UK Steel Strategy
(1 day, 6 hours ago)
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The Secretary of State for Business and Trade (Peter Kyle)
With permission, I will make a statement on the Government’s steel strategy. I begin by declaring my membership of Community and GMB trade unions.
Resilient economic growth is the main driver of social justice, and steel is essential to both. Steel underpins the key growth-driving sectors in our modern industrial strategy. It has strengthened and sustained communities in England, Scotland and Wales. The future of steel in Britain is about ensuring the future strength and security of our national economy.
We honour steel’s proud industrial past, but we do not live in it. We are ambitious and excited for Britain’s future steel sector. Steel is essential for advanced manufacturing, clean energy, construction, defence and digital technologies. Steel is vital for sustaining thousands of lives and livelihoods, with good jobs, apprenticeships and opportunities. Steel is central to communities in Port Talbot, Motherwell, Scunthorpe, Sheffield and Teesside.
This House will be acutely aware that Britain’s steel sector has experienced decades of decline, from the failures of Thatcherism that closed Consett and Ravenscraig and shrank Corby to the damage done by the Tories to Redcar and Port Talbot. Steel manufacturing in Britain serves as the starkest possible monument to the failure of Thatcherite monetarism and its record of industrial vandalism. By contrast, Labour has an activist industrial strategy that determinedly targets key industries, technologies and strategically important sectors for economic development, national security and resilience.
In the last five decades, steel industry employment in Britain has declined by 90%, from more than 300,000 jobs in 1970 to less than 30,000 today. We are closing that decades-long chapter of deliberate de-industrialisation and committing anew to strengthening and sustaining Britain as a steelmaking nation. High operating costs and global overcapacity have made it much harder for British steel companies to compete. Manufacturers have looked to cheap, imported steel to keep costs down. As a result, investment have tapered off, capabilities have reduced and communities have been let down. Crude steel production has declined by more than 50% in the last decade.
Faced with these challenges, previous Governments failed to present a long-term vision for steel in Britain. They were reactive, not proactive. They intervened to support specific companies at specific times, but failed to improve the general conditions for the industry as a whole. They lacked the necessary boldness, creativity and urgency. This Government will not make that same mistake. Far from believing that steel decline is inevitable, we embrace a future for British steel manufacturing as a staple of sustainable, resilient economic growth and our national security. While the industry still faces challenges today, we will do everything we can to help it adapt, grow and succeed into the future, and our actions on steel will be driven by what is best for our national interest.
Our steel strategy sets out a series of actions to reverse the failures of the past: to build a strong and resilient steel sector, backed up with £2.5 billion of Government investment. That is on top of the £500 million that we have pledged for the steelworks at Port Talbot. Our ambition is for domestic production to meet up to half of Britain’s domestic demand. To support that effort, we will introduce a new trade measure to replace the existing safeguard. From 1 July, overall quotas for imported steel will be reduced by 60% compared with the safeguard. All steel coming into the UK above those levels will be subject to a 50% tariff. This measure will apply to imported steel products that can be made in the UK.
This is not a decision that I have taken lightly. I have done so to shield Britain’s steel industry from the damaging effects of global overcapacity, to ensure that Britain’s steel industry contributes fully to our critical national infrastructure and our defence, and to shore up the UK’s resilience to global shocks. Without this action, the UK’s steelmaking capability faces real jeopardy, leaving us reliant on overseas suppliers. I will not let that happen. Steel is essential for our energy security, our transport infrastructure and our industrial strategy, and in this volatile geopolitical climate in which we find ourselves, that kind of dependence is weakness. Britain’s national interest requires the strength of British-made steel. The tariff will be implemented once import quotas have been fully met. I believe that is essential for the resilience of sectors reliant on steel imports, including the car industry, construction and defence. We will review the measure in 12 months to make sure that it is working effectively.
Our approach reflects months of engagement between my Department, the Steel Council, businesses and trade unions. I thank the trade unions that have helped us, officials in my Department who have poured their heart and soul into this strategy, and my ministerial team for their contributions and leadership. We continue to engage constructively with the EU to protect vital UK-EU steel trade given our highly interconnected supply chains. Beyond the trade measure, we are backing electric arc furnaces to shift to greener, decarbonised steel production. As we see at Sheffield Forgemasters, electric arc furnaces have the technical capability that we need to produce steel to the very highest of standards for nuclear, for aerospace and for defence. This is important, as traditional blast furnaces will eventually reach the end of their operational lives. [Interruption.]
