British Steel

Holly Mumby-Croft Excerpts

Wednesday 8th November 2023 Commons Chamber

[Holly Mumby-Croft (Scunthorpe) (Con)]

(Urgent Question): To ask the Secretary of State for Business and Trade if she will make a statement on the announcement made by British Steel on 6 November, and provide an update on the negotiations between British Steel and the Government, and on the Government’s position on virgin steelmaking in the UK.

[The Minister for Industry and Economic Security (Ms Nusrat Ghani)]

Steel is vital to the UK economy. I fully recognise the importance of British Steel to local communities, particularly in my hon. Friend’s Scunthorpe constituency, where the company is a major contributor to local economic growth, and where she campaigns incredibly hard for steelworkers.

Global conditions have been tough for steel companies around the world. That is why we have changed the competitive landscape for British Steel and other energy-intensive industries by announcing the British industry supercharger—a decisive package of measures to reduce the long-term electricity price gap that exists between UK energy-intensive industries and competitor countries. That support will mean that strategically significant UK industries, such as steel, are safeguarded against the high industrial electricity prices that they have faced in too many recent years. We have also provided over £730 million in energy costs relief to the steel sector since 2013, in addition to the energy bill relief scheme. Steel producers will continue to receive support until 31 March 2024 through the energy bills discount scheme.

As my hon. Friend is aware, the Government made an extremely generous offer of support to British Steel earlier this year to help it to invest in a decarbonised and sustainable future. We have continued to work intensively with British Steel since then and will continue to do so. However, she will also understand that the detail of those conversations remains highly commercially confidential and that any public discussion risks undermining talks.

I know that this must be a deeply concerning time for British Steel employees and others in Scunthorpe following the company’s announcement on Monday of its plans for future operations. I can very much assure my hon. Friend that we will help affected workers and their families, and that we are committed to finding solutions to enable the ongoing sustainable and decarbonised production of steel. Just last month, for example, we announced a £1.25 billion joint-investment package with Tata Steel to secure a decarbonised future for steelmaking in Wales. That has the potential to safeguard several thousand jobs across the UK. In 2020, the Government provided an emergency loan to Celsa Steel to help it continue trading during the covid pandemic, saving over 1,500 jobs, with a further 300 jobs created since the loan was made.

[Holly Mumby-Croft]

I stand absolutely unapologetically with steelmakers and my community today, and I do not support these moves. In this Chamber on 18 September, I asked the Minister for Industry whether she agreed that we need to retain a virgin steelmaking capability in the UK for strategic reasons alone. She said

“obviously, we need a place for virgin steel”—[Official Report, 18 September 2023; Vol. 737, c. 1125.]—

and that that place was Scunthorpe. That was reiterated the very same day by the Secretary of State, and so pleased was I with the comments that she made that I took contemporaneous notes of that conversation.

British Steel is a private company and can make business decisions as it sees fit, but I am clear that if it is seeking hundreds of millions of pounds of public money, the Government must leverage that money to protect steelworkers’ jobs and maintain our sovereign capability to make steel in the UK. Electric arc furnaces melt scrap; to make virgin steel from scratch, we need blast furnaces. Can the Minister tell the House how the UK will make virgin steel if all our blast furnaces are decommissioned? Can she tell us how many countries in the G20 are unable to make their own virgin steel? Would the Government be comfortable with us being entirely dependent on foreign imports for the virgin steel we will continue to need in this country?

Will any financial support offered to British Steel seek guarantees on steel jobs and lock in, as a minimum, an interim period of blast furnace production to allow us to explore green options to run them? Did the Government know that this announcement from British Steel was imminent? When will I get a response to my letter of 29 September to the Secretary of State? Why did the Department not contact me until 5 pm on Monday, when I was sent simply a short text message? What support is the Minister offering our excellent North Lincolnshire Council, which is proactively working with British Steel to bring additional green jobs on to the site? This Government have a good record on steel—they have paid workers’ wages. Can the Minister confirm that steel remains high on the Government’s agenda?

I have 3,500 of the world’s finest steelmakers in my constituency. It is my privilege to come out and bat for them today. Thank you, Mr Speaker, for allowing this urgent question.

[Ms Ghani]

My hon. Friend makes lots of very credible points—there is very little for me to disagree with. She does indeed make representations at the highest levels of Government, and her priority has always been steelworkers; she has never played politics with that role. I put on record my apologies if I have not done due diligence and provided the public service that she should have received by being contacted much sooner on that particular day. There is nothing she could say that I would not be telling myself off for even more, and I hope I will not fall short in communications going forward.

My hon. Friend is absolutely right: I did indeed say at the Dispatch Box that my personal opinion is that there is a strong place for virgin steel production in this country, and that, of course, is in her constituency. We are in the middle of live negotiations, and any decision taken by British Steel is a commercial decision. My hon. Friend is also right that we are able to carry out due diligence on any support we provide; it is taxpayers’ money, and our primary focus is to safeguard the sector and jobs, including in her constituency.

My hon. Friend is right to note that we have prioritised the UK steel sector, and we will continue to do so. We need to provide it with support as it transitions, because that is also a choice being made by manufacturers, customers and consumers who are looking for greener steel going forward. Any decision we take and any support we provide will be to ensure that the sector is sustainable and competitive. We want the sector not just to survive, but to thrive.

My hon. Friend spoke about the support we have provided to the sector to date. We have provided hundreds of millions of pounds of support to British Steel to deal with its emissions, and over £730 million in energy cost relief to the steel sector since 2013. We have put the supercharger in place, as well as the steel procurement policy note, which does its very best to ensure that we procure more steel here in the UK. We have provided support to Tata to ensure that that part of the country can continue to make steel and to protect those jobs, and we have provided support to Celsa. My hon. Friend talked about the support we are providing to North Lincolnshire generally—there is a huge amount of support there. Since 2018, the Government have committed over £200 million in investment in the north and north-east Lincolnshire area.

I cannot say much more at this time because we are in the middle of live negotiations that are commercially sensitive. When British Steel put out its press release, that was the first time I saw it, but we must recognise that it was a proposal; many things have to fall into place for such proposals to become accurate plans—not only will there be issues around planning, but our negotiations have to conclude as well. I do not doubt that I will continue to lean on my hon. Friend, and that she will continue to champion steelworkers in her constituency and across the country.