British Steel

Chris McDonald Excerpts

Tuesday 14th October 2025 Written Statements

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

The Government committed to updating Parliament on British Steel every four sitting weeks for the duration of the period of special measures being applied under the Steel Industry (Special Measures) Act 2025.

The Government’s priority remains to maintain the safe operation of the blast furnaces at British Steel. To that end, Government officials are continuing to provide on-site support to continue steel production, ensure that health and safety issues are being remedied, stabilise operations and improve the steady state of the business.

Work continues to develop an impact assessment, which will be published in due course following Regulatory Policy Committee scrutiny. We are also continuing work on regulations under section 7 of the Act, to introduce a compensation scheme for steel undertakings that have received a notice under the Act.

On funding, the position remains that all Government funding for British Steel will be drawn from existing budgets, within the spending envelope set out at spring statement 2025. To date, we have provided approximately £235 million for working capital, covering items such as raw materials, salaries, and addressing unpaid bills, including for SMEs in the supply chain. This will be reflected in the Department for Business and Trade’s accounts for 2025-26.

As we have stated previously, our long-term aspiration for British Steel will require co-investment with the private sector to enable modernisation and decarbonisation, support jobs, safeguard taxpayers’ money and retain steelmaking in Scunthorpe. However, this will not be without challenges. Jingye acquired a troubled business in 2020 and it has faced challenging market conditions and circumstances in the years since. The company has not been able to overcome these difficulties and achieve profitability at British Steel. But this Government remain committed to restoring the long-term viability of steelmaking at Scunthorpe, and the UK steel sector as a whole, and we continue to see tangible benefits resulting from the wide-ranging actions we have taken, such as tackling high electricity prices via the uplift to the British industry supercharger and changing Government procurement rules.

International trade

Last month, the United States confirmed that the UK will not face an increase in metals tariffs to 50% and will remain the only country in the world to benefit from a preferential 25% rate on steel, aluminium and derivative exports to the US. This provides the certainty that UK industry has long been calling for. The UK is uniquely positioned as the only country to have secured this commitment, giving our companies a 25% competitive advantage over global competitors. It further strengthens the UK’s reputation as a trusted supplier of high-quality steel and aluminium. We continue to work closely with our US counterparts to reduce tariffs further and secure the best possible outcomes for UK manufacturers.

On 10 October, the Parliamentary Under-Secretary of State, Minister for Digital Economy (Liz Lloyd CBE), joined Ministers from partner countries at the Global Forum on Steel Excess Capacity ministerial in Gqeberha, South Africa. At the meeting, Ministers agreed to develop a comprehensive framework for joint action to address global steel excess capacity by June 2026.

On 7 October, the EU announced a new steel trade measure, which will replace its existing steel safeguard, which includes significantly reduced quota sizes and a higher out of tariff rate replacing its current safeguard. This decision is not targeted at the UK but will be highly concerning for many of our steel producers and their workers.

We will always defend our critical steel industry and have already engaged the EU at ministerial and official level to understand the details of this proposal. It is vital that we protect trade flows between the UK and EU, and we hope there is a way to work with our closest allies to address global challenges rather than adding to our industries’ woes. We reserve the right to take any action in response to any changes to our trading relationships.

In addition, we will ensure we have robust protections in place for our sector. We amended the steel safeguard to make it more effective in June and we continue to explore stronger trade measures to protect UK steel producers.

Steel procurement

We have now published the steel pipeline of UK public infrastructure projects taking place over the next few years and have announced targeted action to provide relief on electricity network charges via the British industry supercharger. We remain committed to publishing the steel strategy, which will articulate what is needed to create a competitive business environment in the UK with the aim of attracting new private investment to secure and expand UK steelmaking capability.

Liberty Steel

As Members will be aware, Liberty Speciality Steel UK entered compulsory liquidation on 21 August. On 2 September, my predecessor, my hon. Friend the Member for Croydon West (Sarah Jones), delivered an oral statement to the House, providing reassurance that there would be no immediate changes to the company’s operations or the status of employees’ jobs.

I recognise that this continues to be an unsettling time for the SSUK staff, their families and the local community. Responsibility for the day-to-day management of the process, including ensuring employees continue to be paid, now lies with the independent official receiver and the appointed special managers. Following the official receiver’s recommendation, the Government have agreed to initiate a sales process. This offers the potential to safeguard jobs and preserve steelmaking capability. To facilitate this, the Government have provided funding to the official receiver to enable him to carry out his duties effectively.

