Energy-intensive Industries

Jamie Wallis Excerpts

Wednesday 24th November 2021 Westminster Hall

[Dr Jamie Wallis (Bridgend) (Con)]

It is a pleasure to serve under your chairmanship for the first time, Ms Nokes. I pay tribute to my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) for opening this very important debate.

On top of fierce international competition, the recent volatility of energy prices means that energy-intensive industries are facing significant challenges to remain competitive in the global market. That is putting thousands of jobs and livelihoods at risk. That is why we need to take action now.

UK electricity prices for extra large industrial consumers in the second half of 2020 were higher than for any European Union member state. My hon. Friend will be aware that the steel industry, much like ceramics, is heavily reliant on vast amounts of heat to produce high-quality consumer goods and materials. With China now dominating the market, accounting for 53% of production, more needs to be done to protect the quality British steel we make here from crippling high costs, which will potentially exclude us from the very industry that we created.

The British steel market needs the Government to remain committed to it. The hon. Member for Aberavon (Stephen Kinnock) is absolutely correct to say it is a future-facing industry. We need the Government to remain committed to this future industry to protect the generations of families who have worked in and around it. Sadly, the number of people working in steel has already declined by half since 1990. We need to buck that trend if we are to deliver on our 2020 mandate. Sectors such as steel are vital to the Government’s levelling-up agenda, with modern technology and infrastructure increasingly dependent on steel for components for everything from wind turbines to electric cars. Consequently, it is essential that we support these industries as they struggle to respond to higher energy prices.

The Port Talbot steelworks is located in the constituency of the hon. Member for Aberavon, just on the doorstep of Bridgend and Porthcawl, and hundreds of my constituents are employed there, much like their families before them. The jobs, and the people, need to be safeguarded.

The Government currently provide compensation to energy-intensive industries for higher electricity costs associated with low-carbon energy emission reduction policies. Between 2013 and September 2020, that provided the steel sector with £480 million. Nevertheless, the steel sector is calling loudly for further support from the Government. The hon. Member for Newport East (Jessica Morden) highlighted the UK Steel electricity price report of February 2021, which estimated that electricity prices would cost UK steelmakers an additional £54 million, compared with production costs in Germany. For the past five years, the cost is £254 million. These are clear danger signals. We are teetering on the edge and we need urgent action.

I would strongly welcome more targeted Government support for hydrogen technology within the steel sector, to help our green transition to cleaner and more affordable energy. I was delighted to see the Chancellor’s announcement in the autumn Budget of £140 million to establish the industrial decarbonisation and hydrogen revenue support scheme, and the £240 million in the net zero hydrogen fund—but more needs to be done, working in conjunction with the steel industry.

I would welcome a commitment to work with international partners that are world leaders in exploring hydrogen technology, such as Sweden and the United States, to explore potential areas of co-operation. Investment in the green hydrogen-based steel demonstrator project via the clean steel fund requires more clarity, which I hope can be provided today. We ought to prioritise green hydrogen in the net zero hydrogen fund, with the goal of commercialisation.

Looking ahead, I firmly believe hydrogen is key to achieving the Government’s ambitious net zero strategy and to building a green economy, and that such technologies will be crucial for the future development and protection of our steel sector. Now that we have taken back control of our own laws, including those on state aid, we can and we should go further. Finally, more support for transition to a hydrogen-steel economy should be considered as vital in how we respond to the current major challenges to the steel sector.

Nuclear Energy (Financing) Bill (Third sitting)

Jamie Wallis Excerpts

Committee stage
Thursday 18th November 2021 Public Bill Committees

[Dr Whitehead]

The hon. Member makes an important point, at least part of which we will discuss when we come to the procedures under which a potentially failed project might be rescued or transferred to other undertakings so that it can be delivered and completed, or if already operating, can continue to operate.

[Dr Jamie Wallis (Bridgend) (Con)]

In what circumstances is it conceivable that a nuclear project would be deemed not to have a realistic prospect of completion but at the same time to be value for money?

[Dr Whitehead]

It is quite possible that the Secretary of State could deem the first two criteria on the basis of work that the company had done to approach designation. However, unless the Secretary of State has in mind the whole picture at the point of designation—in the previous group of amendments, we touched on some of the things concerning the whole picture—it would be possible for him to conclude that, yes, on the basis of the work done so far, the particular mechanisms looked like they might produce, say, value-for-money electricity at a rate per kilowatt-hour that was compatible with market levels of electricity at that point or in the future or with value for money as far as other electricity production is concerned, but he might still not have a handle on whether the undertaking that the nuclear company was about to engage in was sound in the overall, as far as completion was concerned.