Madam Deputy Speaker (Judith Cummins)
Order. I want to hear what the Secretary of State has to say. I am also certain that constituents want to hear him. This is a very important statement.
Peter Kyle
It is okay, Madam Deputy Speaker. It is just that everyone is shocked to see the hon. Member for Boston and Skegness (Richard Tice) in his place.
Electric arc furnaces are important as traditional blast furnaces will eventually reach the end of their operational lives and a managed transition is vital to maintaining supply. That is why we took control of British Steel last year, and we are currently working with the owner on the long-term future of the site.
The UK has the opportunity to lead in clean, green steel, and we are going to seize it with both hands. That is why we are also changing the clean industry bonus, making it easier for British steel to be included in British wind farms.
Britain can recycle more steel. Making better use of scrap steel is fundamental to the sector’s future growth. Millions of tonnes are ready to be recycled. We are building the technology to do it right here in Britain. We are creating a more competitive business environment for steel, too. We are tackling the high cost of energy. Our supercharger is delivering millions of pounds in savings for steelmaking firms. These businesses will benefit even further next month thanks to the changes that we are making to the network charging compensation scheme, which will increase the rate of relief from 60% to 90%. We are taking further action to support foundational industries by addressing high electricity costs, with a view to boosting supply-chain resilience. Our British industrial competitiveness scheme could reduce bills for other businesses in the sector by providing a discount of up to £40 per megawatt hour, starting from April 2027.
Private sector investment is essential for the steel sector. It is vital for driving up capacity and capability. That is why, within 10 weeks of taking office, we negotiated a substantially better deal to support the transition to green steelmaking at Port Talbot. We are welcoming investment from new entrants to the UK market. The National Wealth Fund is there to support them.
We will continue to work hand in hand with devolved Governments and steelmaking hubs in Wales and Scotland to bring in that additional investment. This is the vision that our steel strategy sets out: Government, with boldness, certainty, and urgency; industry, with energy, enterprise and expertise; and communities, stronger, safer, and more secure. All will be working together to make our steel sector attractive to new investors, innovators, employees and apprentices. It will be financially stable, internationally competitive and proudly British. Together, the strategy and the new trade measures will help to build a stronger, more resilient steel industry. They will take the immediate action that our steel industry needs and provide a plan to help the steel sector prosper for the long term.
Building a brighter future for Britain’s steel has already begun. Today, UK Export Finance has signed a landmark financing deal with Nigeria, which is refurbishing two major ports. As part of that agreement, British Steel Limited will supply 120,000 tonnes of steel billets for this work. That is a £70 million contract, the largest British Steel order that UKEF has ever backed, strengthening and sustaining Britain’s future as a steelmaking nation.
We need steel made in Britain in all its forms. We need it for the 1.5 million new homes that we are committed to build, for the third runway that we have approved at Heathrow that will require 400,000 tonnes of steel, and for our new data centres and gigafactories, such as the Agratas gigafactory in Somerset. A total of 23,000 tonnes of steel has already gone into its construction, all sourced from the UK.
Britain needs a steel industry for our national security, economic security and national interest. We need to ensure that Britain remains an internationally competitive steelmaking nation not just because our past was built on steel, but because our future depends on it. I commend this statement to the House.
Dame Harriett Baldwin (West Worcestershire) (Con)
I thank the Secretary of State for advance sight of his statement. The Conservatives very much believe in a sovereign steel industry, but what we see today is a multibillion-pound shot in the dark, and it heralds the end of primary steel production in the UK. Just to set the record straight, there would no longer be any steel production in Wales without action from the last Government. This steel strategy has no plan to make the industry stand on its own two feet, and it risks a permanent state-funded drain on taxpayers.
British Steel was losing £700,000 a day when the Government took emergency action last year, and now the taxpayer is losing an estimated £1.3 million a day and there is a subsidy of £110,000 per job to keep the Scunthorpe blast furnace operational. This steel strategy does not include any exit strategy, risking a permanent drain on taxpayers, and now the Government are negotiating handing taxpayers’ money to a Chinese business that they said was worth nothing, while hitting British users of steel with a 50% tariff hike. Given that the previous Secretary of State said that British Steel had zero value, will the current Secretary of State confirm whether compensation will be paid to Jingye?