The Government are committed to securing a positive outcome for the SSUK sites, one that delivers a sustainable, commercially viable future for steel production. More broadly, we remain committed to supporting a sustainable and prosperous future for the whole of the UK steel industry. We are taking decisive steps to revitalise the sector after years of neglect, working to secure good jobs in Scunthorpe and other proud steelmaking communities for the long term.

[HCWS957]

Other Corrections

Chris McDonald Excerpts

Tuesday 16th September 2025 Written Corrections

[Chris McDonald]

Hospitality Sector

The following extract is from the debate on the Hospitality Sector on 3 September 2025.

[Chris McDonald]

My hon. Friend is doing an amazing job of talking about the importance of small hospitality businesses to the local community. Does he agree that that extends beyond economic value to their value more generally? The Golden Smog, a friendly family pub in my constituency, supports an inclusive basketball team and has raised £700,000 from its annual “pALEgrimage”—it is like a pilgrimage but involves ale, so it is even better. Will he join me in congratulating that pub?

[Official Report, 3 September 2025; Vol. 772, c. 370.]

Written correction submitted by the hon. Member for Stockton North (Chris McDonald):

[Chris McDonald]

My hon. Friend is doing an amazing job of talking about the importance of small hospitality businesses to the local community. Does he agree that that extends beyond economic value to their value more generally? The Golden Smog, a friendly family pub in my constituency, supports an inclusive basketball team and has raised £170,000 from its annual “pALEgrimage”—it is like a pilgrimage but involves ale, so it is even better. Will he join me in congratulating that pub?

Speciality Steel UK: Insolvency

Chris McDonald Excerpts

Tuesday 2nd September 2025 Commons Chamber

[Sarah Jones]

Navantia, which is building three ships, has recently entered into a contract to use Liberty’s steel; that relates to the Dalzell plant in Scotland, so it is unaffected by the announcements we have made today. Of course, I work very closely with my colleagues in the Ministry of Defence to ensure that we use British Steel where we can, and that we have the right infrastructure across the country, producing the right types of steel. We produce some types of steel for defence and not others, and some types of steel for shipping and not others. We need to do everything we can to protect British jobs and produce what we can here in the UK.

[Chris McDonald (Stockton North) (Lab)]

It would have enhanced the shadow Minister’s response if he had at least acknowledged that this Government are literally picking up the pieces after the chaotic dismemberment of the steel industry on the Conservative party’s watch. I have worked at Stocksbridge and Rotherham, and I pay tribute to the workforce there—but also to the dedicated steel team in the Department, who I know will have been working long hours in supporting the Minister on this.

The Government now own, control or fund three of the UK’s six steel companies. While a full merger of British Steel and Speciality Steel is one option, at the very least a review of all the assets under the Government’s purview would be a good idea, to see whether we can create more sustainable, investable businesses and reintegrate some of the internal supply chains. Would the Minister consider that?

[Sarah Jones]

I thank my hon. Friend for his words, and particularly his thanks to officials in the Department, who are brilliant; I work with them very closely, and they have not had many weekends throughout the whole steel process undertaken by this Government. His expertise is very much welcomed. We will continue to speak about this, as we did yesterday, and to use his expertise. Of course, we need to look at the whole situation. He is right that the Government are now involved in a number of steel companies, although we do not have ownership of any of them, and it is a different kind of involvement in different parts of the country. We are reviewing all that, and we want to see what the best mix is; we will continue to take his advice on that.

Parental Leave Review

Chris McDonald Excerpts

Tuesday 1st July 2025 Commons Chamber

[Justin Madders]

My hon. Friend certainly knows how to get me to attend a constituency—with the offer of a pint—and I look forward to taking him up on that. He has raised an important point about medical issues. Obviously, there have been some recent changes in neonatal leave and care, which is a huge step forward, but we ought to discuss pre-delivery issues further, so I look forward to having that pint and that conversation.

[Chris McDonald (Stockton North) (Lab)]

In his statement, the Minister mentioned the very low level of take-up of shared parental leave. Would he agree that that is partly due to the gap in pay between men and women, and that if we can normalise paternity leave in our society, that will help to make sure that both mams and dads have equal pay?