The hon. Member for Kilmarnock and Loudoun touched on an important lesson in that respect, which ought to be put before the Committee. He mentioned a case in California—it was not quite in California; it was a little way a way, although it began with the same letter. I am talking about the experience of a nuclear power plant in South Carolina in the United States. When I say the experience of a nuclear power plant in South Carolina, I do not mean that—because there is no nuclear plant in South Carolina; there are a bunch of a concrete foundings, walls and various other things that look like a nuclear power station, but it does not operate, it has never produced a single kilowatt of electricity and it remains abandoned.

More significantly, that project not only was abandoned but was commissioned precisely on the sort of criteria that are contained in the Bill. All those things were gone through by the South Carolina legislature, which put in place something remarkably similar to a RAB. Indeed, the bill payers of South Carolina were required to stump up money for the project as it progressed, and I am sure hon. Members will be interested to know just how much money went from the bill payers of South Carolina to that project and how much they got out of it as a result of introducing a RAB model in South Carolina. The answer is nothing. Some £9 billion of customers’ money went into the project, and they will continue to pay for that lump of concrete for the next 20 years in their bills because of the way in which the thing was constructed, all on the basis of agreements that looked pretty similar to what is in the Bill.

What South Carolina did not do was ask serious questions about the resilience of the various partners and companies involved in the project in the light of changing circumstances in terms of the construction of the project and the health of the companies involved. Among other things, costs went through the roof, the timescale increased substantially and one of the companies that was in charge of the project effectively went bust—it called for chapter 11 protection and was therefore unable to continue with the project. All those things could have been foreseen by the South Carolina legislature, but were not. The project went ahead, with the customers footing the bill, as various reviews subsequent to the collapse of the nuclear programme said, on the basis of something that was extremely unlikely to ever come to fruition as a nuclear power plant, not only because of the dodgy nature of the financing of the project but because it had completely unrealistic timescales—those involved expected to produce electricity within six years from the start of production and so on, none of which was properly overseen.

Nuclear Energy (Financing) Bill (Fourth sitting)

Jamie Wallis Excerpts

Committee stage
Thursday 18th November 2021 Public Bill Committees

[Dr Whitehead]

I concede that I may not have fully understood all the various tests that are undertaken to usual industry standards, but nowhere in this clause does it say that those tests include the production of power. That is my central point. It is a bit like going into a car showroom and being shown a really nice vehicle. It has all the bells and whistles on it, and all the guarantees; it looks greats and the paint is really good. But when one asks to go for a test drive, the person in showrooms says, “I’m sorry, you can’t do that, Sir; it hasn’t got an engine in it.” Surely it must be about producing power. That ought to be explicitly in the Bill. That is my only point. If the Minister thinks that, concealed in all these various tests is the production of power, which does not seem to be the case to me, then maybe that is not needed on the face of the Bill. I think it would be rather good if it were on the face of the Bill.

[Dr Jamie Wallis (Bridgend) (Con)]

Does the hon. Gentleman agree that we are in a very sorry place indeed if all the usual industry standards and practices for nuclear energy production do not actually include the production of energy?

[Dr Whitehead]

We would be in a sorry place, but that is effectively what the clause appears to state. It is all about the fact that it could produce energy, not that it does produce energy. Those are two potentially different things. The hon. Gentleman is right about the industry standards that set it all up to make sure that energy can be produced. I merely think it might be a good idea if we found out if it did produce that energy.

Oral Answers to Questions

Jamie Wallis Excerpts

Tuesday 16th November 2021 Commons Chamber

[Kwasi Kwarteng]

I remind the hon. Lady that this Government are the first UK Government to commit to a North sea transition deal. That deal is a world first; it is leading the world and showing how we can decarbonise a historically very productive sector to drive new technology and new economic opportunity.

[Dr Jamie Wallis (Bridgend) (Con)]

T10. I recently had the pleasure of meeting with Infinite Renewables in my constituency, which has done great work facilitating renewable projects across the UK. It pointed out to me that the strike price for nuclear power provides generous support to nuclear projects, but those supported by private wire power purchasing agreements in the renewables sector get very little support. What are the Government doing to facilitate private wire PPA renewables in the UK?

[Greg Hands]

I welcome Infinite’s work supporting renewable projects and my hon. Friend’s engagement in this. PPAs can improve the financial viability of renewables built without Government support. We anticipate that PPAs will complement Government mechanisms such as the contracts for difference scheme. Officials are investigating whether Government can play a role in encouraging further growth in the PPA market, and of course I am happy to meet my hon. Friend on this at any time.

