The steel industry has made a last ditch attempt to persuade the Government to raise domestic taxes in order to lower the value of sterling. It claims the high pound has already cost the sector £1.2bn in lost exports.
The UK Steel Association has written to chancellor Gordon Brown warning of the threat to manufacturing industry if the pound remains high.
UKSteel wants deflationary tax measures, precision-targeted on the domestic sector of the economy.
‘Our chief concern, as key suppliers to the manufacturing sector and as major exporters in our own right, is the value of sterling.
‘We estimate that, since May 1996 when the value of sterling began to rise, over £1.2bn has been lost by the UK steel industry in export revenues.’
Michael Robson, president of UK Steel, said the fall in revenue would inevitably result in lower investment, which would itself damage the competitiveness of the UK steel industry, and lead to lower employment levels.
‘We appear to be heading towards what could be a significant downturn in manufacturing activity,’ said Robson.