Gareth Stace, director of Steel UK, said Britain is better able to prevent Chinese steel dumping which is contributing to low prices if it remains part of the EU.
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He added that high energy costs are a largely “home grown” problem that can be fixed by the government. EEF believes that just 10 per cent of policy costs added to electricity prices are linked to the EU.
British steel is struggling due to a slew of cheap steel from China, high energy costs, high business rates and a strong pound. Its woes were highlighted when Indian conglomerate Tata Steel announced plans to sell its UK business earlier this year.
"The EU is by far the largest market for steel outside of the UK and common sense dictates that it would be folly to break that link while the sector is battling for survival," Stace said.
He continued: "As a huge trading block, the EU has significantly more clout in discussions with China regarding the need to curb over-production and subsidised exports that are proving so damaging to our sector."
"Further to this, while it has been suggested that a UK free of the shackles of Brussels would be free to implement significant trade tariffs to guard against future dumping of Chinese steel, there is scant evidence that the Government would actually do this."