Britain’s deepening dependence on foreign steel fuels national security fears

Britain’s increasing reliance on foreign steel has become a national security risk as the world fractures into competing blocs, defence experts have warned.

A lack of domestic access to steel poses a threat to the defence industry and could make it harder to produce weapons for the armed forces, according to new research by the Royal United Services Institute (Rusi).

The issue is increasingly pressing as globalisation goes into reverse following the Russian invasion of Ukraine, and China increasingly competes with the West in the military arena.

It comes after two of the UK’s biggest steelmakers lobbied for taxpayer money to help decarbonise their plants, amid concerns that the cost of going green will otherwise lead to closures.

Indian-owned Tata Steel and British Steel, which belongs to the Chinese business Jingye, say they need £600m between them to switch to greener steel making.

The UK industry has been shrinking for many years. Already, some grades used in defence are not available in Britain and must be purchased from Sweden.

Rusi suggested a plan to decarbonise the steel industry in a similar vein to the North Sea Transition Deal, which had the Government, companies and regulators co-operate to switch the oil and gas industry to greener fuels.

The think tank called for a proposal to fund the upgrade of old, dirty steel mills and harness more recycled metal.

Rusi said: “Any policy approach seeking to minimise national security risks should begin with the premise that UK national security and economic resilience may be seriously impaired by further major reductions in the UK steel industry’s overall product range and market share.”

The UK makes 7.2 million tonnes of steel, less than half of the 17 million tonnes it uses, according to statistics from UK Steel, the industry body.

Britain is now only the eighth biggest producer in Europe, behind Austria and Belgium. China dominates the industry, making half the world’s steel. Being in China’s thrall for a key product for any industries, not just steel, could be an error, the report says.

In the late 1960s, the UK was the world’s fifth largest steel producer. It fell to 10th by the 1980s and 18th by 2015.

Innovation in the defence industry is in danger of stalling if it becomes harder to get hold of steel, Rusi said. Meanwhile, British defence contractors might lose out on work if customers felt they could not obtain the necessary raw material.

The think tank added that designs for crucial steel products would be at risk of falling into the hands of unfriendly governments if plants were sold off.

It came as analysts at Citigroup warned that price rises in aluminium and nuclear fuels could be on the horizon if Russia chooses to weaponise them.

The materials are as yet free from western sanctions and supply could be slashed in an effort to destabilise Western production, they warned.