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Struggling UK steel sector needs broad government support: MPs

LONDON (Reuters) - Britain's steel industry needs a comprehensive government strategy to boost the sector, which must be a priority in negotiations on Britain's exit from the European Union, a cross-party parliamentary report said on Monday.

The "Steel 2020" report urged the government to take 43 actions to revive the sector, including cutting energy costs for the industry, fighting cheap Chinese imports and ensuring British steel is used in public projects.

Launching the report, Labour member of parliament Stephen Kinnock said steel had to be a priority sector as "the key foundation industry" underpinning other manufacturing.

Also on Monday, the government outlined its industrial strategy to develop core industries, such as car-making, heavily reliant on steel, but did not include steel itself.

Kinnock's constituents include workers at the Port Talbot plant, Britain's biggest steel facility, owned by Tata Steel UK <TISC.NS>, which faces an uncertain future as talks continue on a possible merger with Germany's Thyssenkrupp. <TKAG.DE>

He said the sector was in "an existential crisis" because of a flood of imports at low prices from China, which 10 years ago accounted for about a quarter of global production and now is responsible for around half.

The size of British industry has shrunk by 59 percent since 1995, Monday's report found, to around 34,000 employees including in processing.

The Steel 2020 report by the University of Leeds Business School said Britain's decision to leave the EU had presented opportunities as well as threats, estimating the post-Brexit fall in sterling had made steel exports 15 percent cheaper on average and increased the cost of Chinese steel by 15 percent.

But trade defense measures were vital to the industry's survival and it called for the design of "a new trade defense strategy for the steel industry on our own terms".

Industry body UK Steel had supported remaining in the European Union and, like the report, said the steel industry needed to secure the best possible access to the EU single market.

Gareth Stace, director of UK Steel, said the government's publication of an industrial strategy was an important first step.

"It’s clear that much still needs to be done in reaching a sector deal," he said.

(Reporting by Eric Onstad and Barbara Lewis; Editing by Dale Hudson; Editing by Dale Hudson)