How are these new tariffs going to affect the cost of living for our constituents? How much will the tariffs raise? They represent a massive tax hike on our world-leading automotive, defence and aerospace sectors, which will make building homes, bridges and railways more expensive. Have the Government carried out any impact assessment on the tariffs, and will jobs not be lost in those other sectors?
The Government say in the strategy that electric arc furnaces are the future, but without competitive energy, green steel will simply become no steel. If electric arc furnaces are the future, when will the blast furnaces at Scunthorpe be decommissioned, and how many jobs will be lost in that process? Where will the £2.5 billion go? Is it all going into the Scunthorpe blast furnaces? How is this £2.5 billion spending spree fiscally responsible? What is the Secretary of State cutting to pay for it?
The so-called National Wealth Fund is rapidly become the national slush fund. The shadow Secretary of State for Energy Security and Net Zero, my right hon. Friend the Member for East Surrey (Claire Coutinho), has announced our cheap power plan, which will slash energy bills for businesses and households. The Conservatives will axe the carbon tax, scrap extortionate subsidies for wind and solar, repeal the Climate Change Act 2008, and end the ban on new oil and gas licences to maximise domestic extraction and reduce dependence on foreign energy imports. Could the Secretary of State please copy this approach?
This is a Government who are subsidising decline and reaching for protectionist tariffs. After the botched nationalisation of Scunthorpe and the surrender of the Chagos islands, we can see from this steel strategy that when Labour negotiates, the British taxpayer loses.
Peter Kyle
I am glad to see the hon. Lady at the Dispatch Box. It is always an honour to have exchanges with her, as it has been for quite some time.
The hon. Lady mentions Wales, but she seems to have no idea about the breadth and depth of the steel industry across Wales. She seems to think that there is only one steel maker, manufacturer and operator in Wales. There is not. She seems to be forgetting all about 7 Steel in Cardiff. That explains why the Conservatives in government failed to have a strategy and vision for steel and to support the sector because they did not even know who was making steel and where. This Government understand all our steel assets, and we are creating a strategy to make sure that all of them add up to more than the sum of their parts and that we have a domestic industry that is sustainable, secure and growing into the future.
The hon. Lady seems to want to exit from British Steel without any more investment whatsoever. That would be the worst of all worlds. She wants to strand an entire community. We will stand by that community and make sure that the steel industry and sector thrives into the future.
On tariffs, let me just explain to the party that used to be about free and fair trade that free trade depends on fair trade. Fair trade depends on not having overcapacity. We cannot have overcapacity and fair trade. Therefore, we must correct the market and offer protection where overcapacity is in danger of decimating one of our key industries for defence, security and future prosperity.
The worst thing that could be done for the British steel industry is to do nothing. All we have heard from the Conservatives is, “Don’t do any of the things that Labour is doing,” with no alternatives offered whatsoever. They are the “do nothing” party, and that is the worst of all worlds.
Matt Western (Warwick and Leamington) (Lab)
I thank my right hon. Friend for his statement. As he says, steel is national security and economic security. Can I just say, it is terrific at long last to hear a Government showing some mettle? [Hon. Members: “Oh.”]
The array of measures in the strategy is impressive, from tariffs to procurement and scrap, but there are some concerns among our precious automotive sector. Could my right hon. Friend outline some detail about how this will relate to EU measures and how it will support UK manufacturers facing “made in Europe” tariffs?
Peter Kyle
My hon. Friend is right to explain that this strategy is a holistic strategy. It looks at the industry as a whole and considers how all the assets can be brought together and given a sustainable footing. I will invest, modernise and protect where necessary.
On the questions about the EU, I have, of course, been in discussion with my EU counterparts. I met four EU commissioners in the last month and the vice-president. Next week we will have further discussions when we are in Cameroon for the ministerial meetings of the World Trade Organisation. These are important times for both the European Union and the UK. Our reset is important, and that reset work will continue. It is in both our interests to make sure that we invest in, protect and modernise our respective steel industries, and we should be doing so with as much co-operation as possible.
David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)
In 2024, Labour MPs across south Wales stood on a pledge to “save our steel”. They promised £2.5 billion for the steel industry, and they said that they had a plan. They began by saying that they would publish the steel strategy in spring 2025. Then it was autumn 2025, and now finally it arrives in spring 2026. We still do not know how much of that money will be spent in Wales. Will the Secretary of State confirm that to the House today?