[Justin Madders]

That is an important point, and I expect we will be examining it as part of the call for evidence. I referred to the work that Aviva has done in this area. That organisation has clearly seen a culture shift, whereby it is now completely normal and acceptable—indeed, it is encouraged—for both parents to take their share of leave. We can all take lessons from that.

Space Industry

Chris McDonald Excerpts

Wednesday 11th June 2025 Westminster Hall

[Chris McDonald (Stockton North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Betts. When we think about space, it is a natural instinct to look towards the skies, but actually someone wanting to find out a lot about what is happening up there could do much worse than dive one mile underneath the North York Moors—something I did a number of years ago when I went underground at the Boulby potash mine in the constituency of my hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer).

I had never been down a mine before, and this was the second deepest mine in Europe. In the cage, we were swallowed into the darkness and down this incredibly deep lift shaft, then travelled miles underground, bumping around in a beat-up old Land Rover to get to the face of the mine. We then came to a state-of-the-art facility: an underground dark matter laboratory operated by the Science and Technology Facilities Council. It is positioned there because it is safe from atmospheric radiation. Part of what the laboratory does is enable research into dark matter, which will help us to understand how to survive in hostile environments—on Earth and beyond it, in space—and contributes to technologies such as quantum computing. That is just one of the facilities that forms the cornerstone of the north-east of England space community. I want to talk a bit about that today. I must also declare that a close relative of mine is employed adjacent to that sector.

When NASA decided to build the James Webb space telescope, that was of course a great national effort for the USA, but it came to Durham for the development and engineering of the telescope. It was Durham University’s centre for advanced instrumentation that constructed the infrared spectrograph integral field unit— I am sure that everyone here knows what those five words mean individually, although when taken together they might be a little more confusing.

We heard from the hon. Member for Wyre Forest (Mark Garnier)—I congratulate him on securing this debate—about the defence applications for such sensing technology, and there can be that crossover with different industries. But that centre at Durham University had the ability to develop and manufacture those components. We should be proud, as a nation, that NASA comes to the UK to obtain such components.

Space is happening in the north-east, particularly at NETPark, which is in the constituency of my hon. Friend the Member for Newton Aycliffe and Spennymoor (Alan Strickland), but also quite close to my constituency; many of my constituents work there, too. It is home to three of our catapults: the Satellite Applications Catapult, the High Value Manufacturing Catapult, and the Compound Semiconductors Applications Catapult. It also houses a number of companies. Filtronic makes mission-critical electronic components in the satellite supply chain; Lockheed Martin is working with Northumbria University on the North East Space Skills and Technology Centre; and Octric at Newton Aycliffe is the Government owned semiconductor manufacturing facility.

Interestingly, Durham University business school is also working on the legal and ethical aspects of space exploitation, as we put a framework around how we can globally work together in space. There are wider economic benefits in our region. Currently, the sector contributes £130 million to our local economy; 1,300 people are employed in about 48 businesses. But the north-east of England space cluster hopes to grow to 10,000 employees over the next few years.

Our regional strengths are in space manufacturing, earth observance, climate intelligence and connectivity. Having listened to the hon. Member for Strangford (Jim Shannon), I think there are great similarities between the strengths in the north-east of England and in Northern Ireland—clearly, the satellite communications and technologies are similar; perhaps our shared history in the aerospace and defence sectors has enabled us to develop those.

However, there are gaps in this growing cluster and things we could do to enhance it. I have spoken a bit about the strength in our local universities, which provide early-stage research, and in the businesses. But there is a gap in the middle—there always is. Our catapult centres can help with that, but in the UK many sectors have suffered from having developed technologies but then not progressed them through the so-called valley of death, so that they are then exploited elsewhere. If we want to take advantage of our great opportunity for financial investment, identified by the hon. Member for Wyre Forest—it could be the engine that really drives the growth of the 48 primarily smaller businesses in the north-east of England—then we need the Government to work with industry to de-risk and accelerate those technology investments. I hope that the Government will invest, particularly in those catapult centres at NETPark, while supporting small businesses as they develop those technologies as well.

Space is happening in the north-east of England. It is one part of the UK’s space economy. It will certainly be important for the future of the economy of north-east England and vital for our defence and aerospace industries, too.

