It's probably not a bad idea. Steel is one of the things that an industrialized country needs to produce to protect its own sovereignty. Letting it shut down and just hope you'll always be able to import enough steel from other countries is a bad long-term strategy. You'd be left unable to fend for yourself.
Yep, same can be said of manufacturing capability in general. If you don't have a manufacturing base then inevitably when there's a war you may find yourself unable to build defense components.
Russia has been forced to cannibalize jet planes because sanctions have starved it of spare parts.
Even the US Navy gets its ships built in South Korea now.
Britain's remaining industries are very niche. With a small domestic market, you can't get economies of scale. You have to specialize.