Protecting Steel in the UK

John Hayes Excerpts

Tuesday 23rd January 2024 Commons Chamber

[Ms Ghani]

Steel is infinitely recyclable and we have a glut of it in the UK. We use shy of 3 million tonnes and we export around 8 million tonnes, so we have it within the system and we can recycle it. It has the same chemical compound and it can be used infinitely, so that is the assurance in the supply chain.

As hon. Members will know, Tata Steel will shortly begin a statutory consultation with employees and trade unions as it embarks on a fundamental transformation project to replace its two blast furnaces with state-of-the-art electric arc furnaces. We cannot stop the clock. The technology is here and customers are asking for cleaner, greener steel.

[Sir John Hayes (South Holland and The Deepings) (Con)]

Is not the truth of the matter—I admired, by the way, the shadow Secretary of State’s rhetoric—that Port Talbot is a victim of climate militancy and extremism? Net zero zealots do not understand that unless we manufacture in this country, we will extend supply chains and our carbon footprint will grow. Is that not the truth of the matter?

[Ms Ghani]

I thank my right hon. Friend for that contribution. The truth of the matter is that the Opposition would go harder and greener, faster. At least we are providing the support that Port Talbot needs.

--- Later in debate ---

[Holly Mumby-Croft]

My hon. Friend, who knows a great deal about steel, is absolutely right. We need to remember that if we are not making that virgin steel here in the UK, it will come from someone else’s blast furnaces, probably from the other side of the world. We will have no control over the emissions or how that steel is produced. We will have no control over the welfare of the people who make it. The steel will then be put on a ship—a ship with a diesel engine, not a sail—and driven over here to be thrown into our electric arc furnaces to make that mix.

[Sir John Hayes]

My hon. Friend is absolutely right. The more that we make in this country—the more food we grow; the more products we produce—the more essential our manufacturing base becomes, and not just for our economic resilience and wellbeing, but for our move to this wonderful carbon-neutral future, which is so beloved of so many.

[Holly Mumby-Croft]

My right hon. Friend is correct. Put simply, unless we are going to stop using virgin steel in this country, we should have the ability to make it ourselves, so that we can take responsibility for those emissions and for the production methods, and for the working conditions of those who make the products.

Last week, my right hon. Friend the Secretary of State for Defence remarked that we are entering a pre-war world. A strong—or at least “in existence”—steelmaking industry is a core part of our nation’s defence capability. We may choose to buy the steel that we need for our defence from other countries—whether or not I agree with that—but resilience is not only about what we choose to do in future; it is also about what we may need to do, or what we may need to have the capability to do should the need arise.

On 18 September, I asked my hon. Friend the Minister for Industry and Economic Security whether she agreed that

“for national security reasons alone, we must ensure that we retain the capability to make virgin steel in this country”.

As I said in the urgent question that I later secured, that was confirmed to me by the Secretary of State the very same day, and I took contemporaneous notes of that conversation. On 18 September, my hon. Friend the Minister commented that I was correct on the importance of virgin steel, stating:

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

I have no problem with building electric arc furnaces—it is a good idea—but I passionately believe that the UK should retain, at least in the medium term, some blast furnace capability alongside that. After the sad news in Port Talbot, that has to be in Scunthorpe.

On 6 October, British Steel set out its plans, which it says are subject to appropriate support from the Government. They are the content of the negotiations that my hon. Friend is working so hard on. They talk about installing two electric arc furnaces, one in Scunthorpe and one in Teesside, and they propose maintaining current operations until a transition to electric arc steelmaking.

I want to be crystal clear: I expect the company to keep to its word on this. If we are to give British Steel hundreds of millions of pounds of public money, we need to ensure that it retains those blast furnaces until the transition. In short, that must be written into the deal. I do not want the sad events happening in Port Talbot to happen to my people in Scunthorpe. I do not want to see blast furnaces switched off early and steel being brought in from abroad and rolled in our mills. I want those blast furnaces to be on for as long as possible, maintaining jobs and keeping options open, so that we can explore alternative technologies, just as other countries are doing.

--- Later in debate ---

[Alun Cairns (Vale of Glamorgan) (Con)]

There is no question but that this is an extremely worrying time for families in Port Talbot and for the community at large. I know the community extremely well, and my father was a welder at the basic oxygen steelmaking plant in the steelworks for more than 30 years. Port Talbot is a community where everyone knows someone who is related to the steelworks in some way. The scale of the impact that this will have on the community should not be underestimated. It is not just the jobs themselves. There will be the contractual jobs and the associated roles with those contractual jobs, so there is a significant multiplier that follows on.

Of course, this is not the first time that we have been in this position or that the steelworks have been under threat. I can remember tens of thousands of people working there when I was growing up in the 1970s. The reality is that in 2016 we were in a similar position, when Tata planned to close the plant but, in opposition to what the Government are now claiming, the UK Government proactively worked with Tata to encourage a sale and, in the interim, the price of steel rose, which has given us a much longer lifespan for the site.

I want to point out that the commitment that Tata has shown is significant and needs to be recognised, because it has lost millions of pounds over time. In the close of 2018, as Secretary of State for Wales, I went to Mumbai to meet the chairman and chief executive of Tata, and to express my concern that the price of steel at that time was falling, and I wanted to know what their plans were. That is the proactivity with which the Government maintained an interest over time in seeking to support the industry and to support steel.

[Sir John Hayes]

I take my right hon. Friend’s point about commerciality, but the truth is that we can and should protect those core industries that are at the heart of our manufacturing capacity. If we open ourselves up to cheap foreign imports with huge environmental costs, we are bound to end in a situation of the kind he describes. I thank him and, in particular, my hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) for their work, but it is for the Government to prioritise British jobs and British manufacturers.

[Alun Cairns]

My right hon. Friend makes an extremely important point, and I strongly agree with him. That is the proactivity that the Government have sought to pursue. I should correct the record, by the way: it was in November 2019 that I went to Mumbai to meet Tata.

However, the reality is that every time a Member of this House, on either side of the Chamber, has called for us to go further and faster and to be ahead of the curve in the green transition, another nail has been put in the coffin of heavy industry such as Tata in Port Talbot. That is the reality of the position. When we have passed climate change legislation here we have heard many Opposition Members—those who are now seeking to defend the jobs—saying that the Government are not doing enough on our green transition.

The £500 million is a significant sum, and we should not play it down. We must also remember that this is a devolved responsibility. Pre-devolution, that money would have been coming out of the Welsh block. We all know that since 2016 the Welsh Government have done nothing to reinvest in the plant after we managed to save it from closure, so I find it churlish when the Minister in the Welsh Government says he needs hundreds of millions. Those are the people calling for further devolution and further responsibility, but ultimately there is no accountability for the decisions, because investment in industry is a devolved function.

However, thanks to the Union and thanks to the United Kingdom Internal Market Act 2020, the UK Government can invest in the steelworks in Wales. That is the same Act that the Opposition voted against and to which the Welsh Assembly would not even approve a legislative consent motion in order for it to pass.

In the limited time I have, I also want to point out this is a two-blast furnace site; having one blast furnace operational makes it even more inefficient, and it will lose more money. My hon. Friend the Member for Scunthorpe (Holly Mumby-Croft) highlighted a really important point about an arc furnace, and I have not heard the automotive sector say that it is content with that. Finally, I hope we will have a development corporation in order to save the economy in the area.