In the meantime, British steel production has continued falling, and thousands of jobs have been lost across south Wales since the blast furnaces were turned off. I am not really sure that Labour understands the damage that its party’s failures are having across south Wales. Wales feels abandoned. Steel is in our blood. It is the backbone of our economy. But we are still losing jobs. Skilled workers such as welders are leaving, and tarmac companies are struggling to make asphalt. Consumer spending is falling. People in south Wales are fed up with broken promises. South Wales was promised that the electric arc furnace would be up and running by 2027, but we are now told that it will be 2028. Can the Secretary of State update the House on that deadline?
We need to see so much more urgency. Wales is desperate for the good jobs that the steel industry can provide. There is still—just about, if the Government move quickly—the opportunity to build a home-grown supply chain for the floating offshore wind sector. The Government have told me that they are not expecting to have that sector going until the mid-2030s. That is far too slow. That lackadaisical approach means that the energy that should be created through offshore wind will not be added to the grid until the mid-2030s. The Government must hurry up and deliver on their promises to south Wales.
Peter Kyle
The hon. Gentleman mentioned waiting for the steel strategy. The truth is that the steel sector has been waiting 80 years for a steel strategy, and this is the first time that one has been delivered. I think that showing a little bit of gratitude for what has been delivered today, on behalf of the sectors and businesses that he talked about, would be most welcome. I also point out that the 80 years over which there was no strategy included 2010 to 2015, when his party was in government.
Yesterday I was at Tata in Wales. The management, the ownership, the workers and the unions universally welcome this strategy and the £500 million that has already been put in to help transform the industry. That is the example of how we will move forward—with boldness, creativity and urgency.
Jessica Morden (Newport East) (Lab)
This is indeed a welcome and bold steel strategy, and it stands in direct contrast with what happened under the Conservative party, which never had one. I thank all the Ministers involved, the industry and the unions. I declare an interest as a member of Community and GMB. As I am sure Minister will agree, this is a good start, but we should always aspire to be as ambitious as possible for our UK steel industry, our security and our infrastructure, as well as for the dedicated young workforce at Llanwern steelworks and 7 Steel UK. Will the Secretary of State work with industry to incentivise investments in projects that we do not currently make, so that we can reduce even further our reliance on imported steel?
Peter Kyle
I thank my hon. Friend for her thoughtful contribution, which is based on experience. Llanwern has a fierce advocate in my hon. Friend. I hope that she recognises that her campaigning over many years is reflected in the strategy. I can reassure her that this strategy is not the end; it is just the beginning. The investment, transformation and modernisation programme is only just starting.
Martin Vickers (Brigg and Immingham) (Con)
Hundreds of my constituents work at the Scunthorpe steelworks, and hundreds more are reliant on the supply chain. They want certainty about their future. Will the Secretary of State give a clear indication of how long he anticipates the existing blast furnaces will be in operation? If the Government’s intention is to build arc furnaces, will they be established in Scunthorpe?
Peter Kyle
I am grateful to the hon. Gentleman for his thoughtful intervention. He has campaigned on this issue for a long time. I can reassure him that conversations with the owner are ongoing, and that the £2.5 billion that the Government have committed is for the transformation of the sector for a sustainable future. There will be more domestic demand, we will benefit from efficiencies and economies of scale, and we can start to rebuild and re-industrialise the steel sector. That benefits his community and other steel communities up and down the country.
Pamela Nash (Motherwell, Wishaw and Carluke) (Lab)
I declare an interest as a very proud member of Community. I warmly welcome the announcement of this much-needed steel strategy, which promises to deliver across Britain. Dalzell plate mill is physically and emotionally at the heart of Motherwell, and it is the only steelworks operating in Scotland. Can the Secretary of State confirm for my constituents that our plate mill will remain central to the British steel strategy, and will be supported to thrive again?
Peter Kyle
I thank my hon. Friend for her campaigning and advocacy. I hope that she recognises it in the strategy that we have announced. Dalzell is central to our defence industry up and down the country, and to the community of Motherwell. I can assure her that it is front and centre of my thinking, as we look to the future in those key sectors.