[Mr Clive Betts (in the Chair)]

We now move on to the Front-Bench speakers. I call Victoria Collins, for the Liberal Democrats.

US-UK Trade Deal: Northern Ireland

Chris McDonald Excerpts

Monday 12th May 2025 Commons Chamber

[Jonathan Reynolds]

We have discussed this issue across the Chamber on several occasions. We as a Government are not proposing any changes in how the UK and Parliament ratify treaties. I have never given the promises that the hon. Gentleman has mentioned; I have not changed my position. The position is as it always has been—that Parliament has a key role in scrutinising treaties, and any changes that require legislation or alterations in our domestic laws go through Parliament in the usual way.

I think the hon. Gentleman will recognise that this week there could have been announcements of job losses and restructuring that would have been very difficult for a range of important sectors in our economy, and I do not think any Member of Parliament would have wanted to see that happen because of a parliamentary process. I understand that the Liberal Democrats want us to rejoin the customs union, and that therefore trade deals with the United States or India would not be possible. That is consistent and fair, but it would have been very painful if that had been the UK Government’s position going into negotiations.

The hon. Gentleman asks about the impact of any potential issues in the global trading system on small businesses and the wider economy. They are significant for our bilateral relationship, but he will also know that the UK is very exposed to wider relationships because we are an outward-facing economy. That is why we have to be on the pitch with our sleeves rolled up, trying to find solutions for ourselves that other countries can follow.

The hon. Gentleman asks a very pertinent question about the film industry. Again, for any area where there has been the suggestion of sectoral tariffs but they are not yet in place—to be honest, it is not entirely clear what would be the subject of a tariff in the case of a film—we have language in the agreement that reflects that. We would cite that as an existing area where there is a really strong and mutually beneficial bilateral trading relationship between ourselves and the United States.

[Chris McDonald (Stockton North) (Lab)]

I welcome this trade deal, and particularly the beneficial impact it will have on the steel and automotive sectors. I was pleased to hear the Secretary of State mention his discussions on ethanol, where I know some concerns have been raised. I have spoken to industry representatives, and they are confident that they have a solution that will work well for the Government’s trade deal. Notwithstanding his meeting with Ensus on Wednesday, will my right hon. Friend meet me and senior representatives of the UK’s two bioethanol producers to discuss how they can make the Government’s trade deal with the US a major success?

[Jonathan Reynolds]

I am grateful to my hon. Friend for his question, and for his industrial expertise. I promise to have that meeting. Whenever trade arrangements have an impact on domestic industry, it is important that we work as a partner to industry in order to address that. He is right to say there are two substantial bioethanol plants in the United Kingdom that might be affected, and we are already setting up a process to work with them, as he has requested.

British Steel

Chris McDonald Excerpts

Tuesday 22nd April 2025 Commons Chamber

[Sarah Jones]

I hope the hon. Gentleman understands that the interventions that we made in this case were different for a number of reasons. When we were in Opposition, we worked with Tata to try to get it to change its plans, but we were unsuccessful. When we came into Government, we improved the deal that the previous Government had negotiated and we improved the redundancy offer. We got Tata to commit to invest in assets and free up land for other things, and we got it to provide a package of measures to improve that situation. The hon. Gentleman is right that that package meant the closure of the blast furnaces and the building of an electric arc furnace, with the closure happening before the electric arc furnace arrived, and because of the way that electric arc furnaces work, they are more efficient and need fewer people. We have been working really hard through the transformation board, led by the Secretary of State for Wales and the Welsh Government, to ensure that everybody has a significant package of support to try to ensure they transition to other jobs. That work is ongoing and progressing well, and we will continue to focus on it.

The two situations were fundamentally different. In Scunthorpe, British Steel was in the middle of a consultation on potential redundancies, and it failed to secure the materials to keep the blast furnaces going, which would have completely broken what British Steel should have been doing during that consultation. We could not allow that to happen, those blast furnaces to close and thousands of people to be suddenly made redundant, which is why we intervened in the way we did.

[Chris McDonald (Stockton North) (Lab)]

I thank my hon. Friend for her statement and for her action on British Steel. I extend my thanks to the officials in her Department, who I know have worked tirelessly in support of our Ministers to secure a future for the business. The Government’s plan for change has changed the lives of steelworkers in Scunthorpe and Teesside. People I work with, and their families, will feel a sense of relief—I feel a sense of relief. Ultimately, it is the customers of British Steel who will pay the wages of those workers in the future. In one of the future updates that the Minister has promised, can we cover the product and market development for British Steel, and how British Steel can better penetrate the UK market and increase its market share for domestic production?

