The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Lee Rowley)
Thank you, Mr Deputy Speaker, for the opportunity to speak this evening. I am grateful to the right hon. Member for Alyn and Deeside (Mark Tami); I congratulate him on securing this very important debate for him and his constituents. It is important that we celebrate this extremely important milestone for his constituency and for north Wales in general, so I am grateful for the opportunity to contribute to the debate and respond on behalf of the Government.
I confess that I do not know a huge amount about Shotton steelworks—I come from a very different part of the country—but it has been very helpful to hear all the history that the right hon. Member has outlined so clearly and cogently in the past 20 minutes or so. From the little I do know, I know that there are many reasons to celebrate the 125th anniversary of Shotton Works. One reason is the history that he went through; it has been fascinating to hear about the contribution that Shotton has made for so long, the deeply embedded history within the community and the opportunities that Shotton has had over a century and a quarter. Its contribution over such a long time includes producing millions of tonnes of steel sheet to build shelters for the population in the second world war, for example.
The hon. Member for Newport East (Jessica Morden) highlighted the interaction of steelworks, across Wales and more broadly. Shortly after being appointed Minister for industry, I had the privilege of visiting Tata’s plant at Port Talbot. It was an extremely interesting and useful visit: I was impressed by the scale of the plant and the level of integration of systems. I have not yet had the opportunity to go to Shotton, but I look forward to doing so. I am aware that Shotton steel can be seen in a huge number of places, from IKEA stores to Jaguar Land Rover showrooms and even the Old Trafford stadium. The sculpture commissioned to mark the anniversary showcases the best of the plant’s products and will be a proud reminder of this milestone.
In highlighting the constant evolution and innovation of the Shotton plant, I pay tribute to the very regular discussions about Shotton over so many decades in this place, not least because of the contributions from the right hon. Member for Alyn and Deeside as its constituency Member of Parliament since 2001. He mentioned his predecessor, Barry Jones, who was just as assiduous a contributor on the issue; Barry Jones’s predecessor, Eirene White, was talking back in 1954 about how Shotton steelworks had secured
“a…record in steel production.”—[Official Report, 24 November 1954; Vol. 533, c. 1337.]
It was a pleasure to work through Hansard for a little while this afternoon to understand the history of Shotton’s relation to this place. I think it was talked about as long ago as November 1948, when there was a big discussion about whether iron ore should have been brought over from Birkenhead or sourced from elsewhere.
I know, on a personal level, how important this is to the right hon. Gentleman’s constituency. My own constituency is not particularly steel-based, although there is plenty of steel nearby, but it has a proud industrial heritage and a proud industrial past, and is making its way towards the coming decades of the new industry that the right hon. Gentleman is so keen on. Speaking as the Member of Parliament for North East Derbyshire as well as the Minister for industry, I know how important Sheffield steel is to local communities, and I know that it has been integrated in the histories of those communities. I have no doubt that that applies as much to steel in Wales as it does to steel in Sheffield.
My constituency has faced similar challenges. We had a steelworks back in the 1870s, a little before the right hon. Gentleman’s steelworks began, but it closed overnight in 1883, and all the activity was moved up to Cumbria. Although it was on a very small scale and long before my time, I am well aware of the huge interaction involved, and of the huge importance of the steelworks industry in general to local communities.
I applaud Shotton’s commitment to becoming carbon-neutral by 2040, and the efforts that have been made so far. For the past 15 years the site has run a scheme offering to offset customers’ carbon emissions, and as a result more than 130,000 tonnes have been offset via investment in clean energy projects in the developing world. I also pay tribute to its work with Natural Resources Wales to create bird habitats: I understand that 20,000 tern chicks have flown from the breeding grounds created in the lagoons. That is a brilliant example of the way in which industry and nature can co-exist.
I know how important Shotton and its history are to the right hon. Gentleman’s constituents, but I also know that we have the shared aim of securing the future of steelmaking in this country, particularly in the areas where it has a history and has thrived for so long. Although he and I may not agree on every element of the speech he has made tonight, I know that how assiduous he is, and how keen he is to see more progress and improvement. Let me now deal with a few of his points, in the spirit of constructiveness that has been set by the debate.
I recognise the challenges that the right hon. Gentleman has identified in suggesting that the Government are not taking steel seriously, but I would urge some caution. While there is no doubt that challenges will be coming our way in the next few decades, I believe that for a number of years the Government have demonstrated their willingness to support the UK industry where necessary to maintain its resilience. Mention has already been made of the subsidies that have been provided to support electricity for the steel industry, and for other energy-intensive industries, over the past decade or so. The industrial energy transformation fund is helping to transform steelmaking in Wales, and a project is going on there right now. The net zero hydrogen fund is coming, and funds are currently in place for the Materials Processing Institute to increase efficiency, reduce emissions and improve competitiveness.
I accept that gas prices are high at the moment: there can be no argument about that. They are volatile, and have been for some months. At some points in 2020, they were low in relation to where they have been historically, but they are now relatively high. However, I hope that the support that we have provided for energy-intensive industries since 2013 has mitigated that to some extent, and we have confirmed that it will continue.
