British steelmakers now pay almost £30 a megawatt hour more for electricity than their French competitors — the worst gap in three years, according to analysis by the lobby group UK Steel. The immediate driver is a surge in global gas prices linked to the US-Israeli war on Iran, which has pushed up wholesale power costs across Europe. But the gap itself is the story worth pausing on.
Steel is one of the most electricity-hungry industries we have. A few pounds per megawatt hour can decide whether a plant stays open; at £30 the disadvantage becomes existential. This is not simply a corporate problem. Steel underpins construction, engineering and the supply chains of countless manufacturers, and when producers say they cannot compete, the question becomes one of jobs, communities and whether Britain can still make things at all.
The comparison with France is instructive. French industry benefits from a stable nuclear fleet and state-backed tariffs, while Britain’s prices track volatile international gas markets. That is a structural choice built up over decades, not an act of God. The war on Iran did not create this vulnerability; it exposed it.
What good looks like is an industrial strategy that treats energy as infrastructure rather than a pure market outcome: long-term fixed-price power for heavy industry, faster grid connections for renewables, and carbon border measures that prevent decarbonising at home from simply importing dirtier steel. None of these are quick fixes, and some cost money the Treasury says it lacks. But the alternative is already being counted in lost competitiveness.
The same gas shock is landing on households, and the cost-of-living anger rising across Europe this weekend shares a root with the steelmakers’ complaint. Energy policy, industrial policy and social stability are not separate files in a minister’s inbox. Markets are volatile; public confidence is harder to rebuild.
None of this is inevitable. Prices could fall and the gap could narrow. But three years of widening disadvantage suggest Britain’s industrial future will not be secured by hoping global markets stay calm. It will require deliberate choices about what kind of economy the country wants — and who pays the price of the transition.