[Sarah Jones]

I thank my hon. Friend for his work and for the support that he has provided to me, officials and others because of his expertise in this space. He is right to thank staff; they have worked unbelievably hard, and I am very grateful for what they have done. He is also right to talk about how we ensure that the product market develops in the way that we want it to. We are looking at how we increase demand in the UK, as well as at procurement and other issues, so that we are not just trying to save our existing provision, but to expand our provision so that the steel industry can start to grow, instead of halving as it has done over the past 10 years under the Tories.

Steel Industry (Special Measures) Bill

Chris McDonald Excerpts

2nd reading
Saturday 12th April 2025 Commons Chamber

[Chris McDonald (Stockton North) (Lab)]

In 1976, a group of steelworkers emerged from the Templeborough steelworks following a night shift. At the time, Temple-borough was the largest electric arc steelmaking plant in the world. Those steelworkers had just done something rather spectacular: they had broken a shift record. They were surprised to find a letter from the Prime Minister, Jim Callaghan, congratulating them on their contribution to the national effort. After 48 years, it is marvellous that we finally have a Prime Minister who is prioritising the steel industry once again.

I know what it is like to emerge bleary-eyed from a night shift on a steelworks. As much as we are emotionally attached to our steelworks, the past analogies are not entirely helpful here. There is too much of a narrative in this country that steel is a sunset industry, when in fact it is not only essential, but advanced. Perhaps this is the time for me to direct Members to my entry in the Register of Members’ Financial Interests, as the former chief executive of the UK’s national steel innovation centre.

A lot of that innovation is embedded in our facility in Scunthorpe, from advanced high-speed rail from the rail mill to rods that are drawn down to wire the thickness of a human hair, produced to pharmaceutical levels of precision. The beam mill in Teesside is one of a handful of plants capable of producing large-scale beams that have been used to build buildings from Hong Kong through to the west coast of the USA. The Skinningrove works produces the tines for yellow goods for Caterpillar, which move directly into that factory. I am sure that all Members agree on how vital those plants and facilities are, but they may be unaware that two thirds of the steels we produce today did not exist 15 years ago, such is the level of continuous innovation in the steel industry.

Everything that we have is made either from or with steel. Our steel industry has declined so significantly over the past 14 years that just last week, when I went to the constituency adjacent to mine to visit the Hartlepool pipe mill, which makes the pipes for the carbon capture and storage network in which this Government have invested £4 billion, I saw that stamped on the plates of steel was the word “Voestalpine”. An Austrian steel producer that sits in the foothills of the Alps is able to produce plate steel more competitively than those in the UK, while we have a plate mill in Scotland that is practically idle—the slabs for that plate mill would have been produced in the Scunthorpe steelworks.

I welcome the legislation today as an opportunity for us to take back control of our steel industry and deal with the chaotic fragmentation of the industry that occurred over the past 14 years. I believe that the UK can be just as competitive as steel companies in Austria, Germany, France, Spain or the Netherlands, which are, in fact, the biggest importers of steel to the UK.

[Michelle Scrogham (Barrow and Furness) (Lab)]

Will my hon. Friend give way?

[Chris McDonald]

I am sorry; given the shortage of time, I will not.

I also believe that we can be at least as good as the steel industry in Belgium, which is now larger than the steel industry in the UK. Clearly, there was a lack of ambition on the part of the previous Government. They did not believe that our steel industry could be as competitive as Belgium’s.

[Julia Lopez (Hornchurch and Upminster) (Con)]

Will the hon. Gentleman give way?

--- Later in debate ---

[Chris McDonald]

I am sorry, but I am not going to give way, simply because of the lack of time.

It is important to correct the record on a number of earlier comments. The hon. Member for Boston and Skegness (Richard Tice) and others referred to the coal from the west Cumbria mine, but I must inform the House that the management of British Steel has ruled that coal out on the grounds of quality. The sulphur levels are too high.