Sir Edward Leigh (Gainsborough) (Con)
I suspect that the problems of Scunthorpe, where many of my constituents work, are less to do with the anti-protectionist policies of Mrs Thatcher—given that she left office 36 years ago—and more to do with the fact that Scunthorpe is paying the highest energy costs of any steelworks in Europe. That is very important. Will the Secretary of State answer the question of my constituency neighbour, my hon. Friend the Member for Brigg and Immingham (Martin Vickers), and of all our constituents who work at Scunthorpe? Blast furnaces only have six or seven years of life, but we need them to make virgin steel, particularly in the defence industries. Is this the end of our ability to make virgin steel? Given that it takes two or three years to create an arc furnace, will the Secretary of State commit to one at Scunthorpe?
Peter Kyle
The right hon. Gentleman mentions Thatcher. I lost my father not so long ago, and have been going through his belongings. I found a letter that my father wrote to Mrs Thatcher when she was the Leader of Opposition in the ’70s. The reply, which came from a private secretary on behalf of the Leader of the Opposition, was signed by one Edward Leigh. I understand his insight into that particular moment in our country’s history, and I am grateful to have this exchange with him over the Dispatch Box. I wish my father was here to see it.
On Scunthorpe and other steel communities, I hope that the right hon. Gentleman has the time to read the strategy. When he has done so, I will make time to sit with him and work through it. He will see that it contains the intent to create sustainable steel production. Our belief and intention is that we will have the domestic capability to produce all grades of steel needed by our economy, in an economically and financially sustainable way. Those are the things that workers in the steel sector, in Scunthorpe and right around the country, need the most.
Mr Clive Betts (Sheffield South East) (Lab)
I welcome the strategy. Sheffield’s history is inextricably linked to steel, and we want our future to be linked to steel as well. My right hon. Friend mentioned the excellent work that Forgemasters is doing to provide steel for our nuclear reactors, our nuclear submarines and, hopefully, our civil nuclear program, through small modular reactors. The strategy mentions the procurement of British steel. Will the Secretary of State set out how the Government will ensure that public bodies do procure British steel rather than just saying that they will?
My hon. Friend the Member for Penistone and Stocksbridge (Dr Tidball) has fought so hard for the future of Liberty in the past few months. What would the Secretary of State say to her about Stocksbridge steelworks? Will this deal ensure that the steelworks has a viable future and that jobs are retained for the whole of Sheffield?
Peter Kyle
I thank my hon. Friend for his tireless campaigning on these issues over many years. Forgemasters is, of course, important to our defence sector. His constituency also has the capacity to make stainless steel. He gives great voice to those two assets in his community. I hope that he sees much of his campaigning reflected in the strategy, which will give a sustainable long-term future to the industries that he represents and speaks for in the House.
Chris Law (Dundee Central) (SNP)
The Secretary of State has made great efforts to make the point that investing in steel production is crucial to the strength of the economy and to our national security, which is true. It is also true that Brexit has been disastrous for our steel industries, as he is aware. It is stark that the UK Government are willing to invest in those critical industries in England and Wales, but have continually failed to do so in Scotland. Despite their election promises to save Grangemouth, it was allowed to close; Mossmorran slammed shut its doors; and Labour’s damaging energy policies have cost 1,000 jobs per month. Will he apologise to the people in the east and north-east of Scotland who feel utterly betrayed and abandoned by the UK Labour Government?
Peter Kyle
As I have mentioned, we have been supporting the Dalzell plant. I also refer the hon. Gentleman to the fact that we have a National Wealth Fund for the entire United Kingdom. Many billions of pounds will now be unleashed to renew our country, including Scotland, which would be bereft of that funding should it be taken out of the United Kingdom and denied access to it.
Euan Stainbank (Falkirk) (Lab)
I welcome the Government’s steel strategy. The welcome ambition for the steel sector will be shared by industrial communities across the country, especially in Motherwell. Industrial communities such as those in Falkirk and the Forth valley must see similar ambition. Today is the one-year anniversary of the publication of Project Willow, so will the Secretary of State commit from the Dispatch Box to redoubling his Department’s engagement with prospective investors in Grangemouth, trade unions, the Grangemouth future industry board and local Members, so that the jobs and industry that the project promised our community materialise at pace over the coming years?