UK Steel Production: Greensill Capital

Jamie Wallis Excerpts

Thursday 25th March 2021 Commons Chamber

[Kwasi Kwarteng]

I am very happy to defer to you, Mr Speaker; I have huge regard for your position, as I have mentioned many times. With respect to the remarks of the hon. Member for Manchester Central (Lucy Powell) about my being dragged back to the Dispatch Box, that is not the case at all. As she knows, I was the Secretary of State who reconstituted the Steel Council on 5 March. That was a top priority for me, because I feel that we have a future for UK steel: the Government’s infrastructure plans will need around 5 million tonnes of steel over the next decade. It is absolutely a commitment of mine, as Secretary of State, to ensure that we have a viable steel industry in this country.

[Dr Jamie Wallis (Bridgend) (Con) [V]]

In 1998, 234 jobs were lost at a steel mill in Darlington. In 2001, the Llanwern steelworks closed, with 1,300 jobs gone. In 2003, 95 jobs were lost at the Shotton site in Deeside, and 116 at the Avesta site in Panteg. In 2004, we lost 156 jobs in Scunthorpe and a further 80 in Lincolnshire. In 2006, two closures led to losses of 250 jobs and 40 jobs. Of course, in February 2010, Teesside Cast Products was mothballed, putting 2,400 jobs at risk. Does my right hon. Friend agree that, with the Opposition’s abysmal record on steel, the Government are right to discard their failed vision and continue with our proactive approach to helping the sector?

[Kwasi Kwarteng]

My hon. Friend is absolutely right. What devastated the steel industry was, as we know, 13 years of Labour Government. We have made it very clear, with our industrial decarbonisation strategy, published only last week, that we remain committed to a UK steel industry and a decarbonised future, and also to green jobs, particularly in in our levelling-up agenda.

Employment Rights: Government Plans

Jamie Wallis Excerpts

Monday 25th January 2021 Commons Chamber

[Dr Jamie Wallis (Bridgend) (Con) [V]]

I refer the House to my entry in the Register of Members’ Financial Interests.

Now that we have left the EU and regained full control of our laws, it is absolutely right that Members in this place have the power to debate and decide what works best for the UK, and therefore which rules should apply, including on things like business growth, innovation, job creation and, of course, strengthening protections for workers. I was pleased to hear Ministers reaffirm, as they have time and again, the Government’s commitment to not lowering the standards of workers’ rights. Despite the scaremongering from the Labour party, this country goes further than EU minimums on workers’ rights, such as on paid leave, maternity leave and entitlement to sick leave, among others.

Moreover, under this Government the national living wage is set to increase again to £8.91 an hour from April 2021. This means about £345 extra per year for someone working full time. For the first time, more young people will be eligible for the national living wage, as the age threshold will be lowered from 25 to 23. Helping the low paid, improving access to opportunity, and encouraging innovation and growth is what the Conservative side of the House continues to fight for. That is why in our 2019 manifesto we committed to raising workers’ rights and standards, including new protections for workers, while preserving the dynamism and job creation that drive our shared prosperity. That was an election, of course, in which this Government received the overwhelming endorsement of the British public. It is a pledge I know the Government are committed to maintaining.

In my experience the best way to improve conditions for British workers is to have low unemployment in a free market, accompanied with targeted and direct investment in skills and training. That must be the case, and even more so as the covid-19 pandemic continues to disrupt our daily lives and our economy. As well as a sustained period of record lows of unemployment, this Government have gone further to protect and safeguard jobs by investing world-leading amounts during the pandemic and saving jobs with the furlough scheme, the self-employment income support scheme and a multitude of measures aimed at keeping businesses going during the pandemic. On low pay, on job creation, on lowering unemployment, on creating opportunity and on maintaining and enhancing workers’ pay and conditions, it is this Government that have the record to be proud of, and it is this Government that will make a success of Brexit for hard-working British people such as those in my Bridgend constituency.

Oral Answers to Questions

Jamie Wallis Excerpts

Tuesday 15th December 2020 Commons Chamber

[Alok Sharma]

As the hon. Gentleman knows, a whole range of support is available. I completely accept that not everyone will feel they have got precisely the amount of support that they would have liked, but a significant amount of support is available and, of course, all of this is always kept under review.

[Dr Jamie Wallis (Bridgend) (Con)]

  Many businesses are linked to the NHS supply chain, such as Zimmer Biomet, one of the largest employers in my Bridgend constituency. What discussions has my right hon. Friend had with ministerial colleagues about getting NHS non-urgent, non-critical procedures back up to pre-covid levels?

[Alok Sharma]

My hon. Friend raises an important point, and my right hon. Friend the Health and Social Care Secretary is working very hard to help NHS trusts return to pre-covid levels of elective care as soon as possible. I have been really quite impressed over the past months throughout this pandemic at how businesses, both within the medical field and outside, have come together to support the NHS.