Lee Rowley
I know that the right hon. Gentleman will not expect me to accept that point. We accept that there is a challenge with energy prices at the moment, and we understand that that is a cause for concern for a number of energy-intensive industries, including steel, ceramics—which I debated with a number of colleagues in this Chamber and beyond in another place last week—glass and paper. We are keen to understand the detail, and it is important that we recognise that there is nuance in this debate and that different strategies are being employed by different companies.
There are also different contexts in which these energy prices are applied. A diverse group of industries are impacted by gas prices. Efficiencies are being pursued in some places, and there are hedging strategies in others. I accept the right hon. Gentleman’s challenge that energy prices are high, albeit volatile and variable, but I hope he will also acknowledge that we are really trying to work with the industry and the sectors to understand the different challenges presented by high gas prices, and that we will continue to do so over the coming weeks and months.
Matt Western
I applaud the Minister’s ambition in seeking to address energy costs in the energy-intensive industries that he has just identified. Would he welcome and support a move towards a greater number of onshore wind turbines, which would be one of the best providers of low-cost energy to this country?
Lee Rowley
If the hon. Gentleman will forgive me, I will not set out our energy strategy on wind turbines today. That would be a matter for one of my colleagues in the Department. The broader point that he makes, however, is that over the coming decades we need to decarbonise our electricity supply. We have had some success in doing that over the previous decades. By doing that, through whichever process we can achieve it, we will ensure that we have clean and green energy to support industries such as we are talking about today.
I just want to touch on a couple more points before I close. The right hon. Member for Alyn and Deeside highlighted his concern that the Government do not focus on steel. I would not accept that point. In the 10 or so weeks that I have been the Industry Minister, I have already visited two steel mills and had regular conversations with the companies involved. I have met them on a number of roundtables and will continue to do that. On a broader level, we had the announcement at COP26 and the Glasgow breakthroughs, and we will be working with a number of countries around the world to ensure that we can decarbonise the industries that are more challenging to decarbonise. That indicates a desire to find ways through difficult challenges where there are no easy answers, and the Government and communities are trying to work through how to do that.
One way is through hydrogen, as the right hon. Gentleman highlighted extensively in his speech. He was somewhat sceptical about the UK Government’s activities in this space, but I want to place on record for completeness that there has been significant movement on hydrogen in recent months. We had the publication of the hydrogen strategy in August, the hydrogen business model is being consulted on, and the net zero hydrogen fund stands at nearly £0.25 billion. We also have the UK low carbon hydrogen standard. Of course there is much more to do on that, which is why we are putting in place the frameworks for that to happen, but I hope that that demonstrates an intent from the Government to explore the possibilities around hydrogen.
Finally, I want to touch on procurement, because I know that that was an important part of the right hon. Gentleman’s speech.
Nia Griffith
Just before the Minister moves on to procurement, may I say that it is disappointing that he does not seem to have taken on board the seriousness of the issue of energy costs? They were 61% above those of our major competitors before any of the crises and conditions that we now face. I ask him to take this seriously now, and to go back and have a real think about what we are going to do, because we are genuinely facing the extinction of our steel industry if we cannot be properly competitive.
Lee Rowley
I am grateful to the hon. Lady for highlighting that this issue is vital to companies across Wales and across the country, and I reiterate that we take it seriously. In recent months, much of my time as Industry Minister has been spent on meeting and speaking to those affected to get into the detail of their concerns and how they are affecting individual companies and individual sectors. A diverse range of sectors are affected, and we will continue to work with industry to see what is possible within the wider context of volatile and variable gas prices over the coming months.
The right hon. Member for Alyn and Deeside highlighted his concern about procurement, and I gently highlight the procurement taskforce, which is currently under way. A substantial amount of procurement in the public sector is supported by UK steel. Last year more than £100 million-worth of UK steel was procured by major public projects in the UK. Network Rail reports that 85% of the steel it took in during 2019-20 was from UK producers, and High Speed 2 reports that all of its structural steel is from UK producers. We know that UK steel is a brilliant product, and we know it has brilliant opportunities. We want it to be able to take those opportunities both in the UK market and globally in the years ahead.
I hope it is recognised on both sides of the House that the importance of the UK steel industry to resilience and ensuring we have a clear pathway is taken as read. Steel is important to the UK and to the UK Government. We have given it substantial support in recent years, and we will continue to consider what is possible in the years ahead. We recognise there are challenges and the work continues, but I thank the right hon. Gentleman for securing this debate and for providing me with the opportunity to respond. I wish Shotton all the best in the next century and a half.
Mr Deputy Speaker (Mr Nigel Evans)
From this proud Welshman, will you take the very warm wishes and congratulations of everybody at the House of Commons to Shotton steelworks, to the current workforce and to the former employees and their families, and will you congratulate them all on this incredible milestone?
Question put and agreed to.