Peter Kyle
My hon. Friend speaks to many different sectors and industries, all of which we have stepped in to support since coming into office. We are investing in their modernisation and putting them on a sustainable footing for the future. He asks me to redouble my efforts—I have redoubled my efforts every day in this job. He will see from how my Department and I acted when Jaguar Land Rover had its hour of need and when Grangemouth needed support and investment, and from today’s steel strategy, which I announced on a visit to Port Talbot just yesterday, that this is a Government who seek to modernise and to protect where necessary, but always to invest in the future.
Harriet Cross (Gordon and Buchan) (Con)
What assessment, if any, has the Department made of the impact that moving from blast furnaces to arc furnaces will have on our virgin steel capabilities? The Minister for Trade, who did the morning round, seemed to accept that it would mean our virgin steel capabilities being undermined.
Peter Kyle
I can reassure the hon. Lady that all grades of steel that are needed by the British economy will be available post transition.
Bill Esterson (Sefton Central) (Lab)
It really is in the national interest to secure the future of the steel industry in this country. It is extraordinary to hear the opposition to the plan from the Opposition Benches, but perhaps not surprising, given that the shadow Secretary of State, the hon. Member for Arundel and South Downs (Andrew Griffith), was the adviser to the previous Government when they sold the British steelworks at Scunthorpe to Jingye, with all the disastrous consequences. On the subject of energy for Scunthorpe, can the Secretary of State say what is being done to bring forward the date for the electricity connection to the site, which I know has been a significant challenge over many years?
Peter Kyle
My hon. Friend will know full well that when it comes to energy, we have announced the supercharger programme. Compensation is now being increased from 60% to 90%, offering relief and injecting competitiveness into the sector at the same time as offering protection. If we had done one without the other, we would, of course, just be pouring money down the drain. I can assure him that we are working with the National Grid and colleagues in the Department for Energy Security and Net Zero to make sure that we get the energy supply needed for the conversion to electric arc furnaces as quickly as possible.
Greg Smith (Mid Buckinghamshire) (Con)
Now that the Government have some experience of running a business with British Steel, what assessment has the Secretary of State made of the £37 million cost of the Employment Rights Act 2025 and the national insurance jobs tax increases on the viability of our steel industry?
Peter Kyle
I am grateful to the hon. Gentleman for giving himself the opportunity to score an own goal. When we came into office, we inherited a broken economy that was not delivering for working people. Our international relationships were on their knees, public services were stretched to breaking point and our economy simply was not generating income because of the circumstances that we inherited. We have acted to update workers’ rights for the moment we are living in, while getting a grip on the public finances that the previous Government left in utter chaos. Those are the fundamentals that we need moving forward to deal with all the global challenges that will come our way. If we had not got the finances on a stable footing, we would be in a much worse state now that we are facing the challenges that have come our way in recent times.
Dame Nia Griffith (Llanelli) (Lab)
I very much welcome the Government’s commitment to supporting our Welsh steel industry and to using much more steel made in the UK, but Llanelli’s Trostre works needs high-quality steel to make the steel packaging products it produces. That steel used to come from Port Talbot’s blast furnaces. Can the Minister tell us more about what he is doing to secure supplies of appropriate scrap metal for the electric arc furnace, and to stimulate research to ensure that the electric arc furnace can produce steel of the quality that Trostre needs?
Peter Kyle
My hon. Friend has been speaking about this issue for a long time. In the run-up to the transition period for electric arc furnaces, I assure her that we have a scrap working group, which is working to identify the sources of scrap metal that will be required. Just yesterday in Port Talbot, I was talking with the management, the workers and the unions, and I saw the infrastructure being built to get scrap from across the United Kingdom to where it needs to be on an enormous scale.
Richard Tice (Boston and Skegness) (Reform)
Well, at least this Government have a steel strategy, unlike the previous Administration. Credit where credit is due: they are right to impose tariffs and quotas. But that is as far as it goes, because otherwise it is visionless and hamstrung by net stupid zero. We have the absurd situation in which the public sector is buying tens of thousands of tonnes of steel from China, rather than from Scunthorpe and British Steel. This is a complete betrayal of thousands of workers in Scunthorpe. There is no vision. Will the Secretary of State confirm when the blast furnaces will be closed at Scunthorpe—Reform would renew and replace them—and will he guarantee that when the electric arc furnace in Port Talbot is built, it will definitely open for business?
