 jobs at risk.

However, a senior figure in the steel industry has warned that leading contractors hold the key to ensuring the charter is a success.

“It’s construction companies that need to sign up to make any difference at all,” the source said. “If I was a construction company, there’d be no question that I’d sign up to it; we want to know our steel comes from sustainable sources.”

The charter’s campaign team are in discussion with Build UK and a number of its member firms, which are developing guidelines for steel procurement.

A Build UK spokesman said the guidelines would be “in line with the approach the government is taking” and would “address the barriers that prevent British-based steel producers competing effectively for contracts”.

Although EU rules prevent companies from being forced to buy UK-produced products, the existing charter would see signatories pledge to use rebar that meets a standard known as BES 6001, which is met by leading UK manufacturers but not by a large number of importers.

Tim Knight, a member of the campaign team, said: “We want to make sure there is a genuine consultation with the steel industry and a workable solution to the problem is agreed.

“It is essential that any guidance contains a reporting mechanism so companies can demonstrate when they are buying British steel. The stakes are too high to risk getting this wrong – time is running out.”

Another source close to the discussions expressed frustration that firms had been reluctant to sign up to the charter.

“It’s disappointing, the support from the rest of the construction industry,” the source said. “It’s the private sector that needs to step up, as they are the ones buying the steel and if they are buying from China or Turkey or elsewhere then the British industry will collapse, as we are already seeing is happening.”

The new government guidelines, which apply to clients including Network Rail, Highways England and the NHS, have been designed to help the UK steel industry claim a significant slice of the anticipated £300bn to be spent on infrastructure projects over the next five years.

Mr Javid said: “I am determined to make sure we do all we can to secure a sustainable future for UK steel and find a viable solution that supports the workers and wider community.

“By changing the procurement rules on these major infrastructure projects, we are backing the future of UK steel – opening up significant opportunities for UK suppliers and allowing them to compete more effectively with international companies.”

Last October the government brought in new guidelines that required all central government departments to consider the social and economic impact of the steel they sourced for major projects.

Despite the move, Mr Javid has been criticised for his handling of the crisis, with shadow chancellor John McDonnell calling for the prime minister to sack his business secretary.

“He is clearly making it up as he goes along,” Mr McDonnell told the BBC. “We need leadership and direction and so do steelworkers, their families and their communities. Sajid Javid should consider his position or David Cameron should consider getting someone in who can actually do the job.”

Meanwhile, Liberty House has emerged as a potential buyer for Tata’s UK steel mills.

Owner Sanjeev Gupta will meet Mr Javid today to outline his plan, but told Radio 4’s Today programme that he believed he could turn around Tata’s loss-making plants.

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