British Steel

Edward Leigh Excerpts

Wednesday 8th November 2023 Commons Chamber

[Ms Ghani]

Negotiations are indeed ongoing, which is why I am limited in what information I can put out in the public domain; information is of course incredibly sensitive. British Steel will make commercial decisions, but if it is hoping to secure Government support, we need to make sure that we are getting value for money for taxpayers.

The hon. Member asked why decisions have been taken on the electric arc furnace compared with other technologies. It is because the other technologies just cannot come up to speed fast enough. In particular, the hydrogen-based direct reduced iron equipment just cannot enable furnaces to transition at the speed at which they need to. He is very much aware of that, and this is also a challenge in Europe, not just in the UK.

Fundamentally, there are a number of challenges for the global steel sector. First, there are energy costs, which we have done everything we can to provide support for, with the hundreds of millions of pounds to cover energy costs and now the supercharger. Secondly, we have to ensure that we get more UK steel into the UK economy. That is why the public procurement note was incredibly important for us to do, and we will be able to secure millions of pounds for more UK steel projects. Thirdly, there is a major challenge in that advanced manufacturers, customers and consumers are looking for greener steel, and a lot of companies are trying to reflect on how they can provide a green steel option. Having said that, it is a particular kind of steel; as I said to my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft), for me that means a mix of virgin steel in the market as well. Of course, these are commercial decisions, but we need to make sure there is a mix to deliver for the UK market in particular.

The hon. Member for Stalybridge and Hyde (Jonathan Reynolds) talked about the environmental issues and about hydrogen. We export a lot of scrap steel, and that also has a carbon footprint, so for us to have the capacity to turn that steel into products we can use will be incredibly useful. The positive news is that we are the eighth largest manufacturing country in the world. We are going to need more steel, not less, but there will also be demand for more green steel, not less, and we are trying to ensure that we provide support to the steel sector so that it can meet those market needs.

[Sir Edward Leigh (Gainsborough) (Con)]

Many of my constituents work at Scunthorpe, and we are all obviously deeply concerned about them, but the whole House must be concerned about the Minister’s statements in terms of our national security. There is no other major developed country in the world that is giving up its traditional blast furnaces—the only way we can make virgin steel. Frankly, the Minister did not bother to answer a single one of the brilliant questions from my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft). Will she now make it clear to the House that this Government are committed, as a major economy, to go on making virgin steel? Do it now.

[Ms Ghani]

As I have said repeatedly at the Dispatch Box, I fundamentally believe we need to have virgin steel capacity in the UK, but these are commercial decisions, and negotiations are continuing. These are incredibly commercial decisions, and we are doing our very best to support electric and virgin steel capacity in the UK. We are very much aware of the challenges we have in importing steel and with the global markets when it comes to the price of steel, and that is why we need to make sure we have a mix. These are commercial decisions, which is why negotiations are ongoing. Fundamentally, the announcement by British Steel was a proposal—nothing is done yet. We are still in the middle of negotiations.