Protecting Steel in the UK

Debate between Jonathan Reynolds and Stephen Crabb

Tuesday 23rd January 2024 Commons Chamber

[Jonathan Reynolds]

I agree with that case. That is why this is such an important issue for Parliament to consider. I always acknowledge that there are parts of it that are difficult. Decarbonising industry is an urgent priority, but in some cases the technology is uncertain or expensive. It is my contention, however, that getting it right is more important than doing it quickly or necessarily at the cheapest cost. To state the obvious, we can decarbonise anything by shutting it down. The cheapest path will likely always involve outsourcing most of our industrial production to other places. If we do that—it is the Government’s plan for Port Talbot—we will spend millions of pounds, and we will see huge job losses and global emissions rise as we effectively offshore our emissions and then claim that is progress. That would be a fundamental political mistake with potentially enormous ramifications for the future of the transition to net zero. We should know that from our own past.

As my hon. Friend mentioned, when I was a child growing up in the north-east in the 1980s, there was a major transition. We saw the end of coalmining and shipbuilding and the old nationalised industries as we knew them then. Many colleagues across the UK have similar personal experiences. Nobody today would propose that the UK should have an economic or energy policy based around large-scale coalmining, but how we manage the transition is fundamental. In the past, as a country, we have got that wrong. Levelling up—supposedly the Government’s flagship policy—is surely a recognition that the scars of those years and the impact of deindustrialisation are still felt in many parts of the UK today, yet the Government risk making exactly the same mistakes all over again.

The decision of this Conservative Government to hand over half a billion pounds of taxpayers’ money to make thousands of people redundant is quite simply a bad deal. It is a bad deal for workers, a bad deal for taxpayers and a bad deal for the future of our industrial sovereign capability. Worse than that, it sends a message that decarbonisation effectively means deindustrialisation. I put it to Conservative colleagues that if net zero becomes a zero-sum game for working people, that risks the very support that we need to achieve the transition. There must be public consent for the transition, and that requires our economy to benefit from better jobs and better opportunities. This is the real politics of getting net zero right: it is not imaginary meat taxes or made-up claims about seven bins but whether the transition is just and fair and delivers something for Britain’s workers. The Government’s plans so far are simply none of those things.

The race to decarbonise is a race for jobs and prosperity, and this could be a hugely significant time for steel. As the Minister knows, I have many criticisms of Government policy, and I believe that we have weak business investment, weak productivity and weak growth as a result. I recognise that the Port Talbot site is in a challenging financial position, but the Government have already recognised that uncompetitive energy prices need tackling. We have procurement rules in place that are seeing significant steel content from the UK in infrastructure projects, and we are getting close to carbon border adjustment mechanisms both here and in the EU, which will be a major development. CBAMs in particular will likely completely change the economics of the UK steel industry. There is no reason to believe that the UK cannot have a vibrant steel sector, so to make this irreversible decision now, when the policy background is clearly improving, seems odd indeed. Better options are on the table; anyone claiming otherwise is simply being disingenuous.

When it comes to Port Talbot, there is a specific alternative proposal available—the multi-union Syndex plan—which is not far off Tata’s original proposals, which were known as Project Kronus. Other proposals have also been put forward. All we ask is that the Government consider the issues involved and do not make any fundamental decisions that are irreversible.

It is widely accepted at Port Talbot that blast furnace No. 5 is at the end of its life and may need to close, but blast furnace No. 4 will not need to be relined until 2032. For the Government to force that furnace to close now, as we await the arrival of new technologies, is an act of economic vandalism. We acknowledge that electric arc furnaces are part of the answer, but we do not want to put all our eggs in one basket, which means being open to all technologies, and especially direct iron reduction, which is one of the most exciting possibilities.

The counter-arguments put forward so far are not robust. I believe that safety issues could be managed in the same way that they are every day at a major steelworks. The claim that 90% of what Port Talbot does could be met with an electric arc furnace does not stand up, as key products in packaging and automotive materials cannot be produced in one. At Scunthorpe, I understand that the lack of sufficient grid connections and the cancellation of the first carbon capture programme back in 2010 have severely limited the options available. Again, I ask the Government not to make irreversible decisions, to be open to all technologies and to recognise the growing importance of and demand for steel.

We are not the only country with these challenges, but everywhere we look, other countries are doing it better. Take the Netherlands, where Tata is in negotiations with the Government on DRI technology; Sweden, with the collaboration between SSAB, Vattenfall and LKAB; Canada, where ArcelorMittal signed an agreement some time ago to build a new green steel plant; or the news just in of a $5 billion investment in a new green steel plant in Saudi Arabia. Everywhere we look, other countries are seeing growth and investment in their steel sector, but we are seeing the opposite. I put the question to Ministers: why is the UK pursuing this path alone?

