British Steel: Negotiations

Holly Mumby-Croft Excerpts

Thursday 2nd February 2023 Commons Chamber

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

(Urgent Question): To ask the Secretary of State for Business, Energy and Industrial Strategy if he will make a statement on negotiations between the Government and British Steel.

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

First, let me begin by saying I understand that this must be a very concerning time for British Steel employees, following the discussions that took place between the company and union representatives yesterday. Of course, these are commercial decisions taken privately by the firm, and conversations with the unions are private.

We all recognise that Putin’s illegal invasion of Ukraine has created challenging global trading conditions for steel, but it is very disappointing that British Steel has chosen to take this step for its employees while negotiations with the Government are ongoing. The Business Secretary and I have always been clear that the success of the UK steel industry is a priority. We have worked intensively with British Steel on support to help safeguard and unlock shareholder investment and will continue to do so. Steel is important for our economy, supporting local jobs and economic growth. We are committed to securing a sustainable and competitive future for the steel sector. I must put on record my thanks to my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) for all the insight and advice she provides to me as the Minister.

We have already taken action to protect the steel industry from unfair trade and reduce the burden of energy costs, including £800 million in relief for electricity costs since 2013. That is on top of a range of other support funds worth £1.5 billion to support efforts to cut emissions and become more energy efficient across the sector. It is firmly in the interests of the sector that we continue our engagement. We want British steel production to continue in the United Kingdom, to protect our steel sovereignty as a nation and build a stable, decarbonised and competitive industry. It is in the interests of employees, their communities and all areas of the UK that benefit from the UK steel supply chain, and I encourage the company to continue discussions with us to reach a solution.

I can confirm that the Government have put forward a generous package of support, which we believe, combined with shareholder action, would put British Steel on a sustainable and decarbonised footing. My officials are helping British Steel to understand that package in more depth, and I am hopeful that together we will find a solution that protects jobs while setting British Steel up for success. Obviously, decisions that the company takes are its commercial decisions, but I will continue to work with colleagues across Government to ensure that a strong package of support is available, including Jobcentre Plus and the rapid response service, if needed. Members across the House should be in no doubt of the Government’s determination to continue support for the UK steel industry, and I urge British Steel to continue discussions to help us secure its future in the UK.

[Holly Mumby-Croft]

As my hon. Friend has set out, in the midst of these negotiations with Government, involving hundreds of millions of pounds of further support on top of what she has listed, Jingye sat down yesterday with the unions and talked about laying off 800 British Steel workers. I do not want to break down my communications with British Steel, because I will fight for these jobs and continue to talk to it. Accordingly, I will temper my language today, but I want to be clear that I cannot and will not defend this decision, which is unacceptable in every possible way for my constituents. This is not a way to behave. It sends entirely the wrong message and breaches the spirit of negotiations, which I believe are the result of a level of Government focus on steel and its wider issues, including energy and carbon costs, that are genuinely encouraging for the industry.

Hundreds of families in Scunthorpe are worried sick, wondering if and when they will lose their jobs. I want to add that I am very capable of challenging the Government if I do not think they are going far enough on steel, but that is not what is happening here, and I hold the company entirely responsible for how it decided to act yesterday.

I ask the Minister to do three things, please. First, will she challenge the company on whether it is actually credible to run its operations with 800 fewer people? I have been told that it would not be possible to safely run the blast furnaces if that many team members were lost. Secondly, will she express in the strongest terms that this is not a way to do business and ask the company to immediately reconsider these potential redundancies? It is in its gift to do that, and if it publicly halted these redundancies, that would send a welcome and strong message to the community of which it is a part.

Thirdly, will the Minister reiterate this Government’s support for the thousands of world-class steelmakers in my patch, who are decent, hard-working, skilled members of our community? Will she tell them again today that we value their skills, we understand the importance of steel, we understand that we need it for every single thing we do in this country—from defence to growth—and that we are determined to do whatever it takes to make sure we do not become the only country in the G20 that cannot make its own steel?

[Ms Ghani]

Our lady of steel basically sums up the whole argument in her two minutes, and I do not disagree with much of what she has said. The decision to hold this meeting is a commercial one, but I agree with my hon. Friend that it is a peculiar way to do business, while we are in the middle of negotiations that will involve substantial amounts of Government support, which I will go on to describe.

I put on record, agreeing with my hon. Friend, that we make the finest steel in the world, and the steelworkers in the UK are the most skilled in the world. British Steel manufacturing is vital, and it cuts across everything we do, as well as issues around supply chain resilience brought on by Russia’s illegal invasion of Ukraine and issues around Chinese steel dumping. Steel is vital for our national security, just as it is for every sector involved in manufacturing and production. The Government are absolutely committed to the steel industry, and I will go on to describe that.

I make it clear that any decision that Jingye makes is a commercial decision, but it is our duty to make sure that if support is needed, we make it available, so our thoughts are first and foremost with employees and their families. We will work across Whitehall, whether that is standing up the Department for Work and Pensions rapid response service to support employees, working with the MoneyHelper scheme or working with the Department for Education’s National Careers Service.

I will spend a moment to explain the level of support that British Steel has already had. We have offered £120 million in grant funding through the exceptional regional growth fund to ensure that it can continue to work in the area. We have offered UK export finance to help it with new export contracts. In June, we extended UK Steel’s safeguards to protect domestic production. It has benefited from Government electricity price compensation for energy-intensive industries and the energy relief scheme for business. As I have mentioned, £800 million has been provided across the sector since 2013. It can also apply for help with energy efficiency, decarbonisation, low-carbon infrastructure, and research and development, where more than £1 billion is available in competitive funding for industry. The support is strategic and long term.

My hon. Friend the Member for Scunthorpe raised three points. She asked me to challenge the company on the number of employees it needs to continue functioning in a safe and stable way. Of course, we will drive that message home, and we will make it clear in the strongest terms that this is not the way to do business. She knows that I was on the Business, Energy and Industrial Strategy Committee for a few years, and we wrote a report on steel. Perhaps my language then was a little freer than I can be at the Dispatch Box. It is peculiar for this conversation to take place while we are in the middle of good negotiations, since the negotiations involve substantial taxpayer money. Obviously, these are sensitive negotiations, but I do not think that it is inappropriate for me to say that the Government want some assurances and guarantees linked to jobs. The message I want to send today is that we will continue to be available to ensure that discussions and negotiations continue.

I listed the huge support that the Government have already put in place for steel. If I may, I would like to share some of the other support available for the region in and around Scunthorpe. More than £20 million was given to Scunthorpe through the towns fund, and more than £10 million through the future high streets fund. More than £25 million in seed capital was given towards the Humber freeport, and more than £5 million to north Lincolnshire from the UK shared prosperity fund. I must put on record my thanks to my hon. Friend the Member for Scunthorpe for being such a fantastic campaigner and for securing that funding for her constituency.

These are ongoing, sensitive negotiations. I hope everybody across the House, regardless of what they think of the Government’s record, will send the shared message that negotiations and discussions should continue. It is appropriate that within those discussions we should expect some assurances on job security.