Tory mayor warns of plot to end British steel production in favour of Chinese alternative via Brazil

Exclusive: Lord Ben Houchen raised fears have been raised that the UK will lose domestic steel production for the first time since the Industrial Revolution

Closing British steel blast furnaces in Scunthorpe would affect the supply chain, he warns (PA)

One of Britain’s leading regional mayors claimed Keir Starmer’s government is preparing to abandon British-produced steel altogether and replace it with Chinese steel diverted through Brazil.

Lord Ben Houchen, the Conservative Party mayor of the Tees Valley, raised the concern in an interview with The Independent after thousands of jobs were lost at the Port Talbot steelworks in south Wales when blast furnaces were closed down.

But Lord Houchen’s biggest fear is the steelworks in Scunthorpe in the North East which he believes there is a secret deal to shut down and supply steel from Brazil instead.

Worse still, he claims the agreement will make it look like the steel comes from South America, but is really being produced in China.

Lord Ben Houchen, mayor of the Tees Valley, is worried about the future of steel production (PA)

The Scunthorpe steelworks has a Chinese owner, Jingye.

It currently is part of a £1.25bn decarbonisation plan, which could lead to 2,000 redundancies according to unions, with a total of 4,000 employed in steelworks in the Lincolnshire town.

Lord Houchen claims Labour has broken its promises to steelworkers.

It comes as Lord Houchen has secured £4bn funding for a new Net Zero green energy project at the former steelworks site in Redcar.

He had been accused but cleared of “corruption and cronyism” over the project by Labour, which is now backing the project.

But Lord Houchen has not held back on his criticism of Labour’s treatment of the last remaining steelworks in England.

Recently Martin Vickers told MPs that closing British Steel blast furnaces in Scunthorpe would affect the supply chain (PA)

He said: “I mean, we had a Labour Party in the election saying quite openly they were going to stop the closure of Port Talbot steelworks in south Wales and save thousands of jobs.

“Actually, it's fair to say that if it goes the way I expect it to go, then those workers in Teesside, Scunthorpe and south Wales would have been better off with a Conservative government.

“What is about to happen is that this Labour government has just allowed Port Talbot to close, costing nearly 3,000 jobs directly and about 5,000 jobs going when you look at the supply chain, the businesses and the individuals that rely on those jobs in the steelworks as well.

“But where I think we will end up in the next few weeks is this Labour government will not support Scunthorpe. I think we'll see the final blast furnaces and Scunthorpe close.

“That will cost, again, at least, in total, another 5,000 jobs. And that will actually be the end of steel making in the UK for the first time since the start of the Industrial Revolution.”

Lord Houchen warned it would hit jobs and the economy, and would also be a major security issue because of the steel needed for missiles, weapons, submarines, warships and jets.

But with Chinese steel seen as a security threat, he raised concerns about where it could be supplied from instead.

Business and trade secretary Jonathan Reynolds at the Labour Party conference (PA)

He added: “One of the things I'm hearing behind the scenes is the government are trying to work a deal so it looks like that the steel that they're importing comes from Brazil but it's actually from China being funnelled by Brazil to make it look like it's not coming from China.

“I mean, it's just a ridiculous, ridiculous decision.”

Lord Houchen suggested business secretary Jonathan Reynolds is fighting a rearguard action against the plan, but the move is being pushed by the Treasury to save money.

“What makes me more suspicious is that the Labour MPs in the region are being silent. If they thought they could reverse this they would be making a noise so they could take credit,” he added.

He also said a trade union plan to try to save British-produced steel by giving it priority in British public sector contracts would fail.

“It's all very well and good having preferential treatment for British steel, but in the next three weeks, they're not gonna have any British steel,” Lord Houchen concluded.

The Department for Business and Trade (DBT) declined to comment.

But in a recent statement to the Commons, Mr Reynolds announced a new steel strategy for Britain.

He said: “As part of our steel strategy, this government will look seriously at the options to improve steel capabilities across the whole supply chain, including for primary steelmaking in the UK.

“We are also clear that we won’t be able to prioritise short-term subsidies over long-term jobs. That’s why with the help of independent experts, we will also be reviewing the viability of direct reduced iron in the UK.”