Peter Kyle
I have not yet had the opportunity to welcome the self-appointed shadow shadow—or, as I say, shadowy—Secretary of State to his position. Despite the investment and the protections we are putting in, and despite the modernisations, which he recognises are all good, his point seems to be that it is not quite visionary enough. However, he is not able to point to a vision for a more comprehensive future for the steel industry. He also seems to think that electric arc furnaces are woke. Let me say that there is nothing woke about an electric arc furnace, which, when rolled out in the transition, will make us a market leader globally, which is what the industry itself—the British domestic suppliers and those who are demanding that steel is required into the future—is calling for. I can assure him that we are on the side of the industry and its vision. We are matching its ambition and its potential for the future. He wants to cast us back into the past.
Nick Smith (Blaenau Gwent and Rhymney) (Lab)
May I say how proud I am that my birth certificate says, “Father’s occupation: labourer in the steelworks”? This strategy is a shot in the arm for steelmakers across the UK; it is in stark contrast to the failures of the last Tory Governments. But can the Secretary of State say more about the infrastructure projects and plans to refine the public procurement notice for steel? What will that mean in practice for jobs in our communities?
Peter Kyle
In the many years I have observed my hon. Friend contributing to these debates, he has always been thoughtful and powerfully on the side of the steel sector. I can reassure him that the Government are investing in infrastructure on an unprecedented peacetime scale. The new runways and the 1.5 million homes that will be built as a result of this Government, and the building out between Oxford and Cambridge, to name a few, will all require enormous amounts of steel. This Government’s policy is to increase the supply of domestic steel from 30% to 50% of the requirement. We will use all the powers we have in policy and incentives to ensure that British steel producers benefit from all these opportunities.
Ben Lake (Ceredigion Preseli) (PC)
I welcome today’s statement on the introduction of a strategy for such a critical industry, and particularly commend the Government for the emphasis they place on the importance of steel sites across Wales. With that in mind, can the Secretary of State offer greater detail on the types of investment he envisages in the strategy to go into sites in Wales, and the rough timescale over which we can expect to receive it?
Peter Kyle
The hon. Member will notice from the steel strategy, which sits alongside the industrial strategy, that place-based investment is incredibly important to this Government. Yesterday, I was in Port Talbot with the First Minister for Wales. When two Governments are aligned in trying to get investment into parts of the country—when two Labour Governments work hand in hand—they deliver for the people of Wales and for people across the United Kingdom.
Mr Alex Barros-Curtis (Cardiff West) (Lab)
I refer proudly to my membership of GMB and Unite. I welcome this brilliant announcement and especially the backing of Welsh steel, because Welsh steelmaking is expected to account for half of all future UK steelmaking. As the Secretary of State mentioned, I was proud to recently visit with my Front-Bench colleagues 7 Steel in Cardiff, where we already have an electric arc furnace. Does the Secretary of State agree that the steel strategy from this Labour Government marks a welcome departure after the years of failure to have a strategy by Conservative Governments—and, let us not forget, the coalition Government—who repeatedly left this vital industry on the brink of collapse?
Peter Kyle
My hon. Friend’s analysis is absolutely correct, and he has been a tireless advocate ever since he joined this place. It is correct to say that we have invested and are investing in steel in Wales, but we are also investing in modernising the economy and infrastructure of Wales. The creation of two AI growth zones sits alongside the work we are doing on steel and other areas of infrastructure in Wales. Again, it demonstrates two Labour Governments working together for the benefit of the people of Wales. It works, and he is part of that, for which I am grateful.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. What a contrast there is between the Government of just over a decade ago, who ripped the heart out of my region, and this Government, who finally have a strategy after many decades. I welcome it, but what is more, so does the industry—I spoke to those in the industry this week, and they strongly welcome the measures, particularly on procurement and trade. This is a Government on the side of British steelworkers.
One of the biggest issues affecting the industry is, of course, energy. I hear what the Secretary of State says about the supercharger, but even with that, there will still be an energy price gap with many of our competitors. What more can we do to ensure that we reduce these gaps for our industry and protect jobs years into the future?
Peter Kyle
The workers at Skinningrove have a true advocate in this place in my hon. Friend. I can reassure him that the work we have done on the supercharger will make a tangible difference to the workers and the sustainability of that plant. I can also reassure him that this is a Government who act when we have to. We are in constant touch with the steel industry. We are on its side. We are working with it to create a sustainable industry into the future.