Lord Hunt of Wirral (Con)
My Lords, the Minister will of course be aware that there would be severe economic and social implications if these blast furnaces are closed, but does she acknowledge there would be vitally important national security concerns as well? Will she ensure that such concerns are taken fully into account right across the Government?
The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Information and Technology (Baroness Jones of Whitchurch) (Lab)
My Lords, as the Minister for Industry made clear on Thursday, this Government believe in the UK steel sector. Of course we take national security issues very seriously. We keep developments in all strategic industries, including steel, under constant review. For example, high-quality steel, including for defence programmes such as the Royal Navy’s new Dreadnought-class submarines, is already being made by UK EAF producers. British Steel is not a critical supplier for other defence programmes.
Lord Fox (LD)
My Lords, I am sure the Minister would join all your Lordships in expressing sympathy to the workers and communities not just in Scunthorpe but in Teesside who have had their steel industries whipped away from them. We have not heard much about the Government’s modern industrial strategy lately. We need one across the country and, as we have heard, we need steel to ensure we have the raw materials for manufacturing and our defence industries. If there is one, can the Minister set out for your Lordships what the Government’s steel industrial strategy is? What are the three key elements of that strategy?
Baroness Jones of Whitchurch (Lab)
My Lords, steelmaking in the UK is absolutely fundamental. We are in the process of developing a detailed steel strategy and we will come back to your Lordships’ House with further details. I make it clear that the Government will simply not allow the end of steelmaking in the UK, despite the situation we inherited, in which there has been a 50% decline in crude steel production over the past decade. We will continue to give steel, and steel in the UK, an absolute priority.
Baroness Redfern (Con)
My Lords, I refer to my interests in the register. The closure of Scunthorpe’s blast furnaces and other steelmaking sectors is devastating news for almost 3,000 workers and their families. British Steel must not allow the final two blast furnaces to close until the two arc furnaces are installed to continue producing steel and ensure customers do not have to rely on international supplies. Will the Minister reaffirm that all options remain open, including a strong national intervention to protect our proud steel industry and ensure that British steel continues to be made here in the UK? Will she also reaffirm support for Scunthorpe’s green growth zone and companies in the artificial intelligence sector?
Baroness Jones of Whitchurch (Lab)
I thank the noble Baroness for that question and reiterate that steel is an absolute top priority for this Government. We have made a generous conditional offer on financial support for British Steel, and negotiations are continuing with the company and trade unions to find the best possible outcome that will protect jobs, steel-making and taxpayers’ money.
We obviously cannot pre-empt the outcome of the consultation process. However, we have extensive cross-departmental contingency plans in place to ensure that British Steel workers, their families and the wider Scunthorpe community will be protected. They include plans to establish a task force, should this become necessary, which will consider and prioritise measures that create jobs and support the local economy through recovery.
Baroness McIntosh of Pickering (Con)
My Lords, is it really the case that neither the Scunthorpe nor the Teesside steelworks will remain open? Does that leave us as the only major country in Europe without any steel-producing facility?
Baroness Jones of Whitchurch (Lab)
The Government will simply not allow the end of steel-making in the UK. We are looking seriously at options for primary steel-making here. With the help of independent experts, we are reviewing the requirements and viabilities of technologies for the production of primary steel in the UK, including direct reduced iron. As I say, steel is an absolute priority for this Government, and we will be producing a steel strategy very soon.
Lord Sikka (Lab)
My Lords, it is good to hear the Minister talk about developing a steel-making strategy, but I am sure that she appreciates that it is impossible to have a successful steel-making strategy without controlling the cost of energy. The cost of industrial energy in the UK is about seven times that of China and three to four times that of France or Germany. I have met steel executives in this place, who are basically saying that their industry cannot survive unless the Government control the profiteering of energy companies. How are the Government going to control profiteering by energy companies?
Baroness Jones of Whitchurch (Lab)
My Lords, we continue to do everything that we can to protect the steel industry. That obviously includes looking at the costs concerned. If necessary, we are committed to providing £2.5 billion to help rebuild the steel industry over the next five years. This will be available through the National Wealth Fund and other routes. We are continuing to look at what further steps need to be taken to protect the steel industry in this country.
Lord Macpherson of Earl’s Court (CB)
My Lords, do the Government agree that in recent years private sector steel producers have effectively had the Government over a barrel in negotiations? Will they commit to protecting taxpayers’ interests alongside the jobs of those working in the steel industry?
Baroness Jones of Whitchurch (Lab)
The noble Lord is right that this is a balance, but there are many good reasons why we need a steel industry in the UK, although obviously not at any price. We have made a significant offer of financial support to British Steel, and I hope that when those discussions continue the matter will be resolved.
Lord Fox (LD)
My Lords, I detected a dissonance in the answers there. At one point, the Minister said that we will always have a steel industry, but she just said “not at any price”. Those two things do not work together, so which is it? Is it we will have a steel industry whatever or there is a price that we will not pay for the steel industry?
Baroness Jones of Whitchurch (Lab)
As I say, we have made a very generous conditional offer of financial support to British Steel and negotiations are continuing. This is a live negotiation, and I cannot comment on commercially sensitive details at this stage, but we believe that our co-investment offer is fair and generous. We call on British Steel to accept that offer and the associated conditions. Obviously, there is a point at which those negotiations will not come to fruition, and we are making contingency plans, but we very much hope that we do not have to use them.
Lord Hunt of Wirral (Con)
My Lords, we should all just reflect for a moment on the agonies that so many families who are so deeply involved in this crisis must be going through. Following the remarks that the Minister has just made, can she give us some idea of the timescale to which the Government are working? She has made much of the fact that a generous offer has been made and, obviously, there are so many different interests to balance. However, returning to the point I made at the start of this short exchange, there are, above all, huge areas of national security here. Will she ensure that, within a limited timescale, all the Government, in particular the Ministry of Defence, are involved in reaching the decisions that must be made?
Baroness Jones of Whitchurch (Lab)
First, the noble Lord is absolutely right that this is a very worrying time for British Steel’s workers and all those who are affected. First and foremost, we are thinking of them. The negotiations are live and continuing. We will continue to negotiate for as long as we can. There is certainly no deadline in our mind. We will continue to keep that pressure up. We want this matter to be resolved. We feel we have made a good offer and very much hope that those negotiations will be fruitful and that we can find a package with British Steel that is acceptable.