[Richard Tice]

rose—

[Chris McDonald]

I would be quite happy to talk to the hon. Gentleman about steel desulphurisation in the Tea Room later, if he would care to join me. I also completely refute his comment about bringing in global expertise—we have the expertise in the UK to run steel companies effectively. Again, I would be happy to introduce him to people who could do that, if he wishes to know.

It is important to remember that the steel market globally is not a free market, which is why Governments work together. The US Government use tariffs and blocked a merger between Nippon Steel and U.S. Steel. The French Government traditionally use procurement; the German Government subside their steel industry with energy prices; the Chinese Government give cash. It is really important to recognise that steel companies do not compete in a free market, and that if we ask our steel companies to do that, we are asking them to compete with national Governments overseas and letting those national Governments set our steel and industrial policies, and, fundamentally, our defence policy. I think that is unacceptable. We need to recognise that the corporate interest of a company is not the same as the national interest of the UK. The Secretary of State has recognised that and shown real leadership.

I want to reserve my last remarks for the steelworkers in Scunthorpe. I worked in Scunthorpe for a time, both at the ironworks and at the steelworks. To the steelworkers in Scunthorpe, I say: I know exactly the pain that you are going through. I am sure that they will be relieved by the words of the Secretary of State.

We all think fondly of the four blast furnaces in Scunthorpe—the four queens: Bessie, Vicky, Mary and Annie—but ultimately, I think we all recognise that their time has come. While they will be nursed into their ultimate retirement, we look forward to regenerating the steel industry in Scunthorpe and around the UK with the most modern, most efficient and most high-productive steel plants. Just as a past Labour Government did when they nationalised the steel industry for the second time in 1967—it was so good we nationalised it twice—this time, we can hopefully work with the industry to create a world-leading steel industry for the future.

Budget Resolutions

Chris McDonald Excerpts

Wednesday 6th November 2024 Commons Chamber

[Chris McDonald (Stockton North) (Lab)]

Several of the previous speakers, including the hon. Members for Solihull West and Shirley (Dr Shastri-Hurst), for East Wiltshire (Danny Kruger) and for Witney (Charlie Maynard), expressed concerns about growth and productivity and I hope to draw on my previous experience working in industry to set their minds at rest, but we first need to acknowledge the dire starting point and the damage done both to our economy and to business confidence by the last Government.

I know from my time spent in industry that over the last decade and a half our country has lost out in the race for international investment from a combination of political uncertainty and a long-standing indifference to industrial policy. I listened carefully to the words of the hon. Member for Great Yarmouth (Rupert Lowe) and I think he must have read a different Budget from me. The Budget I read committed us to public sector investment of over £100 billion over five years, which along with our modern industrial strategy sets the scale of the Government’s ambition for increasing prosperity and security across the whole of our country.

Several Members, including the hon. Members for Wimbledon (Mr Kohler), for Tunbridge Wells (Mike Martin) and for Didcot and Wantage (Olly Glover), mentioned small businesses. These are the very businesses which stand to benefit from our industrial strategy as our new approach to industry and manufacturing sees the private sector crowding in investment, producing well-paid jobs and exports that will support our small businesses in supply chains. This will also reverse the tide of deindustrialisation, a frankly bizarre policy of inaction enacted by Conservative Governments over many years that has left much of our industry, including steel, chemicals and ceramics, mentioned by my hon. Friend the Member for Stoke-on-Trent North (David Williams), at a serious disadvantage.

It seems clear that to grow our economy we need to boost productivity and simply build more factories, but I know as an advocate of industrial strategy that this position is not a settled one, particularly in the party opposite. That is in big contrast to the collaborative approach of this Government, who work pragmatically with business leaders. We have heard some warm words from Conservatives about industrial strategy, including from Opposition Front Benchers, but they perhaps have not had time to consult with their new leader, the right hon. Member for North West Essex (Mrs Badenoch), who has described such policies as part of the law of diminishing returns.

Having seen my right hon. Friend the Secretary of State for Business and Trade secure £63 billion of private sector investment, we can be sure, to borrow a metaphor from the right hon. Member for South West Wiltshire (Dr Murrison), that had their goose not been cooked at the last election, returns would most certainly have been the diminished.

This Budget will be of benefit to my constituents in Stockton, Billingham and Norton who value well-paid industrial and manufacturing sector jobs. I can understand the confusion of the right hon. Member for Beverley and Holderness (Graham Stuart)—he is not used to a Government who deliver on their manifesto—but this Government are determined to do that. We will release the finances required to restore the public services that the people of Britain deserve and only a Labour Government can deliver.

