Steel Tariffs

Debate between Andrew Griffith and Chris McDonald

Wednesday 17th June 2026 Commons Chamber

[Andrew Griffith (Arundel and South Downs) (Con)]

(Urgent Question): To ask the Secretary of State for Business and Trade if he will make a statement on steel tariffs.

[The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)]

May I start by giving the apologies of the Minister for Trade, who is in Turkey, negotiating further trade deals for British industry?

On 19 March, the Government set out the UK’s plan to introduce a robust new trade measure from 1 July. It will limit tariff-free steel imports, as compared with the steel safeguard measure. Any imports above the levels in the measure will face a 50% tariff.

Protecting primary steel production is crucial to the UK’s critical national infrastructure and defence. That is why we have published a long-term plan for steel and are introducing a new trade measure countering the unprecedented and damaging effect of global overcapacity. It is simply wrong that only 30% of the steel that we need in the UK is made in the UK.

Steel is essential for advanced manufacturing and engineering, and the interests of the domestic steel sector and downstream industry are best served together. A thriving steel industry strengthens supply chain resilience for downstream businesses and limits their exposure to global supply shocks. We need to balance the need to protect domestic steelmaking with maintaining secure, reliable supply chains for downstream businesses.

Imports will remain important. The Government have engaged extensively with businesses across a range of sectors, including manufacturing, when developing this measure. Indeed, last week, I held a roundtable with downstream industry, together with my hon. Friend the Minister for Trade. We, and the Secretary of State, also heard from several colleagues about the concerns of businesses in their constituencies. We are listening carefully to companies throughout the supply chain as we finalise the measure.

We have introduced a transitional arrangement; the new measure will not apply to goods under contract before 14 March 2026 and imported between 1 July and 30 September 2026. We have introduced a carry-over mechanism to give importers more flexibility. We will review the measure after 12 months to ensure that it remains fit for purpose.

We are also engaging intensively with the European Commission on our respective steel measures, and are working to find a bilateral solution that protects vital UK-EU steel trade. This engagement reflects the unique structure of our trading and security relationships and the interconnectedness of our supply chains, but we need to be clear: if we do not act, we will not have steel-making in the UK. The US, Canada, the EU are all acting; we must too.

[Andrew Griffith]

I thank the Minister for that statement.

Aerospace, the automotive sector, Formula 1, the construction sector, and manufacturing businesses that use steel, which employ 300,000 people, are all being impacted by Labour’s botched tariffs. Many specialist steels—the Minister may have heard this from manufacturing businesses—are not, as it stands, even produced in the UK. That is a real issue when it comes to, for example, categories 14 and 27, which are used in aircraft wings, or in defence applications that we need to make ourselves safe. Where defence companies have cost-plus contracts, the tariff on steel that is not made here will just get added to the bill for the Ministry of Defence.

Will the Minister listen to Stephen Morley, president of the Confederation of British Metalforming, who says:

“The UK risks accelerating the decline of its manufacturing base rather than preserving it”,

or Simon Boyd from REIDsteel, a British steelmaker, when he says that these measures will kill off

“downstream customers of steelmakers in the UK”?

I am sure that is not the Minister’s intention, but with just two weeks to go, with respect, it is time to stop listening and start acting.

Will the Minister answer three questions? First, will he confirm today that the measures will not be applied retroactively throughout the whole life of existing, agreed contracts? Secondly, will he exempt steel—especially in categories 14 and 27—that is simply not made here in the necessary volumes? Thirdly, after listening to industry, will the Government please delay these tariffs for at least six months so that they can get this right?

[Chris McDonald]

In line with your guidance about constructive debate, Mr Speaker, I am sure we will have some constructive debate now. The shadow Minister has raised some legitimate questions, and I am very happy to provide the answers.

I think we all recognise the importance of the steel industry and the downstream sector—there is definitely a point of agreement there. The point about timing is a critical one, and on the face of it, the request for a delay is not unreasonable. The important thing to recognise is that our steel safeguard measure expires on 30 July. It is not possible for us to extend that measure; it has lasted for eight years, and under World Trade Organisation rules we cannot extend it, so new measures are required. Of course, the EU is introducing a new measure on 1 July, and the US and Canada have also introduced new measures. If we were not to introduce a measure, the UK would become the global dumping ground for subsidised steel. That would be the end of our primary steel industry, so something needs to be done.

