UK energy and steel to be classed as ‘nationally important’ in procurement shift

Britain’s steel and energy sectors could be classed as “nationally important” to UK security under new procurement rules aimed at giving homegrown industry an edge over foreign firms.

Public sector buyers would be able to avoid normal requirements to consider overseas bidders and instead give priority to domestic firms under the plans set out in a consultation launching on Wednesday.

Ministers would be allowed to designate sectors such as steel, energy and cyber nationally important in order to help grant them more of the £400 billion spent on procurement each year, the Government said.

Chancellor of the Duchy of Lancaster Pat McFadden said the proposals would ensure British industry was supported and “boost growth”.

“The new rules being considered will give us the power to protect our national industries, ensuring more money goes to them as we buy goods and services in Government,” he said.

The Government said the new rules will also ensure buyers exclude companies that cannot provide evidence of a good record of paying companies in their supply chains promptly and on time in a move to protect small businesses.

New guidance will also require Government departments to consider British steel products for the £725 billion of UK infrastructure spending over the next 10 years announced in the industrial strategy on Monday.

UK Steel welcomed the proposals, describing them as “unequivocally positive news” that would help safeguard jobs in the industry.

Director general of UK Steel, Gareth Stace, said: “These changes rightly recognise the strategic importance of steelmaking to national security and the vital role of resilient domestic supply chains.”

It comes as the industry faces uncertainty over the US-UK trade deal finalised this month, which slashed tariffs on aerospace and auto sectors but left levies on steel standing at 25% rather than falling to zero as originally agreed.

The Government has said both sides have agreed to “make progress towards 0% tariffs on core steel products” in ongoing talks.