The government must establish a new steel sector deal to ensure the UK industry remains competitive, says the business, energy and industrial strategy (BEIS) committee.
In its latest report, the committee argues it could resolve long-running issues in the sector such as high energy prices and barriers to supplying steel for major public projects.
The deal could also protect jobs and offer a clear decarbonisation plan for the struggling sector.
Darren Jones, chair of the business, energy and industrial strategy committee, said: “Steel is a national strategic asset, a foundation industry, and a sector which the UK cannot afford to lose.”
The report criticises the government for the lack of a clear roadmap for decarbonising steel.
The UK is aiming reach net zero by 2050 and to cut emissions by 78 per cent by 2035.
It believes the absence of a detailed government strategy has caused the industry to put decarbonising plans on hold.
Consequently, it argues any sector deal should include a cohesive decarbonisation plan based on the Steel Council’s report later this year.
The report also urges the government to consider a formal fit and proper person test for private company directors within any future steel sector deal.
In particular, the committee put the boot in to GFG Alliance’s Liberty Steel, which has been suffering from financing issues and has been operating at night to reduce costs.
It criticised owner Sanjeev Gupta for giving staff executive titles without the required decision-making powers or information necessary to perform their duties.
The committee has called for an investigation into King & King – the auditors of a number of GFG Alliance businesses.
The report finds it “utterly unconvincing” that “King & King had the capacity, expertise, or resources to audit the accounts of multiple large GFG Alliance and Liberty Steel UK companies representing over £2.5 billion of revenue”.
They also suggest the Insolvency Service should consider whether Gupta has breached his fiduciary duties as a company director.
Jones said: ““The systemic issues at the heart of GFG Alliance has highlighted the vulnerabilities of Liberty Steel and its place in the wider steel sector in the UK.”