In designing the measures, we have been very careful to ensure that they are targeted at those steels that are made, or could be made, in the UK. However, the categories are quite broad, and we acknowledge that some steels that are not, and could not be, made in the UK could be swept up in them. That is the point of the quotas. Since our draft measures were published, we have consulted extensively with industry—I have known Steve Morley for a very long time, and I listen very carefully to what he says, but more than that, we have carried out extensive consultation. The Minister for Trade and I have met the downstream group on three occasions, and I have met the Aerospace Growth Partnership, the Construction Leadership Council and many other businesses. We will be publishing our final measures in line with our EU negotiations when they are completed, in time for 1 July.

Steel Industry (Nationalisation) Bill

Debate between Andrew Griffith and Chris McDonald

2nd reading
Thursday 21st May 2026 Commons Chamber

[The Parliamentary Under-Secretary of State for Business and Trade (Chris McDonald)]

As I was preparing for today’s debate, it struck me that 60 years ago this summer, this House was debating steel nationalisation and the England team went on to win the world cup. We are back here discussing steel nationalisation again, so I have high hopes for the summer.

Sometimes it is informative to learn from the past. Going back to the steel nationalisation of 1966, the Minister of Power opened the debate and said that

“there is no manufacturing industry of such basic importance to the British economy.”—[Official Report, 25 July 1966; Vol. 732, c. 1224.]

Of course, he was right then, and it is true now. However, the steel industry is so good that we have not nationalised it twice; we have nationalised it thrice, because the steel industry was also partly nationalised in 1948. The Minister of Supply said:

“Without steel the life of Britain would collapse.”—[Official Report, 15 November 1948; Vol. 458, c. 53.]

That is absolutely true, as we have heard from Members of the House today.

As the Minister for Industry, part of my mission is to increase the productive capacity of our industry. What we have seen in the steel industry, particularly during 14 years of the Tories, is productive decline. They presided over the loss of great steel plants and a reduction in the productive capacity of those steel plants. The thing is, the decline in market share—from 80% to 30%—was not inevitable. It was a choice born out of inaction and out of a lack of industrial policy.

The reason that this Bill is so important is exactly the same as the reason it was important in 1966: there has been a great technological shift in the industry. Back then, it was continuous casting; now, it is electric arc furnaces. The industry has been de-capitalised by years of under-investment, and it needs to be re-capitalised. Productivity fell off a cliff under the previous Government. It fell repeatedly following the closure of the Redcar blast furnace, and productivity must be improved. These are not the words of someone who is wedded to a socialist principle of nationalisation. They are the words of someone who has spent his life in the steel industry, who ran a business in the steel industry, and who is dedicated to improving productivity in our industry.

I heard the words of the shadow Minister, the hon. Member for Arundel and South Downs (Andrew Griffith), when he opened the debate, and I was quite disappointed. He and I met earlier this week, and my colleagues sitting behind me might be surprised to learn that he was thoughtful and probing in the questions that he asked me. He made some really interesting points, and we had a good discussion. I thought about his points afterwards, and I found it really interesting that he had thought about the things that we will have to bear in mind when we pass this legislation. But what has he done? He has fallen into the Conservatives’ usual trap of presenting this as an ideological debate, instead of a debate about the function of an industry that is vital to this country. That is how they have prosecuted this debate.

I learned something when I was working in the industry. Two years ago, I was running a business in the steel industry. Twenty years ago, I was working at the Scunthorpe steelworks. More than 30 years ago—the House will not believe it—I left school and got a job in the steel industry. There were a lot of changes over that time. Sometimes I stayed in the same job, but the company and the badge on my hard hat changed. When it changed from British Steel to Corus, that was a big blow to how people felt about it, but I will tell the House one thing that I recognised: ownership matters, and it makes a difference. Strategy matters, and it matters where the head office of a business is. People care about the area where they work, and those things are important. The workers care, communities care and we care, but the Conservatives do not care—that is quite clear to me.

[Andrew Griffith]

I will be very brief. I thank the Minister for his remarks. One ideological difference he has not mentioned once is the huge gulf between those on our side and his party on energy, and the Government are not going to have a sustainable steel industry due to energy.

[Chris McDonald]

Yes, the hon. Member is right. There is a gulf there: the Conservatives were in favour of some of the highest industrial energy prices in the world. We have delivered an increase in the supercharger benefit from 60% to 90% and introduced the British industrial competitiveness scheme. Through our investments in chemicals, ceramics and, of course, steel, we are supporting British industry with its operating costs on energy and its capital costs to improve its productivity as well.

In steel communities, they are proud people. They are people who can stand on their own two feet, and they want to; they do not want subsidies. They have pride and they have dignity in their work, and when I went to the Corby steelworks recently, I saw the sacrifice of individuals and communities with their hard and dangerous labour.