At Business and Trade oral questions, the Minister has been asked repeatedly—mostly by Government Members—about the assessment the Government have made of becoming the only major economy without primary domestic steel production. Her answers hint that she might get it, but the Government have ploughed on regardless. I ask her again: how can any Government possibly justify making thousands of workers redundant in the name of cutting our carbon footprint only to pay to ship in more carbon-intensive steel from halfway across the world?

It does not have to be this way. We cannot afford to blow this opportunity, repeat the mistakes of the 1980s and leave regional inequality entrenched—we can still see those scars. That is why I always say that, under Labour, decarbonisation will never mean deindustrialisation. I want green steel, and I believe that the workforce are our greatest asset in delivering that. Any real plan for green steel must cover the whole industry. It must be open to all technology that is available, and it should fundamentally be a story of new jobs, new opportunities, new exports and renewed British economic strength, rather than outsourcing our emissions and pretending that that is progress.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

The hon. Gentleman is being generous with his time. I came here this evening, as I am sure the workers sitting in the Public Gallery did, to see whether there is a genuine plan on the table from the Opposition. The hon. Gentleman said that there would be, but I have heard nothing specific. I have heard about none of the costs involved. He said that he was not interested in nostalgia, but most of the contributions from Opposition Back Benchers have been exactly that. Where is the credible plan B that people want evidence of?

[Jonathan Reynolds]

It is literally here in my hands. It is not hard to find. I say to Conservative colleagues that Google is their friend. I have tried to say that the plans are available, but we will be pragmatic and flexible. We are just asking that irreversible decisions are not made that limit the room for manoeuvre in future. On resources, we have earmarked £3 billion of investment from our spending plans to deliver this, all of which is predicated on unlocking much larger sums of private investment. The Government do not disagree with the case for putting money in, but the deal that they are putting forward for that half a billion pounds does not deliver very much at all. What a tragedy it would be in the future to find a Britain that is building homes and infrastructure again, with secure low-carbon energy generation and a new wave of floating offshore wind, but is not making the steel to provide those things.

Labour has a plan to build a better Britain, and we want to build it with steel made in Britain. We will only get one opportunity to get this right, and we must bring workers and steel communities with us. I will finish with what Gary Keogh, a steelworker from Port Talbot told me:

“The question for Tata and the UK Government is this—do we want to be a nation that makes goods, or a nation that imports them from heavily polluting countries? It is not too late for Tata and the UK Government to think again and change course, but time is…running out. If they fail to take a different path now, the people of South Wales will never forgive them, and history won’t forgive them either. There is so much at stake for all of us.”

Well said, Gary.

I am asking the Minister—quite honestly, I am begging her—to consider the arguments and what is really value for money, and not to make decisions that are irreversible and prevent a far better outcome in future. To Britain’s steelworkers, I say that I know how desperate things feel right now and how angry people are, but there are those of us who get it, who understand what this industry is and why it is important. Given the opportunity, we will deliver the future for steel and the right transition that we all know is essential for our future prosperity, security and wellbeing.

Universal Credit and Working Tax Credits

Debate between Jonathan Reynolds and Stephen Crabb

Wednesday 15th September 2021 Commons Chamber

[Jonathan Reynolds]

I addressed that in an entire section of the speech so I refer the hon. Gentleman to Hansard.

[Stephen Crabb (Preseli Pembrokeshire) (Con)]

Actually, that is a really important point because the hon. Gentleman was guilty in his comments on the previous welfare system of looking at it through rose-tinted lenses. There were huge problems with the previous welfare system. It caught hundreds of thousands of families in poverty traps, and at every opportunity since 2010 the Labour party resisted our efforts to reform welfare, to make work pay and to provide better financial support for families in Britain.

[Jonathan Reynolds]

I have a lot of time for the right hon. Gentleman, as he knows, and he has been vocal in opposing the Government and we all have respect for that, but I must put a few things on the record in response to his intervention. The reductions in poverty under the last Labour Government were tremendous, and we did not even know how good they were until we got the evaluation, sadly a few years later when already so much of that had been taken apart. Of course there were problems with the previous system, but no one should try to claim that the last Labour Government were not a reforming Labour Government. As the right hon. Gentleman knows, after that Labour Government came to power a single parent did not have to go out and look for work until their eldest child was 16—there was no regime in the world like that—and Jobcentre Plus did not exist. So there was a lot of reform and the system was improved, but crucially—this is the big difference from the reforms of this Government—our reforms brought poverty down, brought more people into the workplace, and made this country stronger, more resilient and a better place for everyone. That is why, sadly, our record is overwhelmingly better than this Government’s.