CBM says Government steel strategy is failing UK manufacturing

Stephen Morley, President of the Confederation of British Metalforming

It has taken time, but the full force of the government’s steel policy is beginning to have a devastating impact on the downstream manufacturing sector according to the President of the Confederation of British Metalforming (CBM).

Stephen Morley believes misguided quota reductions, compounded by the inevitable imposition of tariffs, have left metal stockists and manufacturers facing increasing commercial pressures, tighter margins and the prospect of job cuts across the supply chain.

What was designed as a protective framework for domestic steelmaking is now exposing a fundamental flaw - ‘you cannot protect upstream production at the expense of downstream survival’.

Evidence submitted to Ministers by the CBM highlights a growing and systemic breakdown where UK suppliers are unable to meet demand due to minimum batch quantities far exceeding actual needs and having to contend with uncertain delivery timelines.

This is contributing to delays for critical projects, including those tied to government procurement such as the Royal Navy.

“Frustratingly, costs remain undefined and potentially uncompetitive, leaving businesses unable to plan or price contracts with any confidence,” explained Mr Moreley, who has been in the automotive sector for four decades.

“In one case, a UK supplier was told it would have to take a minimum production run of 120 tonnes, when they required just 30 tonnes, forcing a business to potentially hold £80,000 of surplus stock with no guarantee of future demand.”

He continued: “At the same time, the supplier could not confirm delivery timelines due to ongoing uncertainty around its own ownership and production schedule. This is not an isolated issue with this supplier, it is symptomatic of a wider policy failure now playing out across the sector.

“UK manufacturers are being constrained on importing essential raw materials due to quota cuts of up to 98%, while simultaneously being punished with tariffs of 50% when the quota is exhausted. There is also increasing evidence that some materials are not available domestically.

“At the same time, finished goods can be imported without equivalent barriers. The result is a deeply unbalanced system where it is easier to import a finished product than to manufacture one in the UK.”

Real-world consequences
The real-world consequences of this are already becoming clear. Richard Jewitt, managing director of Footprint Sheffield Ltd, one of the UK’s last remaining hand tool forges, has warned that current policy is pushing viable manufacturers toward impossible choices.

“We are now actively reviewing our options, which include scaling back UK production and importing finished goods, increasing prices while reducing the workforce, or winding down production. It’s not a coincidence that we’ve had an Indian supplier of forgings contact us, who we haven’t used for 10 years, after the news came out,” said Mr Jewitt.

The CBM, which represents the interests of 200 members and over 75,000 employees, is arguing that the scale of quota reductions is distorting the market in ways that cannot be managed.
For example, Category 1 hot rolled coil has been cut by approximately 90%, from around one million tonnes to just 100,000 tonnes, while critical specifications, such as 2000mm wide coil, are not produced in the UK at all, yet nearly 100,000 tonnes were imported last year to meet demand.

Mark McCausland, managing director of Sebden Steel asserted: “This leaves a supply gap that cannot be filled domestically, creating artificial scarcity, encouraging monopolistic conditions, and driving instability in both price and supply, which will hit all sectors.”

Unplanned outcomes and offshoring
The unintended consequences of these measures are already emerging. Industry discussions have highlighted an increasing reliance on derivative imports as companies seek workarounds, while domestic producers continue to push for further quota restrictions, exacerbating the imbalance.

There are also clear early signs of offshoring, with major manufacturers increasing procurement from overseas suppliers. One large UK steel user has already confirmed a shift to sourcing a quarter of its components from the Far East, a move that reflects a broader trend. Once this manufacturing capability leaves the UK, it is unlikely to return.

“The government’s approach risks undermining the very industrial base it seeks to protect,” commented Mr Morley.

“Downstream sectors, including manufacturing, construction, and steel service centres, employ significantly more people than primary steel production, yet they are bearing the brunt of these measures. At a time of rising energy costs, wage inflation, and increasing business rates, the addition of punitive tariffs and supply constraints does not represent protection it represents erosion.

“The CBM, alongside other industry bodies, is now calling for urgent intervention. We need an urgent full review of quota reductions and tariff structures, exemptions for materials not produced in the UK, and a more balanced approach that aligns upstream protection with downstream viability. There is also a need for greater transparency and accountability in supply commitments from domestic producers, particularly where government involvement remains.

“Whitehall needs to be more open on where they are in negotiations with the EU on bi-lateral discussions and where meetings have taken place on quotas. We demand the right to provide feedback on these talks and not endure radio silence, before hearing about another announcement that is a ‘done deal’ that we can’t reply to.”

He concluded: This is not the end of the story, it is the beginning. The evidence now emerging suggests that without swift corrective action, the UK risks accelerating the decline of its manufacturing base rather than preserving it.

“Warning signs are clear, and the consequences are already being felt. The question now is whether policy will adapt in time, or whether more businesses will be forced into irreversible decisions.”