Steel Industry

Chris McDonald Excerpts

Wednesday 16th October 2024 Westminster Hall

[Chris McDonald (Stockton North) (Lab)]

It is, as always, a pleasure to serve under your chairmanship, Mrs Harris, and I congratulate the hon. Member for Boston and Skegness (Richard Tice) on securing the debate. As many hon. Members will know, I have a background in the steel industry, so, rather than recite all of my interests, I simply refer people to my entry in the Register of Members’ Financial Interests.

I listened very carefully to the speech from the hon. Member for Boston and Skegness. There were a few points of difference, but, actually, there was much on which I agreed, so I look forward to him and his colleagues coming forward and supporting the Government’s steel strategy in due course.

Turning to the position in which we find ourselves in the steel industry, the Government have an unenviable task as a result of the legacy that we were left by the previous Government. I listened when the hon. Member for Brigg and Immingham (Martin Vickers) talked about the changes to tariffs made by the previous Government. They did make those changes, but they stuck rigidly to a suite of policies that denied the possibility of private sector capital investment coming into the UK’s steel industry by making it unviable. I know that well from the international investors I worked with in the industry. They were very keen to invest in the UK, but we could never get an appropriate rate of return as a direct result of policies pursued by that Government.

The Conservative Government knew that well; they knew it when the Redcar blast furnace closed in 2015 and when they stood back and let it fail for the want of the purchase of some coal. At the time, it was the most productive and efficient blast furnace in Europe. The hon. Member for Brigg and Immingham mentioned Scunthorpe; prior to 2020, the Conservative Government poured £1 billion into Scunthorpe but did not invest any of that money in transitioning to new technology that would have actually created a great future for people in Scunthorpe, and a return for the taxpayer, too. Instead, they sold the plant off cheaply.

Therefore, I do not envy the position of my hon. and right hon. colleagues in the Department for Business and Trade, who are wrestling with this legacy. Essentially, they are putting out the fires of the previous Government, and we will see, when the steel strategy has been brought forward, how we can create a bright future for the industry. We need to do that, and I support the calls to do it, but I think that the challenge is not actually about adherence to net zero; it is about adherence to a different ideology, which has been to assume that the steel industry operates in a free market and that we can treat it as such. It does not. Other countries around the world support their steel industries, so we need to create a level playing field for investment in our steel industry, too. If we do that then we can attract billions of pounds of private sector investment into our industry, as countries such as Austria, Sweden, Germany, France and so on do.

Over the past 10 years we have seen the UK steel industry collapse to the same size as Belgium’s. Surely the UK should have the ambition to at least be as good as Belgium and have a steel industry that can serve us as well as the Belgian steel industry serves its country. Of course, we can do that to compete globally and to create the products that we need for our green transition. The previous Government knew that quite well: a report on confidence and capabilities, which I co-authored, can be found on the Government website from 2017. It identified gaps in plate steels for offshore wind, seamless tubes for nuclear power and other areas as well. The previous Government made no effort to fill those gaps because, of course, they turned their back on private sector investment.

It is important that the steel strategy is brought forward in a way that will attract private sector investment and enable us to accelerate the green transition of our steel industry. Here I come to the point of difference with Opposition Members: the green transition is not an ideology, it is an economic imperative. We need to move away from blast furnaces because they are unproductive compared with the latest steel technologies. Steel plants operating electric arc furnaces are five times more productive than those operating blast furnaces.

[Lee Anderson]

indicated dissent.

[Chris McDonald]

The hon. Member chunters about it, but the most productive steel plant in the world is based in the USA. It is entirely privately funded and produces the same quality of steel as Port Talbot at the same quantity with one fifth of the workforce, because it is automated and it uses electric arc furnaces. If we get energy prices right, we can make that investment here and we can produce those steels too.

The UK is the second largest exporter of scrap in the world. That is a valuable natural resource that we could use in the UK, but we do need primary steelmaking and we need it to use the most efficient technologies. I am afraid, for those people who adhere to blast furnace technology, that that is not the blast furnace. I look forward to my hon. Friend the Minister bringing forward the steel strategy, and to supporting it and debating it further. I look forward to a bright future for steel in the UK.