Oral Answers to Questions

Jamie Wallis Excerpts

Tuesday 16th June 2020 Commons Chamber

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

What steps he is taking to support the business economy during the covid-19 outbreak.

[Dr Jamie Wallis (Bridgend) (Con)]

What steps his Department is taking to support businesses during the covid-19 outbreak.

[Alison Thewliss (Glasgow Central) (SNP)]

What steps he is taking to support the business economy during the covid-19 outbreak.

--- Later in debate ---

[Alok Sharma]

I have detailed discussions with all Cabinet and ministerial colleagues. I recognise the challenge ahead of us—there is no doubt about that—but we have provided a significant amount of support for the UK economy, and if that had not been put in place a range of independent commentators have made it clear that we would be in a far worse position.

[Dr Wallis]

The automotive sector is important to my constituency of Bridgend, as it is to the whole UK economy. Will my right hon. Friend outline what the Government are doing to help businesses in that sector recover from the impact of covid-19?

[Alok Sharma]

I have set out the full range of support available to all sectors across the economy, and the automotive sector can take full advantage of that. I would point out that the job retention scheme has been widely utilised by the automotive sector, with a recent survey by the Society of Motor Manufacturers and Traders showing that the scheme has been accessed for over 60% of full-time workers in the auto sector.

British Steel Industry

Jamie Wallis Excerpts

Tuesday 10th March 2020 Westminster Hall

[Dr Jamie Wallis (Bridgend) (Con)]

Thank you for giving me the chance to speak in this important debate, Sir Charles. It is a pleasure to speak under your chairmanship. I congratulate the hon. Member for Aberavon (Stephen Kinnock) on securing the debate just before the Budget, which is the right time to discuss this important issue. He is right to highlight that the steel industry plays a crucial role in our economy; that cannot be argued against. It is also important to note steel’s regional impact. Steel is particularly important in south Wales. The Tata steelworks provide a massive economic boost beyond the Aberavon constituency in which it resides. People live and work in Tata from right across south Wales, including my constituency of Bridgend.

Wales is the UK region that employs the second largest number of people in the steel industry, and it has been reported that Tata pumps about £200 million a year into the Welsh economy in wages alone. That does not take account of the wider effects on local businesses and the local supply chain, many of which link their success to the presence of Tata in south Wales.

A recent study by Cardiff University found that the total economic impact of Tata in Wales was approximately £3.2 billion. We must remember why that is important. Many communities in Bridgend and the neighbouring constituencies are among the poorest in the country. Any industry with such a dramatic economic footprint deserves our full attention and support. Our prosperity relies on thriving businesses big and small, so we must do all we can to keep them there.

The steel industry in Wales and right across the UK has gone through some real difficulties in the past few years. The hon. Member for Aberavon mentioned the decline and the difficult years, including the 32% fall we saw in 2016—the largest fall since 2008. While the economy as a whole may have recovered since the 2008 crash, steel has not kept pace. UK steel certainly requires more support.

One of the biggest challenges currently facing the UK steel industry is over-supply in the market, driven mostly by China. The figures speak for themselves: China produces about 928 million tonnes of steel, compared to just 7 million tonnes in the UK. The most notable effect of that is to drive down the price and make it more difficult for British companies to be competitive in the marketplace. I am therefore pleased that the UK Government supported anti-dumping measures to address cheap Chinese steel imports, ensuring that British steel, which, as we all know, is the highest quality steel in the marketplace, can remain competitive.

Another vote of confidence in the UK steel industry is the recent sale of British Steel to Jingye, which will protect 3,200 jobs in the Scunthorpe and Teesside areas. I put on record my congratulations to the UK Government for the work they undertook to finalise that sale, which is a vote of confidence in the UK steel industry. Britain and the world will always need high-quality steel and there are tremendous opportunities over the coming years. The opportunities for growth are substantial, with the potential for £3.8 billion of domestic sales for UK producers.

The UK Government have also taken wide-ranging action to support the industry, including: more than £300 million of relief for electricity costs since 2013; public procurement guidelines, with annual reports on the proportion of public sector steel bought from British firms; and details of a steel pipeline on national infrastructure projects worth around £500 million over the next decade.

Although I hope that the future is bright for the UK steel industry, particularly in Wales, we always can and should do more. I hope that the Government, as well as Members across the House, will work to ensure that British steel companies are at the front of the line for national infrastructure projects such as High Speed 2, and that British steel is at the heart of the Government’s levelling up agenda as well as our international trade deals so that the whole world can access the high-quality steel that only the UK can produce.